Interview with a Michigan Wine Warrior

Joel_1As often happens, private citizens are foreced to come together and pool their resources in order to fight protect their rights, fight more powerful and well-funded entities and create change. This is the story of WINE CAM (Wine Consumers Across Michigan. Wine Cam was created in the wake of the Supreme Court decision determining state discrimination in the direct shipping of wine was unconstitutional. Joel Goldberg is one of the founders of WineCam. He agreed to talk to FERMENTATIONS and answer questions about the organization and the fight against wholesalers and legislators in Michigan who seek to strip from consumers all rights to receive wine shipped directly to them.

What would be the consequences of a ban on all direct shipping in Michigan?

From a consumer perspective, the situation would become just slightly more dismal than it’s been. The prior Michigan law — which the Supreme Court overturned in the Heald case — allowed in-state wineries to direct-ship to customers, while banning shipments from out-of-state wineries. Since Michigan consumers were never able to legally order direct-ship wine from other states, the entire impact of a ban would fall on our purchases from Michigan wineries.

But for these wineries, the results would be devastating. Many Michigan wineries are small, relatively new family businesses that survive close to the margin. With limited commercial distribution, a major portion  of their sales come through their tasting rooms and direct shipments to in-state customers. Winemakers I’ve spoken with put their direct-ship percentages from 10 or 15%, all the way up to 100%. Take those sales away and force them to sell at sharp wholesale discounts through the three-tier system, and many of them could fold almost overnight.

This has an element of tragic irony. Michigan winemakers are just beginning to come into their own, as they discover what our climate and terroir do best. When I moved to Michigan 30 years ago, there wasn’t one Michigan wine I found drinkable — and I wasn’t nearly as picky about the wines I dreank back then, either.

Today I can honestly say that the single best made-in-USA Gewurztraminer and several of the best USA bubblies I’ve tasted proudly proclaim Michigan origins. Riesling also thrives at a number of wineries. The folks in Lansing don’t have a clue what their game-playing and political posturing would do to our burgeoning wine industry.

The big wine and beer wholesalers as well as pro-direct shipping advocates have separate bills awaiting consideration in the Legislature. What steps will the Legislature take in considering these bills and what kind of time table are we looking at?

Crystal ball gazing isn’t my strong suit, but since you asked…

The bills will come up first in the House of Representatives, in front of the Regulatory Reform Committee. Eight of the nine committee members took money from the Wholesalers in last year’s election. The handouts averaged around $4000 apiece, and it was the largest or second-largest campaign contribution for nearly all of them. Draw your own conclusions — but we don’t expect any miracles there.

The State Senate will likely be another another matter, because the Majority Leader has already gone on record favoring "reasonable flexibility" for consumers, and he has the clout to back it up. The primary legislative advocate for direct-ship is also in the Senate; her district includes Leelanau Peninsula wine country.

The timetable is still up in the air. But with the incredibly bad press that the Wholesalers’ bill has been receiving, I’d say they’re in no rush to try to muscle a ban though. We’re probably looking at the fall, and the showdown will likely come in the Senate.

There’s one wild card, though. Now that the Supreme Court has rendered justice in the Heald decision, the case goes back down the judicial food chain to the US District Court judge in Detroit who originally heard it several years back. In theory, he has the power to order a specific remedy — i.e. level up or level down — based on his reading of the Supreme Court decision.

It’s unlikely that he’ll choose to exercise that power; he’ll more likely instruct Michigan to devise its own solution to conform with the Supreme Court ruling. But a judge-ordered solution is at least a remote possibility.

What information do you have on the problem of minors purchasing alcohol via the Internet?

What problem? is there a problem? When was the last time YOU heard about a real-world minor buying wine online, as opposed to beer at the corner store or swiping a bottle of vodka from Dad’s liquor cabinet?

The Detroit Free Press put it well in their editorial slamming the Wholesalers’ proposed shipping ban, "The legislation is being embraced under the guise of ‘protecting the kids.’ More like protecting the trough that regularly wines and dines state lawmakers and occasionally jets them to exotic locales."

