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THE FOURTH TIER
Pending Litigation: Baude v Heath*
by Russ Bridenbaugh
[* David Heath, head of the Alcohol and Tobacco Commission of Indiana]
After the 2006 revision to Indiana's shipping law, (written by the
wholesale lobby), Indiana wineries had to do the following in order
to ship direct to their customers:(heretofore without restriction):
- Accept restrictions on the amount they could ship.
- All customers who wanted wine shipped direct had to physically
come to the winery and show an ID.
- Maintain a raft of new paperwork.
#2 also applied to out-of-state wineries. In other words, you can't
pick up the phone or go online to order - you have to physically go to
the out-of-state winery and identify yourself. If you live in
Indianapolis, this means going 2250 miles to Napa Valley. Restraint
of trade? But the new legislation is even more cynical. In order to
shipto a Hoosier customer, a California winery must first obtain a
farm winery permit (this also allows Indiana wineries to ship direct
with this permit and to forego a wholesaler). However, a holder of a
farm winery permit can only sell from its premises and the California
premises are located in California, so technically, it cannot sell
direct to Hoosiers. Other permits are also impossible to obtain if
you are an out-of-state winery. This is simply an end-run on Granholm
and preserves the pre-Granholm status quo, albeit with more
restrictions on Indiana wineries. Now the law's pra ctical effect
is to bar most out-of-state wineries from shipping to Hoosier
consumers. And the "face-to-face" requirement for establishing your
identity is merely a restraint of free trade, designed to discourage
potential buyers from travellingfrom Indiana to out-of-state
wineries. The whole purpose of the law was to protect the
wholesalers' monopoly, and in so doing, protectthe local alcohol
beverage industry - something Granholm expressly said was
unconstitutional.
Not unexpectedly, the Indiana Wholesalers asked to intervene in the
lawsuit on the side of Mr. Heath. (Afterall, they wrote the law). They
were allowed by Judge John Tinder to do so. Here's what they say in
their brief: "...wineries and WINE CONSUMERS (my emphasis) are engaged
in an effort to pry apart the existing regulatory framework (which is
unconstitutional - RB) governing alcoholic beverages..." They have the
timerity to assert thatIndiana wineries and out-of-state wineries are
treated exactly the same.
They also assert that the 2006 amendments to the Indiana law were
..."cautiously crafted..." Anyone who kept up with the goings on in
the legislature while the bill was being advanced knows that it was
cautiously crafted with a baseball bat. The wholesalers played
hardball and at one point were perfectly content to see all Indiana
wineries go under just so there would be no direct shipping to
consumers.
Of course they also trotted out the tired old "minors buying wine
and having it shipped direct to them" argument which Granholm disposed
of in one paragraph as phony. (Shipping concerns such as FedEx and UPS
have very stringent rules for delivery of alcohol products - it must
be delivered to an adult who must sign for it and it must be the
person whose name is on the address. In other words, your neighbor
(or kid) can't sign your name for it. Some shippers actually ask
for ID, even if it's obvious the person is who they say they are
and are clearly 21.) They make a big deal that everyone who goes
into a package store must present an ID. I haven't been asked for
an ID in 30 years. And no one seems to point out that any minor can
go to a grocery store without presenting any ID to get inside and
then simply shoplift the alcohol. So much for the wholesalers'
concern over minors getting alcoholic beverages.
So, to sum it all up, the Indiana Wholesalers of Wine & Spirits
accuses you, the consumer, of trying to wreck the carefully designed
regulatory system governing alcohol distribution and sales in the
state and of encouraging underaged drinking and a host of other
calamities. And you thought that all you wanted was, as an adult,
to engage in interstate commerce in alcohol beverages. Think again -
and think VinSense.
Russ Bridenbaugh is a wine journalist who wrote a weekly wine
column for 14 years for the Indianapolis Star/News. He presently
is a consultant and writes and publishes The WineView Newsletter.
He lives in Bloomington. Contact him at
wineview@hotmail.com.
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