by Lindsey A. Zahn on October 26, 2010
by Lindsey A. Zahn on October 25, 2010
Governor Bob McDonnell of Virginia recently signed a wine bill into law. The new law, which is said to promote Virginia’s wine industry, will work to more than double the size of the state’s wine industry. Prior to the signing of this bill into law, Virginia’s wine industry had received 33% of all tax revenue from the wine liter tax placed on Virginia wines. The new law allows Virginia wineries to receive 100% of all tax revenues from the wine liter tax.
Additionally, a proposed budgeting system adapted by the law will allow for more funding to support research, viticulture education and technology, and promotion. The wine industry is said to receive a total of $1.3 million in the next fiscal year, which is a big improvement from the $580,000 it received last fiscal year. Governor McDonnell stated that the legislation seeks to put more money into marketing and tourism to promote the Virginia wine industry and inform individuals of Virginia’s wines.
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by Lindsey A. Zahn on October 22, 2010
An interesting tidbit emerges today in the world of wine, law, and news: a brochure posted for an Illinois wine-tasting festival seemed to be ambiguous and could be interpreted to allow an indefinite amount of wine consumption by tasters. Last month, the city of Geneva hosted a wine-tasting festival called the Festival of Vine where attendees were allowed to consume wine at several wine-tasting events. The brochure for the event, however, apparently failed to include a statement disclosing the liquor limit and could thus be interpreted to allow an unlimited amount of wine to be consumed by patrons of the events over a specific period of time.
Although officials indicate that “no citations or warnings for liquor code violations were issued during” the Festival of Vine, a seminar will be held next week for festival merchants to better understand the ordinance on wine consumption during wine-tasting festivals. Additionally, officials state that whereas the ordinance has been in practice for an extended period of time, misunderstandings occasionally arise with respect to the application requirements. Accordingly, misinterpretations arise as to “where the tasting can be held, barricades and liquor serving training.” Officials state they are more concerned about making sure businesses with liquor licenses are in compliance than they are about issuing violations of the ordinance.
This legal misinterpretation and the ramifications that arise therefore are interesting in light of the a recent On Reserve post discussing Iowa’s new shipment law. (See New Iowa Law is Problematic for Wine Businesses.) Whereas the two states have respectively different legislation, it is curious to consider that laws created and enacted by the state can contain such vague text so as to create misinterpretations or unfavorable corollaries with regard to executing business transactions. Whereas Iowa proposes to amend its current direct shipment legislation that has given rise to difficulties for businesses throughout the state, it is interesting to see that Illinois maintains a solution through hosting seminars for businesses governed by the ordinance. However, perhaps it should also be considered that the Iowa and Illinois legislation at hand administer considerably distinct transactions that simply materialize from the same industry.
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wine-tasting festivals
by Lindsey A. Zahn on October 19, 2010
Iowa’s new direct shipment law, which was designed to help the State gross revenue with respect to wine imports, has served as a hindrance to many local Iowa wine businesses. The law, which was approved and instated in July of 2010, changed the State from a reciprocal shipment state to a permit state and requires out-of-state wine manufacturers and producers shipping to the State to obtain an Iowa state license and pay state taxes on their wine products. The current dilemma entails the actual law, the text of which the Alcoholic Beverages Division indicates neglects Iowa cellar and wine retailers, who can no longer legally deliver wine to customer homes. Presently, only wine manufacturers can legally deliver wine to residences.
Although the text of Iowa’s new direct shipment law seems to be an unintentional consequence of poor drafting, changing it will require legislative action. Many Iowa businesses that deal with shipment of wine products, such as those who deliver holiday gift baskets, are concerned about the impact this law will have on their holiday deliveries.
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by Lindsey A. Zahn on October 18, 2010
An article written by Eric Asimov was just posted in the New York Times discussing the proposed bill, H.R. 5034 or the Comprehensive Alcohol Regulatory Effectiveness Act of 2010, that aims to limit interstate shipment of wine. For wine enthusiasts and supporters of free trade, the post in the Times means an increasing awareness about this bill among a very broad class of readers.
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by Lindsey A. Zahn on October 16, 2010
You can now receive On Reserve: A Wine Law Blog updates through e-mail by adding your e-mail address to our subscription database on the right-hand side of our homepage.
