AN ACT CONCERNING THE SALE OF CIDER AND APPLE WINE ON THE INTERNET.

This bill allows a holder of a manufacturer permit for cider and apple wine to sell and ship cider or apple wine both to persons outside the state and to consumers in the state in the same manner as the sale and shipment of wine. The bill also allows out-of-state cider manufacturers to obtain a permit to ship in the state by including cider not exceeding 6% alcohol by volume and apple wine not exceeding 15% by volume in the definition of “wine” for the purpose of the out-of-state winery shipper's permit.

The bill also creates two liquor permit classes for the purpose of hosting or attending wine festivals and allows certain classes of permittees to hold multiple permits concurrently. It allows an (1) association promoting the manufacture and sale of farm wine in this state, or its not-for-profit subsidiary and (2) an out-of-state entity to each host one festival per calendar year.

This bill extends the hours farm wineries can offer the retail sale and tasting of wine by allowing them to close at 9: 00 p. m. instead of 8: 00 p. m. every night.

*Senate Amendment “A” (1) removes a provision allowing cider manufacturers to offer samples to visitors for tasting on-premises; (2) removes a provision prohibiting permittees from selling cider and apple wine not manufactured by the permittee unless they were manufactured by another holder of a manufacturer permit for cider and apple wine in the state; (3) adds the provisions relating to wine festival permits; (4) extends farm winery hours of operation; and (5) changes the effective date.

EFFECTIVE DATE: Upon passage, except for the section extending the hours of operation for farm wineries, which is effective July 1, 2009.

The bill allows cider manufacturers to ship directly to Connecticut consumers in the same manner as farm wineries, requiring permittees to:

1. ensure that all packages of cider and apple wine shipped to Connecticut consumers bear labels stating: “CONTAINS ALCOHOL—SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY; ”

2. obtain the signature of a person age 21 or older before delivering, after requiring the signer to prove his or her age by showing a valid driver's license or Connecticut identity card;

3. pay all sales and alcoholic beverage taxes due the Department of Revenue Services (DRS) on the sales file related tax returns, and permit DRS and the Department of Consumer Protection (DCP) to perform audits of the permittee's records;

4. report to DCP a separate and complete record of all sales and shipments to consumers in the state, on a ledger or similar form, which readily presents a chronological account of the permittee's dealings with each consumer;

5. execute a written consent to the jurisdiction of this state;

6. hold an in-state transporter's permit or ship to Connecticut consumers using a delivery company that holds such a permit; and

7. clearly and conspicuously state their liquor permit number when advertising or offering cider or apple wine for direct shipment to Connecticut consumers on the Internet or any other on-line computer network.

The law prohibits shipping (1) more than five gallons of cider and apple wine in a two-month period to anyone in Connecticut or (2) to any state location where the sale of alcoholic beverages is prohibited under the local option provision of the Liquor Control Act.

By law, the annual fee for an out-of-state winery shipper's permit is $ 250 (CGS § 30-18a(g)).

The bill establishes two classes of permits for hosting wine festivals. One permit allows farm winery manufacturer permittees to participate in an annual festival hosted by an association or its not-for-profit subsidiary promoting the manufacture and sale of farm wine in this state. Only one festival may be held per year and only one wine festival permit may be issued per year to each manufacturer permittee.

The second permit allows an out-of-state person or entity holding a valid permit issued by another state authorizing the manufacture of farm wine to participate in an out-of-state wine festival held in this state. Only one out-of-state festival permit may be issued per year, regardless of the number of participating entities. The bill does not specify an organization that must host this event.

Both permits allow the sale and shipment by a permittee to persons outside the state; free samples and tasting at the event; sale of sealed bottles for off-premises consumption; and sale of wine by the glass at the event, if the glass or container has the name and date of the festival on it.

A wine festival permittee may not sell, offer, or give wine for which there is not a wholesaler permittee in this state. The cost of either permit is $ 75 and both have a three-day limit. Permit recipients must notify the chief municipal law enforcement official in writing of the hours and dates of the festival no later than seven days before the event. Hours for festivals must be between 11: 00 a. m. and 8: 00 p. m. on Sundays and 10: 00 a. m. and 8: 00 p. m. all other days, though towns may vote to further limit the hours in which sale or tasting may be permitted. The bill does not set penalties for violations of these provisions.

An out-of-state entity winery festival permittee must disclose to individuals purchasing admission, at the time of purchase, any restriction or limitation of such admission, including the maximum number of wine or brandy glasses to which the purchaser is entitled by admission to the festival. The bill does not place these requirements on permittees of the Connecticut wine festival.

The bill allows (1) holders of a manufacturer's permit for a farm winery to also hold an in-state transporter's permit or a wine festival permit and (2) holders of out-of-state winery shipper's permits to hold an in-state transporter's permit or an out-of-state charity wine festival permit.

The law provides for manufacturer permits for cider and apple wine for the production of hard cider not exceeding 6% alcohol by volume and apple wine not exceeding 15% alcohol by volume. Although both are made by fermenting apple cider or juice, the distinction between hard cider and apple wine is generally based on alcohol content, which is traditionally above 7% for apple wine and below 7% for hard cider. Holders of farm winery manufacturer permits are also able to produce apple wine, as their scope of operations includes “wine and brandies distilled from grape products or other fruit products. ”

In Granholm v. Heald, 544 U. S. 460 (2005), the U. S. Supreme Court ruled on a challenge to state regulatory schemes in Michigan and New York brought by small wineries. The Court considered whether a state's regulatory scheme that permits in-state wineries to ship alcohol directly to consumers but restricts the ability of out-of-state wineries to do so violates the Commerce Clause in light of § 2 of the 21st Amendment. In general, the U. S. Constitution's Commerce Clause prohibits states from adopting laws that benefit in-state economic interests to the detriment of out-of-state interests. In similar broad terms, § 2 of the 21^st Amendment forbids transporting or importing liquor into a state in violation of its laws.

The Court held, in a 5 to 4 decision, that laws banning or severely restricting the ability of out-of-state shippers to ship wine directly to consumers while allowing in-state wineries to do so violate the Commerce Clause. The Court's opinion stressed that, if states choose to allow the direct shipment of wine to consumers, they must do so impartially.

HB 6472 (File 75) creates two liquor permit classes for the purpose of hosting or attending wine festivals and allows certain classes of permittees to hold multiple permits concurrently. It allows the Connecticut Vineyard and Winery Association, or its not-for-profit subsidiary, to host one festival per calendar year and allows out-of-state charitable wine foundations to receive one permit per foundation, per year to host a festival.

HB 6473 (File 76) extends the hours farm wineries can offer the retail sale and tasting of wine by allowing them to close at 9: 00 p. m. instead of 8: 00 p. m. every night. Under current law, their hours of operation are 11: 00 a. m. to 8: 00 p. m. on Sundays, and 10: 00 a. m. to 8: 00 p. m. on all other days.