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Thursday, December 15, 2005

Breaking news

Governor signs bills allowing direct wine shipments to consumers

December 15, 2005

TRAVERSE CITY (AP) — Michigan’s emerging wine industry could become a big-time player now that vintners inside and outside the state can ship their products directly to consumers, a spokesman said.

“It opens us up to becoming a national wine industry,” Donald Coe, president of the trade association WineMichigan, said Thursday after Gov. Jennifer Granholm signed legislation granting direct-shipping rights.

With out-of-state wineries allowed to sell directly to Michigan residents for the first time, Michigan wineries will get the same access to buyers in other states, said Coe, managing partner of Black Star Farms in Suttons Bay.

“I have 60,000 visitors a year, and fully 25 percent of them come from outside Michigan,” he said. “Many of them have no access to our wines when they get back to their states because we’re such a small winery, we don’t have distribution in those states yet.

“They now have an opportunity to order the wines from us, and we can ship to them.”

Major wine publications likely will give the Michigan industry more coverage now that readers across the nation can order its brands, Coe said.

Granholm signed the bills during an appearance in Traverse City, heart of northern Michigan wine country. Twenty of the state’s 42 wineries are in Grand Traverse and Leelanau counties.

Michigan’s $75 million industry ranks ninth in the country in wine grape production, with a combined 1,300 acres.

“We want to make sure as a state that we continue to promote the great wine that we’ve got,” Granholm said.

The legislation represents a hard-won compromise between vintners and wholesalers — regulated middlemen who buy from winemakers and sell to licensed retailers.

The U.S. Supreme Court this year struck down Michigan’s policy of allowing only in-state wineries to ship directly to Michigan residents, saying it gave them an unfair competitive advantage. Under the new laws, any winery can send up to 1,500 cases a year to Michigan residents.

But the laws continue to require out-of-state wineries to use a wholesaler to get their wines to Michigan restaurants and retailers, while in-state wineries can sell directly to those establishments.
In a Dec. 6 letter to legislative leaders, state Attorney General Mike Cox warned that such unequal treatment “is very vulnerable to a constitutional challenge.”

If the courts threw out that provision, all sales to restaurants and retailers would have to go through wholesalers.

Direct shipment to consumers by in-state and out-of-state wineries could continue. Even so, Cox said, Michigan would have to pay the costs of defending a lawsuit — and, if it lost, the prevailing side’s attorney fees.

Representatives of Michigan vintners and wholesalers who attended the signing ceremony said their compromise included an agreement not to challenge the laws in court. But the deal doesn’t cover out-of-state interests.

Sen. Michelle McManus, R-Lake Leelanau, a sponsor of the legislation, said it focused primarily on direct shipment to consumers because that was the subject of the Supreme Court ruling.

The bills include provisions to keep minors from buying wine through direct shipment. They also would let the state Liquor Control Commission levy a yearly $100 license fee to fund regulation of direct-shipping vendors.

Posted by mardenhill 12/15/2005 11:11:00 PM    

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