PROPOSED SHIPPING CODE

[Jerry D Mead]

The attached is from the organization that calls itself Free The Grapes. You can check them out a bit further at www.freethegrapes.org

WINE INDUSTRY CODE FOR DIRECT SHIPPING

January 12, 1999

Free the Grapes!, representing hundreds of American wineries, has developed a code of voluntary guidelines for direct shipments of wine to adult consumers for personal use. The purpose of the code is to provide wineries with a framework which, when adopted, will ensure that direct shipment orders and deliveries are completed in a manner consistent with appropriate laws, satisfies consumer demand, and supports the tenets of Free the Grapes!:

support legislative provisions that allow for wineries to pay state taxes; protect against sales to minors; and respect state and local Prohibition laws (e.g., "dry" laws).

Several of these principles are taken from the model direct shipment law, which was
proposed by the Coalition for Free Trade, Family Winemakers of California, Wine Institute,and American Vintners Association, and recommended for adoption by the National
Conference of State Legislatures, Task Force on the Wine Industry, on November 5, 1997.

Code

1.Out-of-state licensees may direct ship wine sold to adult consumers, for personal use,
only in states where it is legal to do so.
2.Out-of-state licensees must not ship to an address in an area identified by an appropriate state department of alcohol beverage control as a "dry" or local option
area for such shipments.
3.Cartons used to direct ship wine to adult consumers must be conspicuously labeled with a minimum notification "signature of person age 21 or older required for delivery" and must include a return address and other language required by specific state laws.
Licensees may opt to further identify the contents, including words such as "wine
enclosed" or "contains alcohol." Free the Grapes! recommends that wineries support
shippers, fulfillment companies and freight consolidators who utilize this labeling
procedure.
4.Licensees must request the birth date of the purchaser to verify that he/she is over 21 years of age before completing any transaction. Additionally, licensees must notify purchasers that the recipient will be asked to show identification upon delivery.
5.Free the Grapes! encourages licensees to contract only with shippers who check the
identification of recipients at the time of delivery to ensure that the recipient is 21 years of age or older.
6.All out-of-state licensees must report to the appropriate state authority the total of
wine, beer and spirits shipped into the state the preceding calendar year, as required by state law. Additionally, as required by state law, out-of-state shipper licensees must pay the appropriate state agency sales and excise taxes due on sales to residents of that state in the preceding calendar year.
7.Out-of-state licensees should offer consumers resources for answering their questions about direct shipping, including Free the Grapes! (www.freethegrapes.org) and Wine Institute (www.wineinstitute.org), among other resources.
8.Free the Grapes! encourages wineries to conspicuously post this code, and to train
employees, to increase the knowledge of, and appreciation for, the industry's responsibilities in direct shipping.
9.Out-of-state shippers, fulfillment companies and freight consolidators who do not abide by this voluntary code of business practices are not in compliance with wine
industry sanctioned standards. Non-compliance undermines the wine industry's desire
to: a) fulfill consumer demand, b) comply with government regulations and controls,
and c) support a dynamic distribution system which embraces both the efficiencies of
the traditional three tier system, and the evolution of a dynamic, direct-to-consumer
marketplace.

Questions, comments and suggestions may be directed during the comment period to Free
the Grapes! by February 15, 1999.