A bill that would make it legal for South Dakotans to order wine by mail cleared its first hurdle on Tuesday. Barely.
Senate Bill 114 establishes a licensing system through which in and out-of-state wineries can legally send residents wine by mail. South Dakota is one of 10 states that do not allow direct shipping of wine, according to the Wine Institute.
The bill deadlocked on a 3-3 vote in the Senate Commerce Committee with one senator, Dan Lederman, excused. The committee then voted 4-2 to send it to the Senate floor without a recommendation.
Similar bills have come up in past legislative sessions, only to be voted down amid fierce opposition from alcohol distributors, retailers and others. The opposition showed up again Tuesday.
Jeremiah M. Murphy, a lobbyist for Republic National Distributing Co., said the bill discriminates against existing South Dakota businesses that sell alcohol in the way that they are taxed and pay taxes. He said the bill would “stick it to South Dakota businesses” in favor of California wineries.
Brett Kooima, the chief financial officer for Cask & Cork Distributing, said his company already works with nearly 400 businesses statewide to identify unique wines and then bring them to the state.
“This is why we exist,” he said.
Heather Taylor Boysen, the owner of Good Spirits Fine Wine & Liquor, said that direct shipment of wine to consumers would harm her business because wineries would sell at a lower price than she could sell at retail. She also said that some wineries are already shipping into the state, despite that being illegal.
But supporters of the bill, including its sponsor, Sen. Corey Brown, R-Gettysburg, noted that South Dakota is the only state in the Midwest that doesn’t allow wine to be shipped directly to consumers.
The bill would require wineries to ensure that people making purchases are 21 or older at the point of sale, and it requires them to show ID when the product is delivered. Jeff Carroll, a vice president of software firm ShipCompliant, testified that his company helps hundreds of wineries verify the addresses and ages of people buying wines that are shipped to forty states and the District of Columbia.
Matt Keck, the owner of Prairie Berry Winery in Hill City, said his winery can ship to customers in other states, but not in South Dakota. He also said that he wouldn’t support a bill that hurt alcohol distributors, because distributors are critical to his winery.
Dianna Miller, who represented South Dakotans for Better Wine Laws, said the bills would give consumers a choice over a monopoly system run by wholesalers.
“I’m asking you to weigh the individual citizens and the choice they would like to make,” she said.