FL Retailer Reignites Out-of-State Shipping Fight in Missouri

Florida retailer Magnum Wine and Tastings filed suit yesterday against the state of Missouri, claiming the state law prohibiting out-of-state retailers to ship to consumers while allowing in-state retailers to do so is unconstitutional. If this sounds familiar, that’s because this is the second case the retailer has filed against the state over the same issue.

BACKGROUND. Last year, Magnum Wine and Tastings filed suit against Missouri because the state law that allowed Missouri retailers to sell, ship and deliver wine directly to Missouri consumers while excluding out-of-state wine retailers violates the Commerce Clause and Privileges and Immunities law. Thus, discriminating against out-of-state wine retailers [see WSD 10-07-2016].

Fast forward to August 2017 when the retailer dropped its interstate shipping lawsuit after the state legislature repealed the statute preventing it from shipping wine directly to consumers [see WSD 08-01-2017]. Here’s where it gets a little tangled, so bear with us. That repeal essentially bans all retailer direct shipping. And no retailer shipping means there’s no discrimination between in and out-of-state retailers, and thus no lawsuit needed. Or so we thought.

NEW LAWSUIT, SAME ISSUE. According to Magnum’s attorney Alex Tanford the legislature repealed the statute that explicitly (key word) allows in-state retailers to ship directly. But the Missouri Division of Alcohol and Tobacco Control interpreted a separate statute that allows in-state businesses to operate as a retailer to implicitly allow retailers (including wine retailers) to deliver through a common carrier. Thus, out-of-state retailers are again left out of the equation.

In the complaint filed yesterday, the plaintiffs, which includes Missouri resident Michael Schlueter, allege that the state laws on direct shipping and only allowing residents to obtain the required license to do so violates the Commerce Clause and the Privileges and Immunities Clause.

The plaintiffs are seeking an injunction, barring the state from enforcing the law, allow out-of-state retailers to obtain the license to sell and deliver wine to residents, an award of costs and expenses and any other relief the court deems appropriate.

THE BIGGER PICTURE. Interstate retailer shipping continues to be an issue for several states, especially in the last couple years. Indiana-based Lebamoff Enterprises, the owner of the Cap n’ Cork chain stores, for instance, is a plaintiff in two separate but similar DTC shipping lawsuits – one in Illinois and one in Michigan.

Meanwhile, New York retailer Empire Wine is still embroiled in its lawsuit against the New York State Liquor Authority, which arguably kickstarted the larger national conversation of the issue.

HOLIDAY SPENDING INCREASES RESTAURANT SALES IN 2017

Although e-commerce spending increased from 25% in 2016 to 29% in 2017, restaurant sales still increased this year during Thanksgiving and Black Friday.

In general consumers spent nearly 12% more over the two days, while consumer spending in restaurants increased 6.3% on the holiest of shopping holidays, according to technology company First Data.

Below is the spending breakdown based on restaurant type:

— Quick service restaurants–representing about 40% of all restaurant spending during the two days–supplied as much as 57% of the growth.
— Casual dining–representing about 27% of all spending–supplied 17% of growth.
— Family dining–at 11% of spending–brought in 12% of growth
— Fast casual chains–at 16% of total spending–supplied 10% of growth.
— Upscale rounds out the smallest percentage at 5% of spending and 4% of growth.

“We found restaurants definitely benefited from the overall increase in consumer spending over the holiday weekend,” Glenn Fodor, senior vice president and head of information and analytics at First Data told NRN. “When shoppers needed a quick bite to eat between shopping trips, quick-service restaurants and casual dining spots were the go-to destinations, with $67 out of every $100 spent in restaurants getting split across these two dining types.”

WSD BRIEFS:

PERNOD DEBUTS JAMESON CASKMATES IPA EDITION. Following the successful launch of the initial offering in the Jameson Caskmates series, Pernod is launching Caskmates IPA Edition. The finished product is the result of a collaboration in which a local Irish brewery fills oak whiskey barrels with IPA, after which Jameson uses the same barrels to finish off a batch of its whiskey. Caskmates IPA Edition is available nationwide for a suggested retail price of $30 a 750 ml.

ACUMEN WINES APPOINTS NEW DIRECTOR OF CONSUMER SALES. Tiffany Kenny has joined Acumen Wines as the director of consumer sales. In her new role she will oversee hospitality and events at the Acumen Wine Gallery, as well as the development of the Acumen Summit Society Wine Club, Peak Cabernet Sauvignon allocations and e-commerce channels, per a release. Tiffany has 15 years of industry experience under her belt, most recently working at Patz & Hall Winery in a senior level direct-to-consumer leadership position. “Her proven experience and leadership will be vital as we continue to grow our DTC business at the Acumen Wine Gallery in downtown Napa, as well as the upcoming development of our estate on Atlas Peak,” says Acumen director of sales Gordon Waggoner.

M.S. WALKER HIRES PETER RUGGIE AS GM OF NY/NJ. As gm of M.S. Walker’s business in New York and New Jersey, Peter Reggie will support business plan execution and the division’s operational activities, develop and enhance key supplier relationships, oversee the brand management department as well as compliance and logistics protocol, per a release. Peter brings with him 25 years of management and operations experience, most recently working as gm of Martin Scott Wines NY/NJ. He will report directly to Jeffrey Allen, coo NY/NJ.

KIMO SABE MEZCAL BRINGS ON NEW CMO. Randall Stone has been named Kimo Sabe Mezcal’s new cmo, effective immediately, per a release. He joins the company from Lippincott, a global marketing firm where he worked as chief experience officer, and previously worked to help develop major brands including Disney, Samsung, Hyatt and Audi. “He has already helped us shape our brand positioning as an advisor for the past year. We are thrilled to have him join the Kimo Sabe family full-time to spearhead our marketing initiatives and rapid expansion plans,” says ceo Jim Walsh.

SPI GROUP’S BAYOU RUM TO GET $6 MILLION DISTILLERY EXPANSION. Bayou Rum recently broke ground on a distillery expansion project at its Louisiana facility, per a release. The expansion, valued at more than $6 million, includes adding a barrel library, an event space and an outdoor entertainment venue to its Visitor Center. It is slated to open summer 2018.

A REASON TO ATTEND THE 2018 WSD SUMMIT: BILL NEWLANDS

— Bill is the coo for Constellation Brands, and has three decades of industry experience.
— Constellation recently made a play in the marijuana business, with a minority investment in Canada-based Canopy Growth Corp.
— In the last 3 years Constellation has significantly increased its ownership/investment in smaller brands including: Casa Noble, High West, Meiomi, Ballast Point, The Prisoner, Charles Smith and Schrader Cellars.
— The company’s focus brands (Black Box, Robert Mondavi Private Selection, Kim Crawford, Woodbridge etc.) are on fire, with depletion growth (sales to retailers) of more than 12% for the second quarter ended August 31.
— Constellation drives organic growth through cross-category promotions and products. This strategy is working for them and they will continue “thinking of ways to blend categories,” said Bill at the Barclay’s Back-to-School Consumer Conference.

The 2018 Summit is taking place in Palm Beach, FL January 15-16 and our room block at The Breakers is almost sold out, more information here.

Until tomorrow,
Your Editors

Emily Pennington – emily@winespiritsdaily.com
Sarah Barrett – sarah@winespiritsdaily.com

“Patience is not simply the ability to wait – it’s how we behave while we’re waiting.” — Joyce Meyer

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