Michigan Bans Wine Retailers, UPS and FedEx from Shipping Wine to its Residents

Wine.com Exiting Michigan Market as

SAN FRANCISCO, CA – 1/22/2009

Wine.com, the nation's #1 online wine retailer, is exiting the
state of Michigan due to a bill that was signed into law in early
January. The new law, signed by Governor Jennifer Granholm, prohibits
retailers from shipping wine directly to consumers, and specifically
bans the use of third-party delivery services like UPS and FedEx.

The law reverses a ruling in October 2008 by the U.S. District Court
for the Eastern District of Michigan. That ruling declared it
unconstitutional to prohibit out-of-state retailers from selling wine to
Michigan consumers.

“Michigan is missing an opportunity,” said Rich Bergsund, CEO of
Wine.com. “This legislation hurts Michigan residents because they will
no longer have access to the world’s best wines at the lowest prices.
It hurts their businesses because Michigan wine retailers and shippers
who employ people in Michigan, like UPS and FedEx, will see a reduction
in their volumes. And it hurts Michigan’s revenue base, because they
are walking away from sales taxes that Wine.com and other retailers
would be happy to pay.”

States have been mixed on the issue of direct shipping of wine to
consumers by retailers. While 30 states currently allow out-of-state
wineries to ship to their residents, only 15 states allow the same from
out-of-state retailers. Wine.com ships to 80% of the U.S. population by
maintaining a network of licensed, in-state stores in order to comply
with state laws. But in Michigan, not even an in-state store would
help, because the company uses UPS and FedEx to deliver its wine.

Arguments for free trade of wine between states include providing a
benefit to consumers, providing a tax base for the state, and by
implementing a direct shipper’s license, providing the state the
jurisdiction and oversight to manage the process. Today, many wine
retailers ship between states illegally, and states have no recourse.

The primary argument against free trade appears to be preventing
underage access to alcohol. To address this, Wine.com pays UPS and
FedEx an additional fee to perform an ID check to confirm the package
recipient is over 21 years of age. The package is not delivered without
a signature and ID check. The signature is captured electronically and
subject to later audit by Wine.com. If an adult is not available to
provide a signature, the package is held by UPS or FedEx and two
additional attempts are made. If the third attempt still fails, the
package is returned to Wine.com.

All Wine.com packages are clearly labeled that they contain wine and
that an adult signature is required for delivery. The Wine.com website
also confirms the age of its customers and notifies them that an adult
signature is required for delivery. Wine.com has recently implemented
evening, Saturday and by-appointment delivery options to ensure that its
customers can find a convenient time to be home to sign for their

If you’d like to weigh in on the Michigan state law banning the
direct shipping of wine by retailers, contact Governor Jennifer M.
Granholm (517) 335-7858, P.O. Box 30013 Lansing, Michigan 48909.

If you’d like to be made aware of pending legislation in other states
and help Wine.com work toward free trade, send an email to:

About Wine.com

Wine.com is the nation's #1 online wine retailer, according to Internet
Retailer magazine's annual ranking of websites by revenue, offering
thousands of wines, wine gifts, gift baskets, and monthly wine clubs.
Wine.com's mission is to be the ultimate resource for wine enthusiasts,
whether shopping for themselves or sending a gift, by offering a great
selection, low prices, convenient delivery and helpful information.
Wine.com is the world's most visited wine web site, according to
research conducted by comScore Media Metrix. For more information, visit
the company's website at
, its blog at
, or Facebook at http://www.facebook.com/winecom
Twitter at http://twitter.com/wine_com.


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