|
| |
|
| |
|
|
|
May 17, 2005
Vintners laud Supreme Court shipping rulingDecision strikes down Michigan, New York lawsBy Record-Eagle business editor TRAVERSE CITY - Area winemakers are toasting a Supreme Court decision that strikes down a state law prohibiting wineries in other states from direct shipments of their products into Michigan. Local vintners are happy with the ruling because they want to be able to ship their wine to customers in other states - but are concerned with how state lawmakers might react to the decision. "We won a really big victory here ... but we haven't won the war," said Ed O'Keefe Sr., founder of Chateau Grand Traverse in Peninsula Township. "Now the battle begins." In a 5-4 decision issued Monday, the high court struck down laws in Michigan and New York that prohibited out-of-state vineyards from making direct sales to customers, a practice that has flourished because of the Internet and growing popularity of winery tours. Supporters said those laws were aimed at protecting local wineries and limiting underage drinkers from purchasing wine without showing proof of age. But the court majority said the state bans are discriminatory and anti-competitive. "States have broad power to regulate liquor," Justice Anthony Kennedy wrote for the majority. "This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers ... if a state chooses to allow direct shipments of wine, it must do so on evenhanded terms." How state legislators and regulators react to the ruling will determine its long-range implications, industry officials said. Donald Coe, president of the WineMichigan trade association, said his group wants to see the state "level up" regulations so wineries in and out of Michigan would come under the same distribution limits and taxation rules. Coe said the industry doesn't want to see lawmakers or the Michigan Liquor Control Commission further restrict wine shipments in response to the decision. "The consumer should be able to find the wine they like to have," said Coe, managing partner at Black Star Farms of Suttons Bay. "It's easy for the state Legislature to set up rules and regulations to make that happen." Consumers like Paul Owsen of Traverse City said the ruling makes sense. He's not a fan of Michigan wines and said consumers should have direct access to the products they prefer. "I buy what I like," Owsen said outside the Blue Goat wine and cheese shop in Traverse City. "You can't stop people from getting something they want." The wine industry is booming, with an estimated $21.6 billion in sales and tourists flocking to wineries for tastings and tours. But smaller wineries say they can't compete with huge companies unless they can sell directly to customers over the Internet or by allowing visitors to their wineries to ship bottles home. The Supreme Court case centered on the 21st Amendment, which ended Prohibition in 1933 and granted states authority to regulate alcohol sales. Nearly half the states subsequently passed laws requiring outside wineries to sell their products through licensed wholesalers within the state, allowing state governments to collect millions in alcohol taxes. But the Constitution also prohibits states from passing laws that discriminate against out-of-state businesses. That led to a challenge to the Michigan and New York laws. Cathy Tavick, executive director of the Michigan Licensed Beverage Association, said her organization supported the state law. "The sense was we had a happy medium in Michigan," she said. "Everybody felt that the system we had in place ... was working. I guess the courts see a different scenario." The decision puts in doubt laws in 24 states that ban out-of-state shipments, although the opinion suggests the laws will be upheld so long as in-state and out-of-state wineries are treated equally. The Associated Press contributed to this report.
|
|
Record-Eagle/Douglas Tesner