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by Lindsey A. Zahn on October 11, 2010
On July 1, 2007, a bill called HB 0429 became law in the state of Illinois and amended the Liquor Control Act of 1934. (See Illinois Liquor Control Act of 1934.) Prior to the enforcement of HB 0429, Illinois constituents could have wine shipped to them from wineries or retailers that were located out-of-state as long as those states reciprocated shipment and allowed Illinois wineries to directly ship to the consumers in those states. This allowed for Illinois to receive wine from a total of about 20 different states within the United States. However, the passing of HB 0429 removed the wine shipping privilege Illinois residents had maintained for 15 years and invalidated the direct shipment of wine to consumers from out-of-state retailers. HB 0429 does not quash direct shipment of wine to consumers from either in-state or out-of-state wineries; the new law simply invalidated the shipment of wine directly to consumers from out-of-state wine retailers while still allowing direct shipment to consumers from in-state wine retailers.
As a result of passing this bill into law, Illinois residents became severely limited as per the amount and variety of wine to which they had access. Although residents can still order wines directly from out-of-state wineries in reciprocal states (those states that allow Illinois wineries to directly ship wines to the consumers of those states), residents cannot have wine shipped to them from out-of-state retailers or distributors. Presently, residents of the state can order wine from Illinois retailers and distributors, but the selection is severely slim in comparison to the extent of which constituents once had access. Additionally, consumers in Illinois can no longer search and purchase from the online database of out-of-state distributors as a result of this enactment.
Emerging Waves: The Materialization of HB 2462
A bill titled HB 2462 was recently introduced to the legislature of Illinois by Representative Julie Hamos (Evanston). The bill essentially aims to allow consumers to have wine directly shipped to them from out-of-state retailers and distributors, effectively reinstating the environment pre-passage of HB 0429. Additionally, HB 2462 seeks to achieve the following:
1. Create a permit that out-of-state retailers may obtain allowing them to ship you the wines you order over the telephone, over the Internet or after visiting their stores.
2. Provide enhanced tax revenue to the state of Illinois when out-of-state retailers remit taxes on the wines they ship into the state.
3. Assure that all out-of-state wine stores that obtain a permit fall under the legal and regulatory jurisdiction of the State of Illinois.
4. Protect against minors obtaining alcohol via direct shipment by assuring that signatures are obtained by an adult prior to delivery.
5. Give back to Illinois consumers the legal access to all wines available in the United States that was taken from them in 2007.
Post Granholm: The Effects on Distributors and Retailers in the Wine Industry
Whereas many opponents of HB 0429 argue the Illinois law is unconstitutional under Granholm v. Heald, it is important to note that the Supreme Court’s ruling in Granholm did not explicitly discuss the ruling’s impact on or coverage with respect retailers and distributors of the wine industry. Granholm did hold that it is unconstitutional for a state to discriminate against the shipment of wine to consumers with respect to in-state and out-of-state wine producers; in other words, if a state allows direct shipment of wine to consumers by in-state wineries, the same must be done for out-of-state wineries. The Court’s holding and dicta within can be inferred to apply to distributors and retailers within the wine industry, and several federal courts have affirmed such, however, the Supreme Court has never unequivocally contested that the same treatment does in fact apply to distributors and retailers within the wine industry. Therefore, it is possible — although not necessarily probable — that a future Supreme Court decision may rule that states can discriminate with respect to out-of-state distributors and/or retailers in wine shipments. However, given the context of Granholm and the extent of the interstate commerce clause, it is unlikely the Supreme Court would affirm such discrimination as constitutional. For more information, please see previous On Reserve entry titled The Alcoholic Beverage Legal Environment Post-Granholm.
The full text of HB 0429 can be accessed at Public Act 095-0634 and more information with respect to the House Bill can be found at Illinois General Assembly — Bill Status for HB0429. The full text of HB 2462 can be accessed at HB 2462 and more information with respect to this House Bill can be found at Illinois General Assembly — Bill Status for HB 2462. Additional information on the Illinois Wine Consumer Coalition and information on how to become involved with the state’s initiative can be accessed at Illinois Wine Consumer Coalition.
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