New State Law Limits Out Of State Wine Sales

Wine retailers in Illinois are suffering the consequences of a law enacted earlier this year that makes it a felony to ship wine into the state without the proper license.

One wine industry expert said requiring another license for retailers is just another way for the state to make money at the expense of small business owners.

Cynthia Fleischli, executive director for the Illinois Grape Growers and Vintners Alliance, said retailers can no longer ship their wine without a shipping license because of the new law that grew out of Senate Bill 2989, an amendment of the Liquor Control Act of 1934.

An increase in oversight and enforcement of interstate wine shipping is tied to a three-tier system in Illinois that dates back to Prohibition, according to Fleischli.

“A three-tier system means that you have to go through a distributorship,” she said. “You can’t manufacture, you can’t own, and you can’t distribute.”

If you are a retailer and you don’t have a shipper's license, you’re sending your product directly to consumers without going through the three-tier system and this had a negative financial impact on some distributors in Chicago, Fleischli said.

Fleischli said the state now requires a number of licenses from wine retailers to do business in the state.

“A manufacturer's license, you have the retailer’s license, you have the events license, you’ve got the shipper’s license. That’s four licenses and I am just scratching the surface,” Fleischli said.    

SB2989 made it a Class 4 felony for wine retailers to ship wine into the state and it is having a negative impact on their bottom line.

Fleischli said the wine industry brings in more than $700 million to the state every year. There are 108 wineries in Illinois and they’re all in rural areas, she said.

This law will make it difficult for small businesses to make a profit.

“In Illinois, to do business is very difficult,” she said. “When you implement laws that prohibit people from making money or being able to keep the money that they make,  that makes commerce very difficult.”

Fleischli doesn’t think members of her alliance will be heavily impacted by this law.

“Our people already have the shipper's license and they’re not purchasing from someone that doesn’t have a shipper's license because they are making their own wine,” Fleischli said.