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COURT GIVES VINTNERS GRAPE EXPECTATIONS.

Byline: Eugene Tong Staff Writer

With the prospect of being able to sell anywhere in the country, California vintners toasted Monday's U.S. Supreme Court ruling allowing consumers to buy directly from out-of-state wineries.

``In one word - yippee!'' said Cyndee Donato, co-owner of the Lancaster-based Antelope Valley Winery. ``We sell over the Internet, and we sell by phone.

``When you're small like us, having to say 'no' to people because of state rules can really cut into our business.''

The 5-4 decision overturns laws in New York and Michigan that prohibit out-of-state wineries from shipping directly to buyers. The states argued that the laws were designed to protect local wineries and prevent underage drinkers from purchasing wine, and that they had the right to adopt them under the 21st Amendment, which ended Prohibition in 1933.

The ruling likely won't affect what consumers see on store shelves, but it will be a boon for small growers and wineries, said Steve Gross, director of state relations at The Wine Institute, a San Francisco-based California wine trade group.

``The top 25 wineries are producing 90 percent of the wine, and they'll still have the their distribution channels,'' he said. ``But a little winery that only has distribution in five states, it's going to have a proportionally larger impact on them.

``Even larger wineries tend to have some kind of specialized vintages ... that aren't sold in normal distribution. A lot of these are probably going to be wine you're going to get in a tasting room.''

The Wine Institute, citing the industry's Gomberg-Fredrikson Report, said the state's wineries shipped 428 million gallons of wine in the United States in 2004. The institute estimates the retail value of the domestic shipment at $15 billion.

While the high court's ruling dealt specifically with New York and Michigan, 22 other states have laws barring interstate shipments.

``States have broad power to regulate liquor,'' Justice Anthony Kennedy wrote for the majority. ``This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers.

``If a state chooses to allow direct shipments of wine, it must do so on even-handed terms,'' he wrote in an opinion joined by Justices Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

In a dissenting opinion, Justice Clarence Thomas wrote that the court's ruling overturns regulations aimed partly at protecting minors. He also said the 21st Amendment gives states the authority to regulate alcohol.

In Los Angeles County, growers harvested 644 tons of wine grapes in 2004 - up from 566 tons a year earlier, according to the Agriculture Commissioner's Office.

That's a pittance compared with the state's famed wine-producing regions in Northern California, but the 2004 crop was worth $743,000, more than double that of 2003 because of the focus on special varietals.

``It's small, but it is growing,'' said Richard Sokulsky, a deputy county agriculture commissioner.

About 25 percent of the grapes are produced in vineyards tucked in the Santa Monica Mountains - right off Sunset Boulevard and the San Diego Freeway, he said. The rest are scattered in the Antelope Valley and Agua Dulce, northeast of Santa Clarita.

Still, it will take months for the 24 states to reassess their laws, said Jim Fiolek, executive director of the Santa Barbara County Vintners Association.

``One thing that has to be taken into consideration - the carriers that take the wine,'' he said. ``It doesn't mean tomorrow you or me can ship wine to Michigan and New York. UPS has to take it and accept it.''

Some local vintners relish the opportunity for Los Angeles wines to tap new markets.

``We're a little guy who appreciates any shot at an increased market presence,'' said Cathy MacAdam, co-owner of Agua Dulce Vineyards. ``It's a great opportunity for a boutique winery like ourselves to extend to New York and Michigan.''

The winery produces about 50,000 gallons of wine per year, with mail order making up some 10 percent of business. MacAdam believes her product can help expand that, partly through marketing Los Angeles as a birthplace of California wine.

``That fact distinguishes us from the marketplace all by itself,'' she said. ``It might draw attention and make us the pick over the Sonoma or the Napa Valley product that you can get from the liquor stores there.''

Dick Kelsey, whose Kelsey See Canyon Vineyard in San Luis Obispo produces a specialty apple-infused chardonnay and merlot from the local fruit, sees the chance to get its award-winning products into private cellars nationwide.

``If this opens up even a few states, it's going to be a tremendous plus,'' said Kelsey, owner of the small five-acre vineyard and winery. ``A lot of people come in here from New York who want to join the club, but they can't do it.''

The Associated Press contributed to this report.

Eugene Tong, (661) 257-5253

eugene.tong(at)dailynews.com

CAPTION(S):

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Photo:

(color) Julie White, a sales associate at Agua Dulce Vineyards, prepares boxes of wine for shipment on Monday.

David Crane/Staff Photographer
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Publication:Daily News (Los Angeles, CA)
Date:May 17, 2005
Words:851
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