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Sunday, February 12, 2006

Ind. Law - Wine shipping bill to be heard Wednesday in Senate committee

According to the Gary Post-Tribune, the wine shipping bill, HB 1190, will be heard Wednesday in Senate committee. (See also HB 1250)

"State lawmakers turn winery tourism industry sour" is the great headline to this lengthy story by Avon Waters today in the Anderson Herald Bulletin. Some quotes:

Two new bills regulating the sale of wine in Indiana may turn the Indiana wine industry into sour grapes.

If passed, winery industry officials estimate all but one of Indiana’s 34 wineries and tasting rooms in the state would eventually close.

The bills being considered by the Indiana Legislature will shut down Indiana wineries, said Tia Agnew, co-owner with husband Brett Canaday, of New Day Meadery in Elwood. The Meadery is scheduled to open in March.

“Our whole business plan is based on direct sales and sales to mom and pop retail stores and to local restaurants,” Agnew said. “The bills take two out of three avenues of sales away from us. We’re Indiana’s smallest winery. We are a boutique winery and it could put us out of business.”

This is not just an Indiana story, of course, as earlier ILB "wine shipping" entries hopefully have indicated. In many states the outlook this year for small wineries is not good.

An active battle against the wholesalers appears to be going on in Illinois, with 5,300 consumer letters reportedly sent to Illinois legislators in January, according to this press item from BusinessWire.com.

Here are two recent stories ot of Maryland, this one headlined "Local vineyards may wither: New ruling mandates use of middleman," and this one, "Wineries decry new sales rule: Officials, lawmaker say restriction could ruin state’s growing industry." A quote from the beginning of the latter:

The state Comptroller’s Office stunned Maryland winery officials last week when it told them they may no longer sell directly to Maryland retailers and restaurants, effective March 31.

The restriction could devastate Maryland’s burgeoning wine industry, says Kevin Atticks, executive director of the Maryland Wine Association, a trade group.

"If and when this takes effect, it has the potential of putting a lot of small farm wineries out of business,” Atticks said. ‘‘Maryland wineries have relied on the ability to deliver [directly] to the restaurants and retailers in this state.”

Carol Wilson, president of the association and owner of Elk Run Vineyards in Mount Airy, said the prohibition would ‘‘irreparably harm” the industry.

The new restriction helps Maryland comply with last year’s U.S. Supreme Court ruling that state laws that favor in-state over out-of-state wineries violate the Constitution’s Commerce Clause, according to the comptroller’s notice.

Unlike in-state wineries, out-of-state wineries must reach consumers via Maryland’s three-tier system, selling to a distributor, which then sells to retailers, which then sell to consumers.

Industry leaders say the new rule is a reaction to a suit filed against the state last year in U.S. District Court by Robert Bushnell of Silver Spring and Wright Wine Works of Barto, Pa. The plaintiffs claim inequitable treatment of out-of-state wineries under Maryland law. The goal of the suit, said Stephen Wright, owner of Wright Wine Works, is to open up Maryland for direct shipping to consumers.

Wright said the case finds its roots in the office of Indiana lawyer James A. Tanford, who, following last year’s Supreme Court ruling, realized state legislatures would be slow to comply. Tanford began recruiting wineries and consumers to file suit in states — including Maryland — that would be affected by the high court ruling, according to Wright.

A phone call to Tanford seeking comment was not immediately returned.

Posted by Marcia Oddi on February 12, 2006 05:41 PM
Posted to Indiana Government