Court ruling pleases local wineries

By DEBRA HAIGHT / H-P Correspondent

Area wineries are generally pleased with Monday's U.S. Supreme Court ruling that states can't ban out-of-state wine sales, but they caution that new state legislation is needed before they can start shipping wine across state lines.

Monday's 5-4 court decision ruled that laws in Michigan and 23 other states are discriminatory and anti-competitive. Justice Anthony Kennedy noted that while states have broad power to regulate liquor, that power doesn't allow them to ban or severely limit the direct shipment of out-of-state wine while at the same time authorizing shipments by in-state producers.
Joe Herman of Karma Vista Vineyards in Coloma said he's looking forward to the opportunity to ship to customers in Indiana and Illinois and isn't worried about the possible increase in competition from out-of-state wineries.

"Three-fourths of our business is based on the tourist business," he said. "We always get inquiries, especially at the holidays, for people wanting to buy our wine to give as gifts. ... For us, a lot of our business is out-of-state people, and this is another tool to let us go directly to our customers.

"I think this helps small wineries immensely even though we might not make a whole lot of money right away," he said. "We still have to have legislation go through in Lansing and then each individual winery will have to figure out how to do it."

Herman doesn't foresee any problem with the technical side of the situation such as collecting sales and liquor taxes or making sure those purchasing wine and other products from out-of-state are of legal age. "There are services available to check out identifications over the Internet," he said.

He said this ruling is especially beneficial for small, specialty wineries like his that don't produce the volume needed to have contracts with distributors. While distributors may be worried about losing business themselves, he doesn't see it happening.

Another small winery "pleased but guarded" with Monday's ruling is the Round Barn Winery in Baroda. Owner Rick Moersch said his business has been hurt in the past by not being able to ship his products to customers in Indiana and Illinois.

He also thinks the ruling is good because he favors free trade.

He agrees with those of his customers who didn't understand the reasons for the past prohibitions.

"You can bring garbage in from other states and dump it here, but it's illegal to bring any wine in or ship wine direct to someone outside of the state," he said.

The ruling also helps because he can't sell all of his specialty wines through a distributor.

"We have a great variety of products, but not a lot of volume," he said. "We make 52 different wines and brandies and there aren't 52 spots on the store shelves. This will be like going to the fruit market and being able to sell directly to the people."

Moersch said the ruling will not just help wineries.

"This will help the growers too," he said. "Anytime you can sell fruit, the bottom line is that it's a good thing. We want to help maintain family farms, and our varieties showcase the agricultural diversity of the area we live in. Tourists are our business and without agri-tourism we'd be out of business."

Paul Landeck, vice president of Tabor Hill Winery and Restaurant in Baroda, said he received numerous e-mails from people across the country as soon as word of the court ruling came down.

"We'd love to be able to ship to people in other states. We have so many customers from out of state," he said.

"It's not quite a slam dunk yet, but people think it is," he added. "We think it's a step in the right direction to level the playing field. We still have some hoops to jump through in terms of shipping and identification concerns, but the tools are already in place. such as requiring that an adult sign for the package."

The only cloud he sees on the horizon is possible opposition to the necessary state legislation from wholesale distributors and the state Liquor Control Commission.

Either or both could pressure legislators to prohibit all shipping of wine and other alcohol products within the state, which would make the Supreme Court ruling moot, he said.

An official of St. Julian Winery in Paw Paw, the area's biggest winery, doesn't think the ruling have as much of an effect on its business as it will on smaller wineries.

St. Julian Winery already works with distributors that take its wines to 15 other states. Company representative Gene Braganini said the ruling will allow St. Julian to directly ship wine to more than 200 of its wine club customers in Indiana and Ohio and to areas where it has no distributors right now.

He said he and other Wine Michigan organization members have been waiting for the court ruling for the last two months and are now ready to lobby the State Legislature to get a bill passed in the next month or so. That legislation would cover topics such as age verification for customers as well as how to handle permits and licensing from other states.

"Overall, it's a wonderful day for Michigan wineries. We're ecstatic," Braganini said. "It will make a big difference for the Michigan wine industry as a whole. It will be huge for the smaller, boutique wineries. It gives them a little more access to free competition. For us, it will mean higher customer satisfaction. Those visiting us from other states will now be able to get our products better."