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Wine Protectionism Returns:

In 2005 the Supreme court invalidated Michigan and New York state laws limiting direct-to-consumer sales by out-of-state wineries. In some states it appears that the benefits for oenophiles may be short lived. Here in Ohio, for example, the state legislature has just adopted a new law that will, once again, effectively prohibit direct-to-consumer sales by out-of-state wineries. As the Cleveland Plain Dealer reports, a provision was quietly slipped into the state budget that will prohibit wineries that produce more than 63,000 cases per year from shipping wine directly to Ohio consumers. Conveniently enough, it appears that all of Ohio's own wineries produce less wine.

FantasiaWHT:
Dormant Commerce Clause, no?
9.26.2007 8:32pm
paa:
Out of state wineries that make less than 63k cases aren't affected, are they? I don't know how many wineries that is, relative to the total number of out of state wineries, but the law won't prevent anyone from getting their case of screaming eagle shipped to OH.

It doesn't seem accurate to say that "Here in Ohio, for example, the state legislature has just adopted a new law that will, once again, effectively prohibit direct-to-consumer sales by out-of-state wineries."
9.26.2007 9:25pm
Cornellian (mail):
I assume the faceless hack behind this legislation has ascertained that the people of Ohio order disproportionately from a few large wineries (probably all of which are in California) and that those wineries all produce more than 63k cases per year because, suprise! people like their wine. So technically someone in Ohio will still be able to order a case of "Vermont Blush" but what Ohio wine distributors really want, and what this law is designed to deliver, is to prohibit the people of Ohio from ordering the wine they actually want without paying a middleman tax.
9.26.2007 10:44pm
SFBurke (mail):
There are actually not very many wineries that produce more than 63K case per year. Probably all that do have distributors in Ohio (and there is rarely much benefit from ordering directly and paying for shipping than buying through local distribution channels). There are lots of excellent wineries that produce less than 10K cases per year; these are true family wineries not overpriced boutiques such as Screaming Eagle. I would expect that the Ohio law will have very little impact on the ability of Ohioans to get the wine they want at reasonable prices.

Of course none of the foregoing changes the fact that the Ohio law is a blatantly unconstitutional protectionist action.

SFB
9.27.2007 2:22am
Jack S. (mail) (www):
Ha. This reminds me of Cassis de Dijon in the EU. Germans put taxes, certifications, prohibitions on anything over something like 8% alcohol. Strangely, or not so strangely, there was little or no alcohol produced in Germany that ever exceeded this number. They lost at the ECJ.
9.27.2007 3:30am
Eli Rabett (www):
If this button gets pushed, wineries will sprout boutiques that produce whatever the limit is of the same wines with a slightly different label. If they give a damn of course.
9.27.2007 8:29am
c.l. ball:
Is there a legislative finding that makes the 63,000 figure anything other than arbitrary? If not, doesn't it violate the Due Process clause?
9.27.2007 10:12am
Grange95 (mail):

Ha. This reminds me of Cassis de Dijon in the EU. Germans put taxes, certifications, prohibitions on anything over something like 8% alcohol. Strangely, or not so strangely, there was little or no alcohol produced in Germany that ever exceeded this number. They lost at the ECJ.


A lot of German wine for export is Riesling, which in cooler climates (like Germany) typically makes a lower alcohol wine (8-12%). Compare this to some of the big bruisers from hot climates like Australia and California where wines can get up into the 14-16% alcohol range pretty quickly. Interestingly, I think the ATF regs classify table wine as below 14% alcohol, so some CA wines (zins in particular) end up in a different level of regulation and taxation (not sure of the specifics).

As for Ohio, let them drink soda! Here in Iowa we have full wine-shipping reciprocity (which is good for both instate wineries trying to export to other states, and for instate wine drinkers).
9.27.2007 10:38am
MH (mail):
Grange95,

I hope PA copies Iowa in allowing full reciprocity. However, when it does, I am very unlikely to ever order an Iowa wine. I doubt I am alone in this.
9.27.2007 11:29am
catullus (mail):
At least we know that they have heard about wine in Ohio.
9.27.2007 12:25pm
Cornellian (mail):
They make wine in Iowa?
9.27.2007 1:41pm
JCD (mail):
I assume that the only law that will be "short lived" here is going to be Ohio's law, which facially defies the Supreme Court ruling. It was pretty funny hearing state politicians defend this one; none of them had heard of the Supreme Court case.
9.27.2007 3:43pm
Bill Poser (mail) (www):
Cornellian writes:

They make wine in Iowa?

They make wine in Montana: Montana wine! I've actually driven by one Montana winery, though I haven't tasted the product.
9.27.2007 4:20pm
Heather:
Iowa wine.

They're starting to win national awards. But go ahead, stick with the Boone's Farm out of coastal elitist snobbery :P
9.27.2007 5:48pm