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Sunday, March 12, 2006

Ind. Law - Status of wine shipping in Indiana, and nationally

Niki Kelly of the Fort Wayne Journal Gazette gives a rundown today on legislation still pending in the final two days of the session, this Monday and Tuesday. Here is what she writes about wie shipping:

A key House Republican is trying to revive language in the waning days that would let Indiana wineries continue to ship their product directly to in-state customers with some limits. It may be inserted into a House bill on pretrial court fees.

Earlier this session, the wineries and wine wholesalers agreed on a proposal to allow direct shipments that state alcohol officials recently halted as a violation of Indiana law.

But Senate President Pro Tem Robert Garton, R-Columbus, killed the bill when he found out several lawsuits are pending on the issue.

The wineries have a temporary injunction allowing direct shipping that runs out at the beginning of April.

Rep. Matt Whetstone, R-Brownsburg, has a plan that would let wineries ship up to 24 cases of wine to an individual in one year but no more than 3,000 cases to all customers. But only wineries that sell less than 600,000 gallons of wine would be eligible.

That angers some of the state’s mid- to-larger-size wineries that feel it would limit their ability to grow.

“We are still disappointed in the direction the legislation is moving,” said Larry Satek, of Satek Winery in Fremont, who is president of the Indiana Winegrowers Guild. “Consumers should know that if this legislation passes, their freedom of choice will be compromised.”

Unfortunately, there is nothing new yet that was not in the ILB entry from last Thursday, March 9th.

Nationally. The Washington Post has a story today headlined "Wineries Push to Avoid Middlemen: 3rd-Party Requirement Looms Unless Bills Pass." Some quotes:

For 20 years, Leesburg winemakers Lew and Amy Parker have driven their product to market in a Volvo sedan. The trunk holds 17 cases, and the drive to the local wine shop or restaurant takes about 10 minutes.

Such a simple system worked for many small wineries in the Washington area for decades. But last year a federal district court in Virginia and last month the Maryland comptroller said in-state wineries should not be allowed to distribute wine without going through middlemen. In both cases, the practice was deemed unconstitutional in response to lawsuits by out-of-state wineries that were denied the same privilege.

Wineries in both states have turned to the legislatures for help. In Maryland, House and Senate committees considered bills last week that would preserve in-state wineries' ability to sell to retailers by putting out-of-state wineries on equal footing. Without a legislative solution, the deadline to stop distributing wine is May 31. In Virginia, a similar bill died in committee a month ago, and loading up the family car is no longer a legal method of distribution.

In a landmark case about shipping wine directly to consumers, the U.S. Supreme Court ruled last year that distribution laws have to be consistent for in-state and out-of-state wineries. What was initially seen as a boon to small wineries has spelled trouble. Some states chose to eliminate shipping privileges entirely, which threatened the economic viability of some small wineries. Wholesale distribution privileges came under scrutiny, too.

"The wine industry is in a state of chaos," said Lew Parker, owner of Willowcroft Farm Vineyards and vice president of the Virginia Wineries Association. "The benefits of the Supreme Court decision are not being felt anywhere."

Posted by Marcia Oddi on March 12, 2006 10:09 AM
Posted to Indiana Law