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May 3, 2005 Letting Winemakers Breathe New ruling could pull the cork on law that restricted California vintners in out-of-state sales. By Andrew Edwards, Daily Pilot Newport Beach vintner Richard Moriarty is not yet able to ship cases of his Back Bay Cuvee all across the country, despite last week's Supreme Court ruling against two states' laws that prohibited him from selling his product directly to customers. Moriarty is waiting to see how other states react to the court's decision. Last Monday, the court issued a 5-4 ruling that Michigan and New York laws banning direct sales from out-of-state wineries illegally discriminated in favor of in-state producers, who were allowed to make direct online sales to customers. The court ruled states can ban direct wine sales, but must treat in-state and out-of-state wineries equally. The case was sent back to lower courts for future action. Moriarty and other California vintners can make direct sales to consumers in the 26 states that allow the practice, according to the Wine Institute, a San Francisco-based group that lobbies for California wineries. Currently, most wine from Moriarty's Newport Beach Vineyards & Winery is sold within a 5-mile radius of his Back Bay vineyard. But if other states' laws become more favorable, he may send more bottles further away. "We probably will ship more," Moriarty said. "New legislation obviously gives us more opportunities." Like Moriarty, others are playing the waiting game. "It's really positive to begin with, as to how different states are going to act remains to be seen," said Albert Paul, vice president of sales and marketing for Bianchi Vineyards. Bianchi Vineyards is a Paso Robles winery with sales offices in Newport Beach. Lobbyists representing wineries view the court's ruling as a tool to pry open the legal barriers blocking California vintners from making direct sales. The Supreme Court only considered Michigan and New York laws. However, Steve Gross of the Wine Institute said he thinks other states will be forced to reconsider laws governing wine shipments. "We can use this [ruling] for momentum," Gross said. A loosening of wine shipping laws could be a short-term problem for retailers, said Dan Rhodes, a buyer for Hi-Time Wine Cellars in Costa Mesa. If customers can buy a wider variety of wine without having to visit stores, retailers like Hi-Time may receive smaller shipments from suppliers. In the long run, Rhodes said wine sellers are hoping complicated rules that govern how they are allowed to do business from state to state will be simplified. "That's going to be the next phase of this thing," Rhodes said. Wholesalers, on the other hand, will likely try to limit direct sales, Paul said. On the day of the ruling, Wine & Spirits Wholesalers of America -- a trade organization representing alcohol wholesalers -- issued a release in support of a three-tiered system that requires vintners to sell to wholesalers, who in turn provide wine to retailers. For now, Moriarty is looking forward to harvesting this year's harvest . Tiny clusters of green grapes are already growing along his vineyard, and he credits the winter rains for what could be an exceptional crop. "This is just uncanny; this is months -- at least a month, ahead," Moriarty said as he examined a grape cluster. * ANDREW EDWARDS covers business and the environment. He can be reached at (714) 966-4624 or by e-mail at andrew.edwards @latimes.com. |
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