Wine Decision's Aftertaste

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By Robert MacMillan Staff Writer
Thursday, June 2, 2005; 9:20 AM

The U.S. Supreme Court's decision last month in favor of interstate wine shipments is enjoying a nice, long finish as newspapers across the country dissect it for how it will affect local readers.

The story once was mise en bouteille almost exclusively by the technology press, especially when dot-com entrepreneurs were making millions of dollars every time they discovered one more product they could sell on the Internet. But once a bunch of lawsuits sprang up over the subject, it quickly ripened into a spicy topic.

At issue, as many of you will remember, was whether more than two dozen states could defend laws on their books forbidding out-of-state wineries from shipping their vintages to customers in their home states. Happily for all us oenophiles, the justices trampled all over the states' rights arguments.

It seemed that there was hardly a reporter or editor who could resist topping their stories with references to "popping the cork" and "toasting" the ruling, but the New York Times reported that the wineries' gain could be the distributors' and retailers' loss in a very human way:

"Now that the ruling's likely effect is settling in, distributors and retailers fear that out-of-state wineries may gain an advantage, leading to a loss of sales and jobs in New York. And a few wine producers have expressed concern about potential new costs, like licensing fees and bookkeeping," the Times wrote. "On the plus side, the markets of 49 other states would be open to New York State wines. But on the minus side, the state's vineyards could lose what was effectively a monopoly on direct shipments to the thirsty New York market, whose wine drinkers would be able to simply point and click to buy a sauvignon blanc from Santa Barbara County in California or a pinot gris from Willamette Valley in Oregon, in addition to some of the award-winning Rieslings that they have been ordering up to now from the Finger Lakes in upstate New York."

Gov. George Pataki (R), meanwhile, has submitted a bill to the state legislature to allow direct shipments, but not everybody likes it, the Elmira Star-Gazette reported: "Pataki's bill would limit the amount of wine that can be shipped to individuals to two cases a month and not allow retailers to ship the wine -- steps that Sen. George H. Winner Jr., R-Elmira, doesn't like." Here's a note on the paper's editorial cork board: "What the governor needs to accept is that dropping the ban is supposed to open the market for all takers, not just the wineries but also the retailers. He should not be trying to restrict free enterprise. The same argument holds for whether a customer wants one case of wine in a month or four."

The Leader of Corning, N.Y., says local winemakers argue that "out-of-state customers who sample their wineries on a visit to the Finger Lakes would like the ability to replenish their supply without making a return trip."

Kentucky may not enjoy the distinction of being the nation's No. 2 wine-producing state, but husband-and-wife winemakers Chuck Smith and Mary Berry told the Louisville Courier-Journal that they expect to find some new business thanks to the Supreme Court. Larry Leap, president of the Northern Kentucky Vintners & Grape Growers Association, told the paper he expects to make $80,000 to $90,000 a year more from selling wine across state lines "without even trying."

A short Associated Press dispatch reported on the flipside of the situation across the border in Indiana: "The Indiana Alcohol and Tobacco Commission sent a letter May 20 to Indiana's 31 wineries warning them that in-state shipment of wine is a misdemeanor. But some vintners -- like Kathleen Oliver, owner of Bloomington's Oliver Winery -- say they've been shipping in-state for years. She says a lot of wineries are upset by the commission's letter." The state's warning letter leaves us wondering what on earth those bureaucrats have been smoking, er, drinking.

Raisin' Bread

One of the arguments that friends of the wholesalers used against interstate wine shipments was that the Internet could make it easier for teenagers to avoid parental supervision when ordering booze. After all, your spam filter can't ask your kid to fork over ID.

Enter the IDology Group.

An executive at the Tallahassee-based company told the Miami Herald that it has applied for a software patent that checks public databases when customers fill orders on the Internet. "One of IDology's clients, Wine.Com, a San Francisco company that specializes in interstate wine shipments, says the software ... has a remarkable success rate," the Herald reported. "'When we did the test' of IDology software, said [Wine.Com technology chief] Francis Juliano ... 'It was completely accurate with known data and 98 percent accurate with random data.'"

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© 2005 The Washington Post Company

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