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Friday, December 16, 2005

Law - New Michigan law permits vintners inside and outside the state to ship their products directly to consumers

"Governor signs bills allowing direct wine shipments to consumers" is the headline to an AP story published in the Detroit Free Press. Some Quotes:

TRAVERSE CITY - Michigan's emerging wine industry could become a big-time player now that vintners inside and outside the state can ship their products directly to consumers, a spokesman said.

"It opens us up to becoming a national wine industry," Donald Coe, president of the trade association WineMichigan, said Thursday after Gov. Jennifer Granholm signed legislation granting direct-shipping rights. With out-of-state wineries allowed to sell directly to Michigan residents for the first time, Michigan wineries will get the same access to buyers in other states, said Coe, managing partner of Black Star Farms in Suttons Bay. * * *

The legislation represents a hard-won compromise between vintners and wholesalers - regulated middlemen who buy from winemakers and sell to licensed retailers.

The U.S. Supreme Court this year struck down Michigan's policy of allowing only in-state wineries to ship directly to Michigan residents, saying it gave them an unfair competitive advantage. Under the new laws, any winery can send up to 1,500 cases a year to Michigan residents.

But the laws continue to require out-of-state wineries to use a wholesaler to get their wines to Michigan restaurants and retailers, while in-state wineries can sell directly to those establishments.

In a Dec. 6 letter to legislative leaders, state Attorney General Mike Cox warned that such unequal treatment "is very vulnerable to a constitutional challenge." If the courts threw out that provision, all sales to restaurants and retailers would have to go through wholesalers.

Direct shipment to consumers by in-state and out-of-state wineries could continue. Even so, Cox said, Michigan would have to pay the costs of defending a lawsuit - and, if it lost, the prevailing sides attorney fees.

Representatives of Michigan vintners and wholesalers who attended the signing ceremony said their compromise included an agreement not to challenge the laws in court. But the deal doesnt cover out-of-state interests.

Sen. Michelle McManus, R-Lake Leelanau, a sponsor of the legislation, said it focused primarily on direct shipment to consumers because that was the subject of the Supreme Court ruling.

Two related stories from earlier this month. The Peru Indiana Tribune had a story Dec. 5, by Sherry Loshnowsky. Some quotes:
A local winery is taking advantage of a recent ruling that allows Indiana wineries to ship their products to homes inside the state, at least for now.

A Marion Superior Court judge signed a preliminary injunction last week that allows in-state wine shipments through March 1. By that time, some wineries hope, the state legislature could pass a bill allowing in-state wine shipments.

The ruling is the result of a lawsuit filed last month by nine state wineries against the Indiana Alcohol and Tobacco Commission. After a U.S. Supreme Court decision overturned wine shipping laws in New York and Michigan, the commission sent a letter to Indiana wineries barring them from shipping wine to in-state customers.

[See this Nov. 29th ILB entry for more information on the Marion County court ruling.]

The NY Times had a story Dec. 9th, that may not be freely availab;le on line much longer, headlined "Still No Wine in the Mail, Months After a New Law." Some quotes from the lengthy piece:

New Yorkers with a taste for California syrahs or the latest Willamette pinot from Oregon were heartened by the State Legislature's decision last summer allowing them to buy these and other out-of-state wines directly, either through the Internet or over the phone.

But as the holiday season nears, wine lovers have bumped up against the bureaucratic ways of New York State, whose agencies - as of Thursday night at least - have yet to carry through on the law and allow shipping companies to actually deliver wine to New York from other states.

Officials with FedEx, U.P.S. and groups representing California wine growers say that one of the holdups has been the state's demand that delivery employees, who work with hand-held computers, fill out cumbersome paper forms when making the deliveries.

An official for the State Liquor Authority said that the paperwork requirement was not the cause for the delay. And on Thursday evening, a state official said that an announcement would be made on Friday that U.P.S. had been approved to make wine deliveries in the state. But almost five months after the law's passage, wine lovers might be excused for not believing it until they see it.

Posted by Marcia Oddi on December 16, 2005 09:02 AM
Posted to General Law Related