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For wine lovers, a bouquet May 17, 2005
BY SYLVIA RECTOR and JENNIFER DIXON
FREE PRESS STAFF WRITERS
Wine lover Art
Lokar of Livonia planned to open a 2001 Foley Claret -- fittingly, a
rare Napa Valley wine not sold in Michigan -- and grill "a nice
tenderloin filet" Monday night to celebrate the U.S. Supreme Court's
decision clearing the way for out-of-state wineries to ship their
product directly to consumers in other states.
"I think it's great," he said of the ruling, which struck down laws in
Michigan and New York forbidding interstate wine shipments.
Like thousands of connoisseurs, Lokar often orders wines not available
in Michigan and has them shipped to Chicago or other unrestricted
locations, where he can go pick them up and legally bring them home. He
figures he will save $400 to $500 a year in travel and shipping fees
because of the court's ruling.
That's one reason experts say that high-end purchasers like Lokar are
the biggest and most obvious beneficiaries of the decision. But even
average consumers will benefit, especially those interested in
purchasing wines online.
In July 2003, the Federal Trade Commission said in a report that
e-commerce in wine could save consumers money, especially on higher-end
wines. The study said consumers using the least expensive shipping
method could save an average of 8% to 13% on wines costing more than
$20 a bottle and an average of 20% to 21% on wines costing more than
$40 a bottle.
It's unclear how soon practices will change, however.
The high court's 5-4 ruling affects wine regulations in 24 states. The
justices said that states cannot set a double standard, allowing
in-state wineries to ship to someone's home while forbidding other
states' wineries to do the same. Now those states, including Michigan,
will have to pass new laws regulating all wine shipments.
Lawmakers could decide to open up the state to shipments from
out-of-state wineries, but they could also shut down all shipments in
the state, effectively ending the rights of Michigan wineries to send
their wines to Michigan consumers.
The fight over wine shipments is expected to pit the state's beer and
wine wholesalers, who have one of the most influential lobbying
associations in Lansing and oppose direct shipments, against wineries,
wine connoisseurs and free-market advocates.
The chairwoman of the Michigan Liquor Control Commission, Nida Samona,
said she will continue to enforce the state's laws against out-of-state
shipments.
For now, the old rules are followed. Online wine retailer NapaCabs in
Chino, Calif., for example, won't fill orders from Michigan and similar
states until the states have worked out the details, said sales
representative Peter Kao. The company, at www.wine-club-central.com, has an e-mail list of about 15,000 customers, which Kao predicts will "dramatically increase."
Some Michigan wine retailers were predictably unhappy with the decision, fearing it could hurt their sales.
"You will have to spend $35 to $60 a case to have it shipped. You
aren't going to pay that," said Denny Walsh, owner of Ye Olde Wine
Shoppe in Rochester Hills.
Walsh doesn't want more competition. "Look around. Stores are closing," he said.
Tom Natoci at Cloverleaf Fine Wines in Southfield said he didn't expect
much negative impact from the ruling, however. The boutique wines so
highly prized by collectors were already being brought into the state
through two-party shipping plans. "The people who wanted to get those
wines were getting them anyway," he said.
The Michigan lawsuit was brought by wine columnists Ray and Eleanor Heald of Troy.
Contact SYLVIA RECTOR at 313-222-5026 or rector@freepress.com.
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