Small Wineries May Benefit

Every year, tourists pour into the tasting room at Willowcroft Farm Vineyards in Leesburg, sip a glass of the house Riesling, proceed to a cash register and learn that, no, they may not have a case sent to their homes in New York, Michigan, Maryland or other states with restrictive wine shipping laws.

"I have a simple wish," said the vineyard's owner, Lew Parker. "I am not looking to start an Internet business, or market my wine all over the country. I just want to ship to my customers."

Yesterday, the wish was granted. The Supreme Court's decision striking down some states' laws barring interstate shipments of wine will change the economic rules by which small vineyards like Willowcroft have played for decades. Instead of navigating a patchwork of state laws that limit some out-of-state customers to whatever they can carry out the door, wineries may soon be able to ship more liberally around the country -- filling orders by catalogue, phone or the Internet.

The effect on consumers depends on where they live and how state legislatures respond to the Supreme Court ruling. In states like New York that restrict imports from elsewhere in the United States, the ruling may open up a market tilted toward local producers. In Maryland, by contrast, the state's ban on all mail-order wine sales could well be left in place because it treats in- and out-of-state producers the same.

Still, the ruling could bring sweeping changes to the $22 billion U.S. wine industry. Restrictive rules in 23 states -- some aimed at protecting local wineries, some to shelter middlemen, and some to ensure juveniles do not order wine by mail -- require thousands of small, family-owned wineries to either sell in-state or to rely on licensed national distributors.

But while the number of small wineries is growing rapidly -- there are 4,000 in the United States, each typically producing less than 5,000 cases a year -- the number of distributors has decreased through a series of mergers. Small wineries complain that the national distributors are too expensive to work with and ignore small companies in favor of a few big brands.

"Distributors have a monopoly that has cut out access to thousands of wineries," said Patrick Campbell, owner of the Laurel Glen winery in Glen Ellen, Calif., whose distributor, Lauber Imports Ltd., was just bought by the nation's largest wine wholesaler, Southern Wine & Spirits.

As a result, 80 percent of wine sales come from just 100 brands such as E&J Gallo Winery, Robert Mondavi Corp. and Beringer Blass Wine Estates Ltd., according to WineAmerica, an industry trade group.

That could begin to change if states rework their laws to allow interstate shipments, as wine industry executives expect.

Deborah Cahn from Navarro Vineyards in Mendocino County, Calif., is already starting preparations to sell to other states. The vineyard currently sells 90 percent of its wines -- the sweet Gewurztraminer being the most famous -- directly to consumers and thinks the Supreme Court ruling will significantly boost its sales.

The winery does work on a limited basis with distributors but, Cahn said, the family thinks "no one tells your story as well as you do yourself."

The ruling could prove a boon to the budding Washington-area wine industry. Virginia has 97 wineries, up 50 percent from 2000, and their sales top $100 million, according to WineAmerica. Maryland has 19 wineries. Both states stand to gain from the court's ruling, given the number of tourists who come to the region, industry experts said.