The claim about underage buying has been discredited every time someone took a serious look at it. The Federal Trade Commission issued a report blasting it. During the Heald case, the Court of Appeals wouldn’t even let the lawyer for the Wholesalers make the argument, saying they lacked any credible evidence. And the Supreme Court dismissed it completely, Justice Kennedy writing, "The States provide little evidence that purchase of wine over the Internet by minors is a problem…"

It’s been discredited by everyone, that is, except politicians whose real goal is grasping at political cover to hide their real motives. Just a few days ago, Representative Chris Ward, our state’s poster boy for bought-and-paid-for politicos, was at it again, telling the Michigan State News about the 19-year-old who would order "a big shipment of vodka" if his direct-ship wine ban doesn’t pass.

It’s hard to argue with logic like that.

What is WineCam doing to make direct shipping of wine a reality in Michigan?

That needs rephrasing, along the lines of "What is WineCAM ABLE to do…"  The odds we face in Michigan make David versus Goliath look like a pretty even match.

We’re a bunch of consumers who came together as a group about a month ago. Only a couple of us have any experience with politics or government at all, and our bank account has — well, let’s just say it’s not enough to stock anyone’s wine cellar.

The folks we’re up against are the biggest-spending, most savvy special interest group in the state. For perspective, during last year’s election these guys threw more money around Lansing than the United Auto Workers, the Teachers Union, or the Chamber of Commerce. Something like 90% of our current state legislators shared in the jackpot.

And that’s not to mention all the fundraisers they orchestrate for politicos at their headquarters, a block from the State Capitol, or the legislative leaders they jet to their conferences in Grand Cayman, all expenses paid, to participate in a "legislative panel discussion".

But, as they tirelessly point out when such things are mentioned, everything they do is perfectly legal under Michigan law (which raises an entirely different set of issues…)

Anyway, that’s what we’re facing. Now as to what we’re DOING, we’re taking a two-pronged, outside / inside approach.

On the outside, we’re working hard to raise public and media awareness about both the issues and the politics of direct-ship. That means press releases, interviews, appearances at wine events, and maybe even a "media event" or two closer to the final vote.

The distributors’ monopoly is most effective behind closed doors, where their money and favors can prove irresistibly persuasive. So to the extent that we can move the debate out of the Capitol backrooms and into the arena of public scrutiny, the better our chances will be. Neither their arguments nor their conduct is especially appealing when viewed in the daylight.

Some of the Michigan media have picked this up already, and are giving the issue good coverage. Just last week, both the Detroit Free Press and Lansing State Journal published strong pro-shipping editorials. Both papers blasted the Wholesalers and the politicians on their dole. The State Journal even told Chris Ward to give back all the Wholesalers’ contributions if he wants people to actually believe his motives. But we need to keep the issue on the front burner.

The inside part of the strategy is more difficult, because it involves reaching a group of legislators who traditionally go along with whatever the Wholesalers ask.

We’re going to produce a series of objective, accurate fact sheets for the legislators and their aides, and will be setting up a lot of meetings to discuss the issues involved. We want to make sure they know what’s happening in other states, like Texas, Connecticut and New York. We can’t outspend or outmuscle the distribution monopoly, but we’re confident we can out-truth them.

Fortuntely, they may have overplayed their hand. We’ve already heard that some legislators feel they were "misled" about the issues in the shipping debate, and the legislative alternatives. Some of them resent the patently false scare tactics being used about things like underage drinking.

Last but not least, we’re finding hundreds — soon to be thousands — of consumer supporters who are signing on at the WineCAM website and wine events around the state. We’ll be asking these folks to contact their legislators, attend hearings in Lansing, write letters to their local papers, and recruit friends to the cause.

Several legislators told us that the strongest argument they could have to reject the shipping ban is the need to "vote the district" — i.e. lots of their constituents back home are concerned about their vote on this issue. We’re going to engage wine consumers across the state, in every legislative district, to help provide them with that argument — especially as they spend more time in their home districts during the summer.

Is there anything those living outside Michigan can do to help WineCam in their efforts and help Direct Shipping legislation pass?

Does the phrase "please send money" come off as too crass?

