Jeremy Benson, the executive director of Free the Grapes. – Free the Grapes
The COVID-19 pandemic has pushed New Jerseyans to buy more of everything online — including wine.
Most New Jersey residents, however, are unaware that the state is one of only two that limits those purchases to small- and medium-sized wineries — those which produce 250,000 gallons a year (about 106,000 cases) or fewer — thanks to a 2012 law.
This “capacity cap” limit applies to both in-state and out-of-state wineries. The limit forbids New Jersey residents from direct-shipment access to more than 90% of wines made in the U.S. New Jersey and Ohio are the only states with a capacity cap; similar restrictions were removed in Massachusetts and Arizona.
Bipartisan legislation introduced in both houses (S 2683 and A 1943) would eliminate New Jersey’s so-called capacity cap and give consumers the range of choice enjoyed in every state other than Ohio.
On Thursday morning, a discussion-only hearing on the measure is scheduled for the Assembly Oversight, Reform and Federal Relations Committee.
Jeremy Benson, the executive director of Free the Grapes, a national grassroots coalition which seeks to remove bans and streamline restrictions, said the willingness of the Legislature to even discuss the issue is a victory.
“I’m happy these two bills are getting heard, even if it’s a discussion-only hearing,” he said. “That’s more than we got in the last legislation session.
“In general, the more the issue gets raised, the more unusual and strange the current restriction appears to people — and the more consumers can reach out to legislators about what appears to be unusual rules.”
Statistically, the legislation appears to be having an impact.
Though New Jersey is the sixth largest wine-consuming state, it ranks only No. 17 in the value of wine shipped directly from wineries to consumers, lagging far behind other, smaller states, according to Wines Vines Analytics and Sovos ShipCompliant, two organizations that jointly produce data on direct-to-consumer wine shipping.
In the first half of 2020, winery-to-consumer shipments increased by nearly 1 million 12-bottle cases across the nation — or 29% — compared to the same period in 2019.
In New Jersey, shipping volume rose by just 9%. The value of shipments nationwide was up 15%, or $222 million. In New Jersey, value rose only 11%, to $24.6 million.
To be clear, adjusting this law will benefit consumers — not necessarily New Jersey wineries — as they would now have more online ordering options. At this point, no New Jersey winery is over the cap — thus all can sell online to New Jersey customers.
Benson said statistics from other states have shown having a cap does not (and did not) lead to increased sales in commercial stores. He also said New Jersey wineries may soon be impacted by the law — whether it be from increased growth or the sale of the winery.
“A small winery that is sold to a larger winery may suddenly find they are no longer eligible to sell to consumers here,” Benson said.
