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Thursday, March 23, 2006

Ind. Law - Winemakers raise glasses to new law; future law challenges

"Winemakers raise glasses to new law" is the headline to a story by Jonathan Hiskes in the Brown County Democrat. Some quotes:

Brown County wine dealers are relieved, if not overjoyed, after a compromise between alcohol distributors and Indiana winemakers passed through the state legislature last week, ending a dispute that threatened to cripple the state’s budding wine industry.

In the words of Brown County Winery owner David Schrodt, Indiana’s 32 wineries “came out alive, but we sure got beat up.”

“It’s a huge relief,” he said of the deal forged by lobbyists for the distributing and winemaking industries. “It’s a convoluted, bureaucratic solution, but that’s the alcoholic beverage business. We’re supposed to put on a happy face about all of this—and it’s really not too bad—but the whole process was so discouraging.”

Mr. Schrodt said his winery in Gnaw Bone earns about 5 percent of its profits through shipping wine, so he had less at stake than others, like Plainfield’s Chateau Thomas Winery, which has a tasting room in Nashville.

“We were fighting for our lives,” said owner Charles Thomas, who testified along with other winemakers at the statehouse. “This was all brought on by the wholesalers. We were content with the way things were, making and selling our wine.”

Dr. Thomas said about 30 percent of his sales are from shipped wine, which was banned by the state Alcohol and Tobacco Commission for much of last year. Indiana wineries sued the commission last November over the sudden ban, but dropped the lawsuit as part of last week’s compromise.

Indiana Legislative Insight this week had this insight on future challenges:
Indiana’s wineries and wholesalers agreed upon a compromise measure for in-state shipping that Senate President Pro Tem Bob Garton (R) approved for consideration after securing a commitment from the nine Indiana wineries who filed suit over enforcement issues in Marion County Superior Court last November to drop the litigation.

More was brewing below the surface here, including the continued viability of the state’s three-tier distribution system. Further fermenting the debate was a March 8 speech by Indiana University law professor Alex Tanford to a National Alcohol Beverage Control Association legal forum. Tanford, a key player in the U.S. Supreme Court case attacking state restrictions on direct shipping of wine, told officials from states around the country that “We will keep suing you until the citizens of your state can go on the Internet and order wine from out of state” without any legal barrier. He also suggested that simply barring all direct shipments may not allow states to meet the standards imposed by the Supreme Court in Granholm v. Heald . . . and cautions that “What’s true for wine is likely to be true for beer,” and “What’s true for wineries is probably true for retailers.”

Posted by Marcia Oddi on March 23, 2006 11:03 AM
Posted to Indiana Law