Seriously, our most pressing need is for the bucks to convey our message. Right now, our work is being done by a group of volunteers, all of whom have day jobs. We urgently need to hire a Lansing lobbyist who can help to open some of the doors there and work with us on organization and strategy. We need to produce the informational packets for the legislators and their aides, and that should involve some PR folks. And it would be nice to be able to hand out a professionally-designed brochure at wine events, in place of the home-brewed (or is that home-vinified?) version we’re currently using. We’re not ashamed to accept contributions from outside the state — more information is on the donation page at the WineCAM website.

Folks from elsewhere can do one other thing. Californians may not realize that Michigan is still in the midst of a major economic slump. Our legislators confront a mammoth budget deficit, cuts in education funding, and coping with the highest unemployment rate in the nation.

This may shock you and me, but in light of those other issues, studying the intricacies of the wine shipping debate doesn’t rank all that highly on most legislators’ priority lists.

And unfortunately, nearly all the "information" they received until now came from the other side of the debate. For example, most legislators start with no idea that twenty-some states already allow direct-ship. Or that the national trend is heading entirely in that direction, rather than the direction our state’s Wholesalers are trying to lead them.

So another important thing that people elsewhere can do is help to turn a national spotlight on Michigan’s conduct on the shipping issue, as one of the two states involved in the Supreme Court case.

Michigan legislators have spent so many years at the Wholesalers’ trough that they need a reality check to realize that their behavior might seem backward-looking — or out-of-step, or just plain ridiculous — to much of the country. If the name "Chris Ward" became the punchline for a couple of Jon Stewart jokes, that could change a dozen votes overnight. These things DO matter in a state that prefers to fancy itself as trying to break free of its rust-belt image and mindset of the last century.

But Michigan consumers and Michigan winemakers need to carry the fight. Out-of-state support could be a double-edged sword California’s wine industry, which has an obvious stake in our opening to direct-ship, appeared to be orchestrating anything behind-the-scenes.  But we welcome the support — moral, financial and logistical — of allies everywhere, along with whatever publicity they can draw to our legislative battle.

What about the just-introduced bill to allow limited direct shipping?

It’s a major step in the right direction compared with the "Let’s Kill Them All" approach of the Wholesalers’ / Chris Ward bill. But from a consumer point of view, there are some serious flaws that reflect the lack of consumer input in its drafting.

To cite one example, the bill would prohibit the thousands of Michigan residents who annually visit wine country in other states from sending their own wine purchases home to themselves! So if I spent a couple of days in Dry Creek and put together two or three mixed cases, there would be no legal way to get them back to Michigan. That’s both petty and strongly anti-consumer, and getting it right would involve no significant loss to our state.

Because of provisions like this, I can’t support the limited shipping bill in its current form, even though it’s clearly preferable to a total ban. But with some tweaking, it could become a law with which Michigan wine consumers could live happily.

What else is on the WineCAM agenda?

Right now, we need to focus all our energy on direct-ship. As a group, we’ve been so busy playing catch-up that we’ve never even talked about "What comes next?"

But there’s an ongoing need for a voice to speak unabashedly on behalf of wine consumers in Michigan, and perhaps elsewhere. In the past, when issues with a major impact on consumer rights got decided, the only folks in the room were government officials and those "in the biz". That’s a mistake.

I’d like to see WineCAM become an advocate for a range of consumer-oriented improvements in Michigan beverage regulations. For example, why shouldn’t the Governor appoint at least one or two members of our Liquor Control Commission specifically to represent the interests of the consumer? Compared to many states, we have quite backward-looking regulations in areas like restaurant BYO and in-store tastings. These could stand re-examining.

Who knows — in some future debate, we might even find ourselves on the same side of the street as the Wholesalers.

Joel Goldberg was born in Connecticut and moved to Michigan after college. He started his own non-wine-related Michigan retail business business ni 1985, yet always had an strong interest in wine. Joel was an early adopter of Internet wine resources using the Prodigy wine board to talk wine with others then migrating to the Compuserve wine discussion board and later to Robin Garr’s Wine Lovers’ Discussion Group. Joel co-founded MoCool (the Motown Co-operative Off-Line) for on-line wine fans in 1992. Its annual tasting weekends continue today as the world’s longest-running gathering of its type.
He is Involved in various Michigan wine and tasting events, including Ann Arbor’s WineFest charity auction.

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