[wine] HR 5034 direct sales

FYI- October 18, 2010 Proposed Law Would Limit Interstate Wine Shipping By ERIC ASIMOV SEATTLE IT.S just one more anonymous warehouse here in a mundane industrial district, but within its humble walls lie 23,000 temperature- and humidity-controlled square feet of Garagiste, one of the quirkiest, least-known retail treasures in the wine world. Least-known, that is, unless you are one of the 127,000 or so people who receive daily e-mails offering a trove of unusual bottles, described in beguiling detail by Jon Rimmerman, Garagiste.s founder and owner and guru of the wine disenfranchised. Those e-mails beckon with obscure Bordeaux like Le Dé de Lamery, which, Mr. Rimmerman said, recalls Bordeaux before it became a corporate product; singular Sardinian wines from visionary producers like Dettori; and even new-school Washington State cabernets that may not exemplify Mr. Rimmerman.s decidedly Old World tastes but are fine values and good examples of the Washington style. It may sound like any other independent wine shop, but more than 99 percent of Garagiste.s business comes through Internet orders, Mr. Rimmerman says, and more than 70 percent of its sales are shipped directly to buyers in other states. Garagiste has plenty of customers in places like New York City and San Francisco. But for those who live in less-well-served areas of the country, Garagiste and other retail operations that do big Internet business, like K & L Wine Merchants in California and Zachys in Scarsdale, N.Y., are lifelines to the world.s wonderful diversity of wines. Yet as welcome as these lifelines are, they may be threatened by a bill introduced earlier this year before the House of Representatives, the Comprehensive Alcohol Regulatory Effectiveness Act of 2010, or H.R. 5034, which has the potential to severely restrict direct interstate shipping of wine by retailers. Direct sales from wineries could be threatened, too, although the current language of the bill appears to focus more directly on retailers. Proponents, including beer and wine wholesalers, say that that is not the intention of the bill, which would make it far more difficult for wineries and retailers to challenge state laws in the federal courts. Instead, they say, it would merely reaffirm the authority of the states to regulate alcohol sales, and diminish the authority of federal courts, which they say have been confusing and inconsistent. They also suggest that they are trying to prevent minors from illegally obtaining alcohol. Opponents, however, including wine and beer producers, retail shops and importers, assert that states already have ample regulatory authority. They say the bill is meant to protect beer and wine wholesalers, who have been cut out of the loop by the rise of direct sales. Wholesalers have set their well-financed lobby to work for the bill and have liberally doled out campaign contributions to supporters. Without getting too technical, the heart of the legal issue is the conflict between the 21st Amendment to the Constitution, which repealed Prohibition and gave the states the right to regulate alcohol sales, and the commerce clause of the Constitution, which gives the federal government the power to regulate commerce between the states. Three fairly recent developments have coalesced to force this arcane and confusing corner of the law into an emotionally charged spotlight. First is the sheer quantity of fascinating but little-known wines from around the world that are now on the market, and the growing number of Americans who want to drink them. Add to that the rise of Internet commerce, which almost overnight expanded retail choices far beyond local grocery stores and wine shops. Finally, there came a 2005 Supreme Court decision that struck down arbitrary state bans on interstate shipments from wineries to consumers. These developments threatened the position of wholesale distributors who, in the three-tier system governing the sale of alcoholic beverages, buy from producers and then sell to retailers. Mr. Rimmerman, 44, whose piercing olive-green eyes are framed by salt-and-pepper curls and long sideburns, set up Garagiste in a tiny office back in 1995, when Internet commerce was in its infancy. His first e-mails went to perhaps 30 people. As Garagiste grew, he said, he wanted to make sure that it was on firm legal ground, so he presented his plan to sell wines around the country to the Washington State Liquor Control Board. .They said, .We think it.s all right, as long as you collect sales tax in-state,. . Mr. Rimmerman recalled. .They compared it to sending shirts across state lines.. And so Garagiste grew by word of mouth, building its base of ardent fans drawn by Mr. Rimmerman.s discoveries; his spirited, enthusiastic prose; his insistence on selling only one wine at a time, via e-mail, and shipping orders just twice a year, in the fall and the spring, to minimize harmful exposure to heat or cold. States clearly already have the right to prohibit shipments of wine from out of state, so long as they also prohibit shipments originating within the state. Garagiste indicates on its Web site, garagistewine.com, the 33 states it will ship to and the onesit will not. .It.s a negative step for commerce,. Mr. Rimmerman said of the House bill, .a broad-based threat to Americans. right to freedom of choice.. Wholesalers argue that they are not acting to protect their own financial position but the rights of states. .Our main concern is making sure states can continue to effectively regulate alcohol and maintain the system that serves the public well by balancing competition with an orderly market,. said Rebecca Spicer, a spokeswoman for the National Beer Wholesalers Association. The bill, though, which is unlikely to come up for a vote until next year, would clearly mean a narrowing of choices for consumers. For his part, Mr. Rimmerman is considering contingency plans. For example, he is considering applying for retail licenses in other states so he can essentially distribute wines to himself, and sell to customers in those states. .It.s easier to deal in guns than in wine,. he said. -- ------------------------------ * Dr. James Ellingson, jellings(a)me.umn.edu * * University of Minnesota, mobile : 651/645-0753 * * Great Lakes Brewing News, 1569 Laurel Ave., St. Paul, MN 55104 * * james(a)brewingnews.com James.Ellingson(a)StThomas.edu *