Multicasting enables efficient usage of network resources in applications that require group communication. In addition to the well known multicast applications, new communication technologies that can benefit from multicast keep emerging. A recent example are the various types of Virtual Private Network (VPN) applications that carry customer traffic over public networks creating the illusion of a private network for each customer. Still, due to the difficulty of aggregating multicast destination addresses, multicasting suffers from the forwarding state scalability problems. In this work we will investigate how the problem of multicast state scalability re-emerges in the VPN setting and how it can be effectively addressed there using the MPLS label based forwarding paradigm.