Mississippi legalises direct-to-customer wine sales

The Governor of Mississippi has signed a law allowing direct-to-consumer (DtC) wine shipping into the state from 1 July. The new bill means that residents in Mississippi can not only receive wine shipments directly from producers across state lines, but will also allow the few wineries in the state to sell wines direct-to-consumer as well. The bills largely follows DtC regulations adopted by almost every other state in the US, including  requiring the shipper to hold an active license issued by the Alcohol Beverage Control (ABC) division of the Department of Revenue, and file quarterly reports to the ABC detailing the amount and type of wine shipped into the state. However, according to Alex Koral, regulatory general counsel at ShipCompliant, there are some rules in the state that will complicate matters - namely that 31 counties remain dry, further complicated by some communities within those counties having voted to permit the local sale of alcohol, This will create “a complicated map of where wine can and cannot be shipped to in the state” he said. Similarly, a provision will continue to prohibits DtC shippers from selling wines that are available through the Mississippi control system, although there is a small exception for wines that are identified as 'highly allocated' by the state - a somewhat ambiguous term with "little direction around how a wine would achieve that status." "This is a very unfortunate restriction that will do little but limit the ability of wineries to engage in both the DtC and wholesale markets in the state," Koral wrote in response to the new legislation. "Similar blocks on DtC shippers working simultaneously in the three-tier system have proved to be problematic in the few other states that have this prohibition in place." He also points out that the strict penalty guidelines in the new law for anyone who "makes, participates in, transports or receives a DtC shipment that in any way violates the state’s laws for shipping wine" could mean that the winery, carrier and consumer could be charged by the state if there is any problem with a shipment. "While compliance with state law is of course fundamental to the DtC market, the threat of criminal conviction will surely lead many potential shippers to decide against selling to Mississippi consumers," he said, pointing to previous example of when states included harsh penalties in their DtC laws when experts in the industry recommended that "the dangers outweigh[ed] the benefits and therefore wineries should consider not shipping there until the risks have been removed."  Also, because Mississippi is a control state for wine sold at wholesale, a monthly 15.5% tax on the listed price of the wine sold will be levied in order to substitute for the mark-up that Mississippi ABC would normally apply on wines that it distributes in the state, he added. Until 1966, Mississippi was a completely dry state, prohibited from either manufacturing or selling alcohol, and it retained some of the strictest laws in the US. Wineries in Mississippi will also be able to ship wines to consumers in states that permit Dtc sales, although as its climate borders on the tropical, its viticultural options are limited. Mississippi Delta is the only AVA in the state, and to date there are only three official wineries. In 2023, the annual DTC report compiled by Sovos ShipCompliant and WineBusiness Analytics showed a significant 5% growth in the volume of wines shipped with a price tag of US$80 or more. But according to the 2024 edition of the same report, growth in that price category “sputtered” at just 2% last year.