At a ceremony Tuesday at the Capitol in Olympia, Gov. Chris Gregoire signed a bill allowing out-of-state wineries to ship their product directly to Washington consumers. Previous state law only allowed wineries in other states to ship wine to Washington consumers if the winery's own state reciprocated.
"These bills level the playing field between in-state and out-of-state wineries that want to sell to Washington consumers," Gregoire said.
The bill became necessary after the U.S. Supreme Court ruled that state laws must treat wineries equally regardless of their location. The ruling last spring struck down laws in New York and Michigan as discriminatory because they allowed in-state wineries, but not out-of-state businesses, to ship directly to consumers.
Washington, by contrast, had a reciprocity agreement with 13 states.
Wine lovers hailed the decision, saying it would promote Internet sales nationwide, and many states have been scrambling in the months since to rewrite their own regulations.
The new Washington law does not directly affect wineries here, although it might open the door to some out-of-state competition.
Washington is the nation's No. 2 premium wine producer behind California with an industry valued at more than $2.5 billion annually, according to the Washington Wine Commission, a promotional agency financed by fees on member wineries and growers. The state is home to more than 300 wineries and 300 wine grape growers who harvested a record 116,760 tons in 2005.
"We would like to see free trade in wine across the United States. In a way, this is a step forward," said Tim Hightower, president of the Washington Wine Institute, a lobbyist group that represents Washington wineries.
In another way, though, it's not, Hightower said.
"It helped set the precedent for opening up shipments from all states, but on the other hand, there's a regulatory hurdle that you have to jump through, obtaining a permit and paying of additional taxes" that wasn't required of wineries in reciprocal states before, he said.
The governor also is expected to sign a bill allowing out-of-state wineries to sell directly to retailers rather than through a distributor.
Washington wineries already are allowed to self distribute their wines, but out-of-state wineries are forced to sell through a distributor.
Costco Wholesale Corp., based in Issaquah, argued in a lawsuit that such protectionism artificially inflates the cost of non-Washington wine and beer. A U.S. District Court judge agreed in a ruling late last year, forcing state lawmakers to pass a remedy to the court's decision.
Had lawmakers not approved the bill by April 14, in-state wineries would have lost all self-distribution rights - a potentially huge blow to small wineries that don't produce enough wine to use distributors.
"We felt it was critical to the health of the Washington wine industry to preserve the right of Washington wineries to be able to self distribute," Hightower said. "Even if it meant allowing out-of-state wineries to self distribute to Washington retailers."