Click to be added or removed.Wine ping.
Posted on 06/17/2005 8:02:56 PM PDT by LibWhacker
Michigan - Some Michigan wineries have their backs against the wall.
A new bill that could become law might have an expensive effect on the way business is done, and more importantly, that bill could shut down some wineries.
At present, Michigan law states that wineries can directly ship to customers without going through a distributor. That may change soon and for some wineries that is bad news.
Michigan’s wine industry has been successful over the last 10 to 20 years, but the new law could have a harmful effect. Tabor Hill Vice President Paul Landeck said, “Last month the Supreme Court declared Michigan laws to be discriminatory in that allowing Michigan wineries to direct ship to customers, while not allowing out of state wineries.”
So the U.S. Supreme Court gave the Michigan Beer and Wine Wholesalers Association a choice to either let everyone ship directly to Michigan customers or outlaw it altogether.
The association chose to outlaw. “The kiss of death to many wineries in the state of Michigan, especially the smaller start up wineries,” said Landeck.
The association says they tried hard to keep things they way they are now. Since they were only given days to draw up a bill with changes, they had to do away with direct sales to customers.
The association says they did not have time to set limits and stipulations for wineries to ship to Michigan customers.
Michigan wineries say keeping it the same wouldn't hurt. “We've been doing that in Michigan for 20-30 years and never had a problem,” said Landeck.
What the smaller wineries are worried about is going out of business. They're not in the position to have distributors carry or promote their wine.
The only way they can get to customer is directly, so if the bill passes business could dry up.
Special Interests Attempting to Limit Your Selection and Pocket Your MoneyTalk about the law of unintended consequences!SB 118 (Chesbro) is a bill in reaction to the US Supreme Court direct wine shipping decision that prohibited discriminatory legislation. The bill originally would have created a permit that could be applied for by anyone licensed to sell wine to consumers (wineries and wine retailers) in any state. The permit would require registration with the California ABC, payment of California taxes, the same protections against delivery to minors that currently exist for CA wineries and retailers, limitations on shipment volume and would give the ABC the authority to regulate the shipments.
However, the mega-wholesale distributor interests in CA (Southern Wine and Spirits and Young's Market Company) have called in their political muscle in order to remove out-of-state retailers from the permit system. Under the version of the bill approved on June 14th, only a select few retailers outside of the state of California may even apply for a permit.
This is WRONG. The proposed permit system MUST provide for the ability of all retail licensees (wherever located) to participate freely. If retailers outside of CA are excluded from the CA market system, other states would retaliate by excluding California retailers from their markets. The goal of the bill was to encourage the creation of a national system of permits and licenses that provides the opportunity for every licensed merchant to participate, no matter where that merchant is located. This would be in the interest of all consumers, whether in CA or elsewhere.
Retailers in all states invest significant sums of money in inventory from multiple winery and importer sources. Retailers hold that inventory (often for years) and make it available in a convenient way to consumers who know and trust the merchant. Those customers could be across the street or across the country. That is the reality of the current market, especially for the expensive, limited production and usually allocated, collectible wines from California and the rest of the world. Requiring these wines to go back up through the three-tier system after they have already traversed it once (if they even could, currently they would just be unavailable outside of California, or unavailable to California if they are located in another state) would give the wholesalers a double profit margin; certainly good for the wholesalers, but not very good for the retailer or for the consumer. Who pays? You bet that the consumer pays.
The Supreme Court in the Granholm case condemned state laws that discriminated against out-of-state interests in favor of identically situated in-state interests. This statute would perpetuate discrimination WITHIN the California market by attempting to keep retailers from outside of California OUT of the market. While we think that any such effort would be unconstitutional as to retailers outside of California under Granholm, we do not want to fight the statute after it is written. Our goal is to make sure that the statute doesn't get passed with that flaw in the first place!
The interests of the wholesale tier, by proposing to take retail licensees out of the statute, is NOT to benefit California retailers by keeping them safe from competition from outside of the state. It is aimed at PREVENTING California retailers from servicing customers outside of California unless the transaction is run through the wholesale tier at a significant cost. Their goal is to have this bill emulated throughout the US. If California creates a discriminatory licensing or permit scheme, the wholesalers will use that example as a bludgeon in every other legislature in the US to keep those markets closed to California retailers.
