Under Cover of Darkness

Yesterday a law went into effect in the state of Ohio that is not only begging to be overturned but is exactly as Jim Gorden describes it:

"To me it just sounds like pure political muscle. People in the wine
business in Ohio have restricted the free market, have limited Ohio
consumers’ access to wonderful wines from out of state, and have, as I
see it, legislated themselves more profits."

The new law only allows wineries making less than 60,000 cases per year to ship into Ohio. This kind of nonsensical cap is being challenged in other states. But there is a basic principle in place that helps determine if this kind of restriction is actually constitutional: The state needs to show that it is necessary to promote temperance, an orderly market or collection of taxes.

It turns out that this question is very neatly answered:

"At the time, we knew we were banning the sales
beyond that gallon limit anywhere in the state of Ohio, but
for me it was an economic-development issue dealing with the
overall interest of promoting Ohio wineries."

Whoops! This from an Ohio legislator Tim Grendell who supported the law. Grendell goes on to admit that his concern was "that the national
wineries and national wholesalers could flood the market and
cause severe harm to the Ohio winery industry."

What we have here is evidence that the law was passed not to support temperance, an orderly market or tax collection. Rather, Mr. Grendell describes a law based purely on protectionism.  Keep in mind, that’s how the law is justified. If this were really the case you might even be able to sympathize since the goal of supporting an Ohio wine industry that is growing is a good thing.

But that’s not the real reason. This law was supported strongly by the Ohio alcohol wholesalers who since 2000 have given more than $1.8 million in campaign contributions to Ohio legislators.

Bottom line is that this really ugly new regulation was put in place as a wholesaler protection act. Again, to quote Jim Gordan: 

"My guess is that the Ohio distributors realized that they couldn’t
keep all of their old monopoly, so they decided to keep as much of it
as they could. By setting the bar at 63,000 cases, probably all of
Ohio’s own wineries are OK to ship direct, because they’re mostly
medium sized or small. That made it easier for the legislators with
Ohio wineries in their districts to support it.

Since distributors carry mostly the products of large wineries it
made sense to them, I assume, to focus on protecting their sales of the
biggest brands they carry"

But what is really nasty about this legislation is how it got passed. No hearings. No public discussion. The changes to Ohio law were slipped into the state’s Budget bill at the last moment and nothing about it was said.

What follows is perhaps the most interesting commentary on unethical behavior I think I’ve read all year.
A story in the Cleveland Plains Dealer discussing the process by which this legislation was slipped in without debate and under the cover of darkness, describes the attitude of one Jeff Jacobson, a Dayton area Republican largely responsible for doing the sneaking:

"Despite the lack of public debate, Jacobson said he felt
the matter was thoroughly hashed out behind closed doors"

Isn’t that precious!!

Jacobson is further quoted as saying, "It would be impossible
for every issue in every budget bill to be one that people
spend hours and hours talking in a public meeting

Fair enough…but how about at least one minute or a half hour or maybe just one hour discussing a change in the law that will strip consumers of their rights, result in unconstitutional lawmaking, and appear to be largely payoff to wholesalers who pay by millions?


7 Responses

  1. Blackbird - October 3, 2007

    For the good of the ongoing debate, what is your estimate of the percentage of American wineries that make more than 60,000 cases of vino per year. 1 %, 2%, 3%…
    Still, the bigger producers craft limited release wines for their clubs and tasting rooms. This undoubtedly helps grow the brand that indirectly aids the distributors.
    By the way, the wine industry blew it when they were focusing on the limit in Florida and allowed AZ to pass a limit of 13,000 cases. Glad I don’t live in Phoenix.
    And then there is the irony that the ~Coalition for Free Trade~, which masterminded and coordinated the strategy to go the Supreme Court, was launched and shaped by the retailers who got left out in cold, as you’ve been remonstrating these past months… Not being able to put together shipments of various wines from different producers and regions is the most egregious frustration faced by the consumer.

  2. AC - October 4, 2007

    you mean like our pols discussed WMD and then went ahead and did whatever they wanted to anyway? even though they had information to the contrary? and now a war that has lasted longer than WWII and costing, so far,half a trillion dollars?

  3. MJ - October 4, 2007

    If you are from Ohio or just someone concerned with this type of anti-consumerism legislation and want to make your voice heard to two of the prominent parties in this legislation, just send them an email and let them know how you feel. Make your voice heard as a wine consumer. I no longer live in Ohio, but chided these lawmakers for their part in this embarassing saga. Everyone who cares should do the same.
    Senator Jeff Jacobson – [email protected]
    Senator Matthew Dolan. – [email protected]
    A great updated posting is available on Uncorked, Mark Fisher’s Dayton OH blog at:

  4. Jeff Carroll - October 4, 2007

    Tom, great post. It seems like the Ohio budget bill slipped through without much notice at all. It’s worth noting that similar maneuvering is going on in Wisconsin as we speak. This time, people are much more aware and it will be tough to sneak bad wine shipping legislation into the budget bill.

  5. Dee Dee - October 4, 2007

    Wine lovers of Ohio should immediately bombard their state representatives with emails or phone calls. These draconian laws are outrageous!

  6. AC - October 6, 2007

    and while you’re at it-bombard your National leaders too.Let’s end this war!

  7. Fernvalley - October 15, 2007

    In TN this would be a violation of the SunShine law. Hmmm but of course in the state of TN it is a feloney to bring in wine that does not line the pockets of the distributers.

Leave a Reply