Tuesday, May 25, 2004 Supreme Court says it will sit down with wine case, examine restrictions
-------------------------------------------------------------------------------- State laws prohibit wineries from directly shipping to many buyers
By Anne Gearan The Associated Press
WASHINGTON - God made only water, but man made wine, wrote author Victor Hugo. He neglected to mention that man also made laws, courts and bureaucracies - which is how the Supreme Court came to referee a fight among state governments, wineries and consumers over the sale of wine across state lines.
The high court said Monday it will hear three appeals involving state laws that prevent consumers from buying wine directly from out-of-state suppliers.
The dispute pits states and a network of alcohol wholesalers against wineries that want to sell their products over the Internet and by phone.
It also pits one part of the Constitution against another, and both sides can point to recent court rulings for support.
Consumers are caught in the middle, unable to order a favorite U.S. vintage because their home state supplier doesn't stock it, or forced to pay a hefty premium to a middleman if they can get the wine at all, lawyer Clint Bolick said.
"It's protectionist, and it's discriminatory," said Bolick, who represents a family-run winery in Virginia that claims it cannot get its bottles to buyers in New York.
The court will hear that case as well as one involving husband-and-wife wine reviewers in Michigan who challenged the rules and won their case in federal court.
At least 20 states prohibit or constrain direct interstate shipment of wine to consumers, including Kentucky and Indiana. Those two states, and Ohio, are among the 36 that asked the Supreme Court to review laws about interstate wine sales.
Some states say restricting interstate wine shipments helps prevent fraud and underage drinking. They also collect millions of dollars from alcohol taxes.
At issue in the Supreme Court case are laws in Michigan, New York and six other states - Florida, Indiana, New Jersey, Maine, Ohio and Rhode Island. Wineries outside those states cannot ship directly to in-state buyers, and consumers cannot get a given wine if it is not among those carried by the state-approved middlemen.
But wineries based in those states can go around the state distribution system and sell directly to in-state buyers.
Wine is a fast-growing industry. Sales of wine in the United States reached $21.6 billion last year, according to the Wine Institute, a California lobbying organization.
Alcohol is one of the most heavily regulated products in the country, but the rules for who can sell what to whom were generally set before the nationwide growth of small wineries and wine tourism - and long before the Internet emerged as a marketplace.