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Liquor Commission decried by group for 'gangster tactics' over barring mail-order wine shipments to NH customers

New Hampshire Union Leader

May 08. 2018 10:48AM

The newest NH Liquor and Wine Outlet in Londonderry offers a vast selection of wine. (Eli Okon)

CONCORD — Citing a statutory ability to “protect its revenue,” the New Hampshire Liquor Commission has denied permits for brick-and-mortar retailers shipping wine to customers in New Hampshire, a move the National Association of Wine Retailers calls “gangster tactics.”

The situation has been fermenting for months, after the state Senate voted in February to table SB 353 — sponsored by Senate President Chuck Morse, R-Salem, and endorsed by the Liquor Commission and N.H. Grocers Association — to ban shipment of wine into New Hampshire from certain mail-order retailers the bill’s proponents argue cost the state millions in lost sales each year.

New Hampshire Liquor Commission (NHLC) spokesman E.J. Powers said since the bill was tabled, commissioners have denied permits for roughly 80 brick-and-mortar retailers shipping wine to customers in the state — “cases upon cases of brand-name products that we currently carry in our 79 NH Liquor & Wine Outlet locations,” said Powers.

“This practice harms the bottom line of New Hampshire grocery and convenience stores, small retail wine merchants and yes, the NH Liquor Commission, which delivers critical funding to support essential state services,” said Powers.

Powers said the NHLC has the statutory ability to protect its revenues. RSA Section 176:11 reads, “In the event that the commission determines New Hampshire liquor revenues are being diverted by actions taken by persons holding either liquor and wine representative licenses, liquor and wine vendor licenses, or direct shipper licenses who compete directly or indirectly with the commission for market share, the commission may take such marketing or merchandising action, or both, as it deems necessary, including sanctions against the competing entities.”

The National Association of Wine Retailers (NAWR) refers to the denial of permits as “gangster tactics.”

“Without warning, without explanation and in clear defiance of the legislature, the New Hampshire Liquor Commission has begun denying direct wine shipping permits to all out-of-state wine retailers and wine clubs,” said NAWR executive director Tom Wark. “This is a clear abuse of power and a usurpation of legislative powers. The arbitrary shipping permit denials began in February just as the Legislature began deliberating upon and ultimately rejecting the Liquor Commission’s bill that requested all out-of-state retailers be forbidden from shipping into the state—after having been allowed to do so for more than a decade.”

On May 3 a Senate floor amendment to HB1626 was introduced by Sen. Donna Soucy, D-Manchester, at the request of the NHLC that reads, “The commission may deny a direct shipper permit to an out-of-state retailer which is domiciled in a state that does not extend equal and reciprocal shipping privileges to New Hampshire businesses.”

“This amendment encourages reciprocity,” said Powers. “If states allow New Hampshire businesses to ship to them, then we should allow their businesses to ship here. Conversely, if states don’t allow New Hampshire businesses to ship to them, we don’t think we should allow their businesses to ship here.”

“Rather than penalize the Liquor Commission for its arbitrary and capricious acts taken since February, the Soucy Amendment seeks to reward what can now clearly be called an act of blackmail on the part of the commission,” said Wark. “Either adopt this new anti-consumer, anti-competitive direct shipping rule or we will deny direct shipping permits to all out-of-state retailers and deny New Hampshire residents from purchasing any wines from out-of-state wine clubs and wine stores.”

“Again, the restriction is on the large, brick-and-mortar retailers that are abusing the designation by shipping name-brand products into New Hampshre, which represent 80 of 1,069 permits,” said Powers. “The vast majority of wineries shipping to New Hampshire, nearly 1,000, and their customers will not be affected.”

The amended bill HB1626 has passed the Senate, and now heads back to the House.

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