Getting Bent Over In Illinois

I’m a big fan of press releases in today’s day and age. They allow us to get out information to a larger number of people than in the past, they can be formatted, sent and posted so that those who want the information are the ones to get it. And it allows me to get out this kind of information:

"According to "FollowTheMoney.Org", which tracks state campaign
contributions, the lead sponsor of HB 429, Representative Edward
Acevedo, has received $32,000 from alcohol wholesalers since 2000,
including $10,000 since the legislation was introduced last year. One
Senate sponsor of HB 429, James Clayborne, Jr., has received $85,000
from alcohol wholesaler interests since 2000, including $15,000 since
the legislation was introduced. Since 2002, Governor Rod Blagojevich,
who signed HB 429, has received more than $500,000 just from alcohol
wholesalers in Illinois, $50,000 of which was given to him since he
signed the bill into law."

HB 429 is the Illinois bill that was passed late last year, goes into effect on June 1 and that stripped Illinoisans of their right to have wine shipped to them from Internet wine stores.

The whole story is here.

Although the bill was written by wine wholesalers who really don’t like it when any transaction involving wine doesn’t provide them with their cut, and although it was introduced by those to whom the wholesalers contributed lots of money, the bill actually had fairly widespread support.

Among those supporting stripping consumers of the right they had for 15 years were:

-Associated Beer Distributors of Illinois
-California Wine Institute
-Wine & Spirit Distributors of Illinois
-Free the Grapes
-Beverage Retailers Alliance of Illinois
-Illinois Grape Growers and Vintners Association

Those who thought the bill unworthy of passage and that a better bill could have been crafted included:
-Specialty Wine Retailers Association
-Illinois Winemakers Alliance

There is a really interesting set of stories that come out of this situation that have to do with consumer rights, pay-to-play politics, relations between wine industry associations, constitutional issues, how best to fight for consumer rights, the cost of justice, etc. All these issues lend themselves to the press release format and, when packaged just right, to media coverage. An enterprising reporter can find in all this a really juicy, compelling, sensational story. And I have such a reporter is looking up this story as we type.

In any case, the real bottom line here is that Illinois consumers just got bent over by a surprising coalition.

15 Responses

  1. Nancy - May 22, 2008

    As an Illinoisan and a wine newbie, I thank you for this post. I knew about the law but somehow I thought there was a provision that allowed wine shipments to us, provided that the home state of any winery/retailer in question also permitted Illinois shipments in to them (if I make myself clear).
    Will a reporter take up this story and run with it? Will there be outrage anywhere in the state except possibly the wealthy northern Chicago suburbs? Or are there just not enough wine drinkers to care?
    Or — if the ban only applies to Internet wine sales, as you seem to suggest — will Internet retailers simply find a way technically to have some sort of physical shop, and thus become an ordinary retailer, too?

  2. Tom Wark - May 22, 2008

    If they are not a producer of wine and if they do not reside in Illinois, then the law prohibits them from shipping into your state.

  3. Peggy - May 23, 2008

    I’m not sure why Free The Grapes is in the supporter column.

  4. Dan Cochran - May 23, 2008

    I’m with Peggy – rather shocked to see Free The Grapes supporting such legislation!

  5. TheRP - May 23, 2008

    I’m no spokesman for Free the Grapes but it seems as though they supported the bill because it allowed direct shipment from wineries in all 50 states. They proposed an amendment that would also allow out of state retailers to ship in but it was shot down.
    Here’s a summary of a Free the Grapes press release:
    Illinois Governor Rod Blagojevich yesterday signed House Bill 429 which goes into effect June 1, 2008. The new law dramatically expands consumer choice for winery-to-consumer purchases made by Illinois wine consumers. Under the new law, wineries in all 50 states may purchase a permit to ship. Under the old law, wineries in just five states, including Illinois, were allowed to direct ship to Illinois consumers. The trading network of states with so-called ‘reciprocal’ wine shipping arrangements has decreased from a dozen to just five: New Mexico, Wisconsin, Iowa, Oregon (changes to permit law in January 2008) and Illinois (changes to permit law in June 2008).
    “The new law is a boon for winery-to-consumer shipments, and long overdue, but unfortunately it corks out-of-state retailers. An amendment, widely supported by Illinois consumers and Free the Grapes! would have allowed out-of-state retailers the same privileges as wineries. It was defeated by powerful Illinois retailers and wholesalers,” said Jeremy Benson, executive director, Free the Grapes!, a winery-consumer grassroots coalition.
    and a link to the full press release…

