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June 19, 2005Legislators prepare new wine-shipping proposalsByRecord-Eagle business editor TRAVERSE CITY -- Longtime wine maker Larry Mawby is typically busy in his Bingham Township vineyard and tasting room this time of year -- but the past week's been packed with phone calls and meetings. Mawby and other northern Michigan vintners are gearing up for both their busy summer seasons and a brewing legislative battle in Lansing over direct wine shipments, which soon could be banned under proposals unveiled last week. "Having the ability to ship wine to my customers is critically important," Mawby said. The U.S. Supreme Court last month struck down laws in Michigan and New York that prohibited wineries in other states from making direct sales to customers in Michigan. The court said the laws were unconstitutional because they allowed in-state shipping while barring mail order and Internet sales of out-of-state wine. The case was sent back to the appellate court for more review. But state lawmakers are readying their own remedies, ranging from a total ban on all direct shipping to allowing limited shipping by wineries both in and outside Michigan. Wine makers like Don Coe, managing partner of Black Star Farms near Suttons Bay, term it a "life or death" issue for small northern Michigan wineries. Coe, who also heads the WineMichigan trade association, says Black Star Farms near Suttons Bay direct ships up to 800 cases of wine a year, about 8 percent of its total production of around 10,000 cases per year. "You take away that eight percent and that's the difference between profit and loss for our winery," he said. Smaller wineries producing 5,000 cases or less annually can ship out as much as 25-30 percent of their total production, he said. "That's the difference as far as staying in business for some small wineries," he said. State Sen. Michelle McManus, R-Lake Leelanau, is preparing legislation that she refers to as a "fair compromise" to allow limited direct wine shipments with controls to keep it away from underage buyers. "I think a total ban goes way too far," McManus said. "There are a lot of good reasons to seek out something with some fairness for limited direct shipping." State Rep. Howard Walker, R-Traverse City, also supports limited direct shipping but said the wine industry faces an uphill fight in the Legislature. At least 60 House members -- more than half the chamber -- are expected to co-sponsor a bill backed by beer and wine wholesalers banning all direct shipments. The legislation was crafted by House floor leader Chris Ward, a Brighton Republican. "That's probably going to make it to the (House) floor fairly easily," Walker said. "I think the wholesalers' initiative has a lot of support down here." A group called the Coalition for a Safe and Responsible Michigan, a collection of traffic and safety organizations also funded in part by the powerful Michigan Beer and Wine Wholesalers Association, wants lawmakers to ban mail-order and Internet alcohol sales. A recent survey commissioned by the group -- paid for by the Michigan Beer and Wine Wholesalers Association -- showed 80 percent of Michigan residents opposed alcohol sales through the mail or online, with two-thirds saying they're concerned about the potential for sales to minors. But both Walker and McManus called the underage drinking issue a "red herring" in the debate. "We are very concerned about (underage drinking)," McManus said. "But (minors) are not going to buy a $20 bottle of wine over the Internet." A spokeswoman for Gov. Jennifer Granholm said her office is waiting to see what legislation unfolds but she expects the governor will endorse a limited amount of direct shipping. "The governor believes you can achieve a balance," spokeswoman Elizabeth Boyd said. Walker said the governor's position could be a key to finding common ground between the wine industry and the wholesalers. "(Granholm's) leadership on this issue, I believe, can bring all the parties to the table," Walker said. State Sen. Jason Allen, a Traverse City Republican, said it's a "highly charged" issue with many lawmakers that may make it difficult to find a compromise position. But he's hopeful the Legislature will stop short of total ban on all wine shipping. "The best answer is somewhere in between," Allen said.
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