The proposed bill can be found online at: http://www.aroundthecapitol.com/bills/SB_118
There is a link on that page for you to take action and contact legislators about the bill, or you can go directly to: http://www.aroundthecapitol.com/act/billletter.html?bill=sb_118&cmtehouse=A&cmte=GOVERNMENTAL+ORGANIZATION
Most importantly - spread the word about this proposed bill. For a wine lover or wine retailer this is special interest politics at its worst.
I'm sure they are doing it for the children.
Click to be added or removed.Wine ping.
Wine ping. OOPS.
Ping.
Follow the money. This is about taxes and a trade group trying to save their jobs.
IF wine, beer, etc is allowed to come in from other states, it is possible (probable?) that Michigan residents will import their hooch from sources outside of Michigan that won't impose various taxes on the sales. In other words, people like me will order a case of fine wine direct from a winery and will save a bunch due as I cut out the wholeseller (the people who are part of this story), the retailer, and oh yea, the tax man.
The old law made it easy to audit the books for the Michigan wineries. If the sale was made, one assumed it was to a Michigan resident, and therefore, taxes must be paid and Michigan laws followed.
The idea behind it was to encourage free trade amongst the several states without undue restrictions, taxes and tariffs...
Something is wrong here. The Supreme Court can't "give" a trade association the choice to outlaw anything.
S(wine).
This is an interesting picture. Multiple Midwestern states are now bucking SCOTUS in this game playing. They are acting like teacher's unions. These wines suck on a good day. This state MI (among others) is playing protectionist measures for crap product looking for glory. To be sure it is important to support crops. Grow cherries, OK?
But this impetus seems to have the legislature in the sack, else this movement would have died. Beware folks, the leftist, protectionist, socialists, are in your wine glass. And it will have an effect on quality.
Buy Australian wine.
Roo Juice s-cks(with a few notable exceptions). The Argies and Chileans do it better for reds, while the Kiwis make a mean Sav Blanc.
Thanks for the ping. I'm sure it's just a matter of time before the blood-sucking socialists in my state beat this Supreme Court decision back, too.
Is this just one step closer to taxing purchases/sales made on the net?
Why are some states, Wisconsin in particular, so d@mn unfriendly to business? No businesses, no employers, no employers, no employees, no employees, no tax dollars to steal. What is so HARD to figure out about that?
I think it's the 'union' mentality. They go overboard to protect a few jobs and plantation owners (if you will) and meanwhile the quality goes down.
It is not about taxes, IMO for the simple reason they don't sell enough of it. It is akin to the agriculture urinating your tax dollars away to certain 'farmers' to NOT grow crops to keep the price up. In their feeble minds they have convinced themselves that these Midwestern wines are competitive with REAL wine markets, when in fact quality-wise they're not and will never be.
"In their feeble minds they have convinced themselves that these Midwestern wines are competitive with REAL wine markets, when in fact quality-wise they're not and will never be."
So, in their mind, the big winery share of the market is so tenuous that a tiny competetor, who produces a product of lesser quality sends them scrambling and they feel the need to stomp them out? (Pun, intended.) Figures. *Rolleyes*
This is about taxes and screw the small winery (collateral damage). It appears to me, the consumer has no right to purchase for the lowest dollar. That is reserved only for business. The consumer is required to report via use tax all untaxed purchases. Once again it is screw the consumer but business can certainly take the jobs to another state or country because wages are less.
And we call this fair play.
I have no problem with the money trail. I'll gladly pay a tax to import wines. Internet commerce is a path to one of few sanctuaries in this Midwest wasteland. Screw the Commission; fight 'em at the ballot. And screw the couple Michigan wineries that won't be able to compete; it'll inspire them to create an above-average strain. The supreme court was right in their decision; now it's up to the people to fight an antiquated, jouvenile, selfish, prohibition-esque Commission.
It's real simple, pure greed by the distributors. The legislature is in bed with them. They are out to protect their three-tier system so they get a cut from every bottle.
I despise them - and our gutless politicians that fall for their excuses. This is a good example of where term limits have failed. I have no doubt that Jenny Grandstand who already oversees one of the worst state economies will sign the legislation because these companies will dump a lot more into her campaign than the wineries.
That rant over, the distributors do provide a valuable service to restaurants, grocery stores, bars, and so forth. But they don't sell to the consumer - and that's the rub.
The quality of wine produced in non-California states is improving all over the country. Texas wines have come a long way in the last 5 years. Texas wines are winning awards in blind tastings with California and French wines. Check out Flat Creek's Super Texan. McPherson's Sangiovese, Spicewood's Chardonnay, San Martino's Zinfindel, Becker's Viognier, Llano Estacado's Viviano for starters. Cheers!
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