  6. Tom Wark - May 23, 2008

    The RP,
    The amendment was authored by Specialty Wine Retailers Association. Also, out of state wineries, like out of state retailers, were able to ship into Illinois before this legislation. Opposing the legislation on the absolutely correct grounds that it was bad for consumers would have led to further negotiations and likely a better situation for consumers…namely the ability to buy the wines they want. We are all still waiting for Free the Grapes to make a renewed effort in Illinois to help consumers who got screwed by the legislation they supported.

  7. TheRP - May 23, 2008

    I must have misunderstood the prior situation (or Free the Grapes did). My post was completely based on what I read from them which stated “Under the old law, wineries in just five states, including Illinois, were allowed to direct ship to Illinois consumers.”
    There seems to be two main issues at hand heere. Direct shipping from out of state wineries and out of state retailers having the ability to ship to customers in Illinois.
    Maybe you could clear this up for me as I’m really interested in why these groups would back such legislation (unless they were duped).
    How many states had the ability to direct ship wine from the winery and from a retailer prior to this legislation, all 50 in both cases? If that is true, I see no sense in Free the Grapes supporting it.

  8. Christina - May 28, 2008

    As a member of the Illinois Winemakers’ Alliance I thank you for this post! Because the IGGVA supports the bill and the IWA wants a change the consumer seems to be confused. I’ve heard that many legislators were confused as well.

  9. Philip James - May 28, 2008

    Tom – can in state retailers still ship, or has they been revoked too? Your post wasnt clear.

  10. Tom Wark - May 28, 2008

    Yes, instate retailers may still ship within Illinois, making the law unconstitutional.

  11. Roger - May 29, 2008

    Are retailers located in IL, still allowed to ship to out of state customers? If so, they got their cake and get to eat it too. The only recourse I have as consumer if the law can’t be changed to allow shipments from non-wine producing operations located outside of IL, is to stop shopping at the retail wine stores and simply order wine directly from the wineries. That will completely cut out the wholesalers as well as the retailers. Plus, the State of Illinois and the various governmental entities who levy “sin taxes” miss out on the tax revenue.

  12. dhonig - May 29, 2008

    The Seventh Circuit Court of Appeals, the federal appeals court for Illinois (and Indiana and Wisconsin) is presently sitting on the Indiana wine shipping case. They heard oral arguments a couple months ago. It was a pretty ugly spectacle, but you can’t tell if they were really negative about the wine community’s position, or if it was just Judge Posner having a good time torturing lawyers (he does that). Any evaluation of legal remedies in this matter should probably be put on hold until the Court rules, as whatever they do will give you the blueprint for how to proceed.
    Tom, in real life I do this sort of thing for a living, so if I can offer any advice or assistance, just let me know. I am based in Indiana, but practice in (and am licensed in) Illinois as well.

  13. Kelli Frazier - June 2, 2008

    I am an Independent Wine Consultant for The Traveling Vineyard (an in-home wine tasting network based out of MA).
    I have just learned of this new law and am trying to wrap my head around this as much as I can so I can. I would like to be able to explain this change to my customers who have been enjoying purchasing through me w/o tax. Did I see on this page that we had been without this tax for the past 15 years? This is an email I received from the Industry Education Manager from the Illinois Liquor Control Cmmission when I asked why the law had changed:
    “Actually, the law was created so Illinois could conform to a U.S. Supreme Court ruling back in 2005. Many states decided to block direct shipments of wine altogether, but Illinois was one of a majority of states that ultimately decided to become a “permit” state and allow this practice.”

  14. Ryan - June 3, 2008

    Roger, what’s the name and/or case number of that Seventh Circuit case?

  15. davein2304 - August 18, 2008

    I am always interested in new press released topics.As they always wish to provide every information which is happening around the world.They try to show the facts which are happening around us in day to day life
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