Michigan wine drinkers no longer would be able to receive shipments directly from vendors under a bill introduced and quickly approved by a House committee Thursday.
The measure is the latest twist in a lengthy battle over Michigan's wine distribution system, which led to a U.S. Supreme Court ruling in 2005, only to inspire yet another federal lawsuit.
The dispute centers on whether Michigan -- or any state -- can give preferential treatment to its wine vendors at the expense of those from other states. Also at issue is the role of wine wholesalers, who act as a middleman between vendors and consumers.
A federal judge in September ruled unconstitutional a state law allowing Michigan retailers to deliver wine to residents, but prohibiting out-of-state retailers from doing likewise. The bill would halt the discrimination by barring all retailers from making the deliveries or shipments.
"If this isn't done, we're going to have God knows how many hundreds of thousands of out-of-state retailers making these shipments," said Ken Wozniak, director of executive services for the Michigan Liquor Control Commission, which supports the bill. "The situation would be totally out of hand in terms of effective regulation, tax collection and accountability."
Tom Wark, executive director of the Specialty Wine Retailers Association, said the bill would limit Michigan wine lovers' choices and damage in-state vendors that deliver wine to customers' homes or catered social events. Its actual purpose is to protect wholesalers, who contribute generously to lawmakers' campaigns, he said.
"This is the sort of shameful, pay-to-play politics that creates the extraordinary cynicism Americans have toward the political process," said Wark, whose group is based in Sacramento, Calif.
He accused sponsors of trying to slip the bill quietly to enactment without giving consumers or retailers a fair chance to fight it.
The bill cleared the House Regulatory Reform Committee unanimously but will not reach the floor before next month, said a spokeswoman for Rep. Barbara Farrah, a Southgate Democrat who chairs the panel and sponsored the measure. Farrah declined comment, referring a reporter to Wozniak.
The measure would establish a different policy for retailers than for wineries, which can make direct shipments regardless of where they are based.
That wasn't always the case. Michigan and New York previously allowed their wineries to ship directly to in-state consumers but barred shipments from out-of-state wineries. The U.S. Supreme Court struck down those laws in 2005.
There's a good reason to treat wineries and retailers differently, Wozniak said. Direct sales to consumers account for the majority of many small wineries' business. And there are far fewer wineries than retailers.
Also, the state's ban on out-of-state shipments covers beer and liquor, not just wine. Reversing that policy and allowing direct sales of those beverages would reduce revenue not just for wholesalers, but also for the state itself, Wozniak said. The Liquor Control Commission acts as a wholesaler for distribution of spirits.
The Michigan Beer and Wine Wholesalers Association spoke in favor of the bill before the House committee, said Mike Lashbrook, its president.
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