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Amador Wineries Respond to Supreme Court Ruling

By Jim Reece

Monday´s ruling by the Supreme Court to strike down laws in New York and Michigan might have a slowly felt ripple effect on Amador County wine makers and sellers but it should help smaller wineries, local vintners said Wednesday.

“I think it will have an immediate impact and it will be good for small wineries,” said Amador Vintners Association Executive Director Jill Murphy. “It´s a great thing that happened for small wineries.”

Claire McKenna of Montevina Winery in Plymouth said Montevina, makers of 22 different wines, agreed. She said the smaller wineries count more on shipping directly to get their product out and helps them compete. The ruling has brought calls and e-mails from wine lovers around the country expecting to be able to get Montevina shipped to them. But the change may be slower, at least for Montevina.

The 5-4 Supreme Court ruling struck down laws in New York and Michigan as discriminatory because they allow in-state wineries, but not out-of-state businesses, to ship directly to consumers, the Associated Press reported Tuesday. It means that as many as 24 states that currently bar out-of-state shipments will have to revise their laws so wineries are treated equally.

“As far as the ruling goes, we are being tentative,” McKenna said.

Montevina Wine Club ships to 11 states and around California, but the ruling likely will not have much immediate change for that, she said. Some of the shipping limits to states are due to high costs, like in Hawaii, where the company here must get the buyer´s social security number and pay for the high cost of shipping. She said only one Hawaiian customer had agreed to do that so far, so they just don´t ship there.

Montevina ships to Nevada, Colorado, Idaho, Illinois, Iowa, Minnesota, Missouri, New Mexico, Oregon, Washington, West Virginia and Wisconsin. Texas advocates for free wine trade expect a change there in 90 days that could open the entire state to direct shipping, she said.

New York and Michigan will make moves on how to regulate and change their laws.

McKenna said part of the hindrance in an immediate impact is how those and other states change their law. And then the wineries must react, get out-of-state shipper´s licenses from each state, some of which cost and others may not. Each state has its own rules, too. Texas, for instance, has “wet, dry and damp” counties, which its law change might clear up.

“We have to follow the letter of the law and that´s what we do,” McKenna said.

For more information, she suggested a couple of Web sites. At www.freethegrapes.org is direct-shipping wine sales advocate information. Also, see www.wineinstitute.org, which has information on the state industry and law.

The AP on Monday reported that the Supreme Court ruling meant that wine lovers can´t be barred from shipping home bottles purchased from out-of-state vineyards they visit in person or on the Internet.

Critics said the ruling usurped a state´s right to control alcohol within its borders and could promote underage drinking because proof of age would not be required for Internet purchases.

Ultimately it will be up to state legislatures to decide how best to put wineries on equal footing – either by loosening restrictions to let all wineries sell directly to consumers, or by tightening laws to bar all businesses from doing so.

The wine industry is booming, with an estimated $21.6 billion in sales and tourists flocking to wineries for tastings and tours, AP reported. The recent hit movie “Sideways” took a lighthearted look at California´s love affair with the grape.

While wineries have proliferated, there also has been consolidation. Smaller wineries say they can´t compete with huge companies unless they can sell directly to customers over the Internet or by letting winery visitors ship bottles home.

The ruling does not affect international wineries, the AP story said. To buy from them, United States consumers typically must go through importers or pay duties when bringing bottles into the United States.

The case centered on the 21st Amendment, which ended Prohibition in 1933 and granted states authority to regulate alcohol sales, AP reported. Nearly half the states subsequently passed laws requiring outside wineries to sell their products through licensed wholesalers within the state, enabling state governments to collect millions in alcohol taxes.

While the ruling only involves wine sales, industry groups expect it will soon apply to beer and other alcoholic beverages now regulated through state-licensed wholesalers and retailers, AP reported.

The Washington-based Institute for Justice told the AP that the 24 states that ban direct shipments from out-of-state wineries are Alabama, Arizona, Arkansas, Connecticut, Delaware, Florida, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Ohio, Oklahoma, Pennsylvania, New Jersey, New York, South Dakota, Tennessee, Utah and Vermont.

– Portions of a story by Associated Press writer Hope Yen were used in this report.

Reprinted with permission from The Amador Ledger Dispatch