Oregon wineries seek to boost direct-to-consumer shipping limit

Published 5:15 pm Tuesday, February 9, 2021

Oregon wineries could increase the amount of wine they send directly to consumers under a bill that’s intended to help offset lost tasting room visitors.

The state’s wine industry is calling on lawmakers to pass Senate Bill 406, which would allow them to ship five cases of wine per resident a month, up from the current limit of two cases.

More than 30 years have passed since Oregon created its “direct-to-consumer” wine shipping law and it’s due for an update due to restrictions associated with the coronavirus, according to proponents.

“With the pandemic, we are unfortunately seeing a lot of these wine tasting rooms being shuttered because they cannot carry out wine tastings” under mandates aimed at limiting the spread of illness, said Sen. Floyd Prozanski, D-Eugene, the bill’s chief sponsor, during a recent legislative hearing.

While wine producers in Washington and California do not restrict the number wine cases shipped direct-to-consumer, the stakeholders in Oregon’s wine industry have negotiated a cap of five cases and aren’t seeking unlimited shipping, he said.

Only a handful of Oregon wineries dominate sales through the “challenging, low margin” national distribution system for wine, while most of the state’s wineries operate outside this model, said Gretchen Boock, CEO of Dobbes Family Estate and Wines By Joe in Dundee, Ore.

“They are highly reliant on the direct-to-consumer sales channel, where volumes are low but price points are higher — often $50 per bottle or more — and margins are reasonably healthy,” she said.

Boock said her company can cite numerous instances of reduced sales due to the current two-case limit, as well as increased complications, such as spreading a shipment over more than one month to comply with the restriction.

Thousands of visitors who’d usually buy their cases on-site are no longer traveling to wineries due to coronavirus restrictions, said Maria Ponzi, president of Ponzi Vineyards in Sherwood, Ore.

“This DTC channel has been a lifeline,” but the existing law has created barriers, she said.

Since the state’s wineries are typically too small to work through distributors, much of their sales occur through wine clubs that generally ship during the spring and autumn seasons, said Mike McNally, owner of Fairsing Vineyards near Yamhill, Ore.

Currently, the two-case limit prevents wine club members from making larger orders for weddings or holiday gifts, McNally said. “A few extra cases of wine sales to our customers at these times are significant for the typical winery.”

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