Supreme Court allows direct buying wine from out-of-state vineyards

Supreme Court allows direct buying wine from out-of-state vineyards    The U.S. Supreme Court, in a 5-4 decision Monday, said wine may be bought directly from out-of-state vineyards, striking down laws in New York and Michigan that protected local wineries.
   'States have broad power to regulate liquor,' said Justice Anthony Kennedy, writing for the high court's majority. 'This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing shipment by in-state producers.'
   Kennedy added, 'if a state chooses to allow direct shipments of wine, it must do so on even-handed terms.' His opinion was joined by Justices Ruth Bader Ginsburg, Stephen G. Brayer, David H. Souter, and Antonin Scalia.
   Although the U.S. wine industry does an estimated $21.6 billion in annual sales, smaller wineries say they can't compete with larger vineyards unless they can sell directly to customers over the Internet or allow visitors to their premises to ship bottles home.
   Since Prohibition ended in 1933, almost half the U.S. states have passed laws requiring outside wineries to sell their products through licensed wholesalers within a state, allowing that state to collect taxes on alcohol.
   However, the Constitution also prohibits states from discriminating against out-of-state businesses.
   In a dissent, Justice Clarence Thomas said the 21st Amendment to the Constitution, which ended Prohibition, gave states the clear authority to regulate alcohol as they see fit. The high court's majority ruling 'does this nation no service by ignoring the textual commands of the Constitution and acts of Congress' by needlessly overturning long-prevailing regulations, Thomas asserted. Also dissenting were Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor and John Paul Stevens.
   The ruling is likely to be extended, as a matter of practicality, to beer and other alcoholic beverages.
   The 24 states that had banned direct shipments from out-of-state wineries are Alabama, Arizona, Arkansas, Connecticut, Delaware, Florida, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Ohio, Oklahoma, Pennsylvania, New Jersey, New York, South Dakota, Tennessee, Utah and Vermont.
   The cases on which the Supreme Court ruled are Granholm v. Heald [docket no. 03-1116], Michigan Beer & Wine Wholesalers Association v. Heald [03-1120], and Swedenburg v. Kelly [03-1274].
   For more information, see July 2004 American Shipper, pages 36-39.