A BIG wine for the Good Wine Guys

In a number of states wine wholesalers have attacked direct shipment of wine to consumers by advocating that all direct sales should occur only after a person actually visits the winery in person.

On it’s face this requirement, adopted most notably in Kentucky and Indiana, appears not to discriminate against any wineries. After all, whether th winery resides in state or out of state, the purchaser must go there first.

Of course this is balderdash. A person living in Kentucky who wants to have wine shipped directly to them find it much easier to head to a Kentucky winery than to a CA winery, as the law states must occur first.

Well, this kind of onerous provision, the kind wine wholesalers like so much, was challenged in the Sixth District Court. Kentucky’s law that demands in-person purchasing before shipment can occur was one of the targets of the lawsuit.

Guess what? The judge in the case said that such laws are unconstitutional because they discriminate against out of state wineries.

The judge wrote in his opinion: "It is clear that the in-person requirement amounts to “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.”

This is pretty significant stuff, assuming the ruling survives challenge. The wholesalers’ brilliant idea that they could stop CA, WA and OR wineries in particular from shipping directly to KY residents with the seemingly fair rule that customers must first visit the winery, whether it resides in KY or outside of KY, was found to be not so brilliant.

In essence, the ruling takes off the table one more tool the monopolistic wholesalers thought they had in their arsenal for keeping the market all to themselves.

You can read the ruling HERE at the WineAmerica web site under the heading "Kentucky Court Order Favors Wineries’ Right to Ship". It’s not so complicated as many judicial opinions can be. The opinion by Justice Charles Simpson is straightforward and compelling

2 Responses

  1. tom merle - August 27, 2006

    Thanks for the tip, Tom, for accessing the full judicial ruling. I picked up a terrific term: that the current discriminatory structure is “infirm” under Granholm.
    The opinion removed my too easy belief that required visits to wineries whether on the coast or KY (or IN or AZ) was based on parity. The plaintiffs ripped this logic apart, as you nicely summarized, and the court concurred adding its own supporting commentary.
    This, I now believe will prove to be a landmark case, irrespective of what the KY legislators do next year. I recommend all your readers surf over to WineAmerica.com and read it for themselves.
    Napa Tom

  2. tom - August 27, 2006

    My hope is that this ruling is appealed by the defendents so that we might get further and even more authoritative confirmation of the strength of the plaintifs arguments.

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