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Vintners, consumers hope to toast decision barring states from blocking interstate wine shipments to the home
Wine on wheels
Tuesday, May 17, 2005

Wine enthusiasts in Pennsylvania yesterday praised the U.S. Supreme Court's decision allowing interstate wine sales but were unsure if the decision would open up the state's restrictive system.

Stacy Innerst, Post-Gazette
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The Pennsylvania Liquor Control Board was reviewing the potential impact of the 5-4 decision, which overturned laws in New York and Michigan that make it a crime to buy directly from vineyards in other states. Spokeswoman Molly McGowan said the review could take a few days.

Ultimately, though, any changes to the way the state liquor system does business will be made by the Pennsylvania Legislature, said state Liquor Control Board Chairman Jonathan Newman.

"It's my personal opinion that nothing changes in Pennsylvania today or tomorrow" because of the Supreme Court ruling, he said.

Yesterday's decision does not require states to permit their residents to buy wine or other alcoholic beverages from out-of-state wineries. Rather, it prohibits discrimination between in-state and out-of-state establishments. It held that a state that allows wineries within its borders to ship products directly to consumers's homes in that state must accord the same privilege to out-of-state wineries.

For Pennsylvania, which is among the approximately two dozen states that permit in-state winery sales, the issue comes down to this: It can either open up its market to out-of-state wineries or ban shipments from all wineries, including those inside Pennsylvania, Newman said.

It is an issue for the Legislature to decide, he said, adding that lawmakers will have to carefully study the social and tax implications of both choices -- whether to end the special benefits given to Pennsylvania wineries or to expand the opportunities for wineries from other states.

For example, if wine is shipped to households from out of state, a system likely will have to be set up to ensure that only adults 21 and over sign for the shipments upon delivery, Newman said.

There also is the thornier issue of taxation. If out-of-state wine sales were permitted, Newman wondered if an effective tax collection system could be developed and if consumers would be willing to make the purchase once shipping and Pennsylvania taxes were included.

State vineyards that sell to Pennsylvania residents fear a ban on in-state winery sales, if that ends up as the solution, would hurt their businesses. Pennsylvania ranks eighth nationally in the production of wine, according to the Pennsylvania Wine Association.

"That would be a terrible thing to do because a number of us ship a fair amount of wine across the state," said Eric Miller, proprietor of the Chaddsford Winery in southeastern Pennsylvania. "That would be very unfortunate for the industry and would certainly make the [liquor control board] unpopular."

Miller, however, said he didn't think the court decision would lead to a major change for business in Pennsylvania, in part because consumers' buying habits don't change all that much. "Most people who buy wine are buying wine for dinner," he said.

Moreover, wine shipments can be restricted by the weather -- it's hard to ship when the weather is too hot or too cold, he said. And Pennsylvania allows residents to order wine from out-of-state producers, although the wine must be shipped to state liquor stores, where customers must pick it up.

Francis X. O'Brien, counsel to the Pennsylvania Wine Association, said the state had more than 100 small wineries that produced 732,000 gallons of wine last year.

Many of those wineries are connected to family farms and would like to see their businesses expand.

O'Brien said a large part of the business came from tourists, many of whom live out of state, and that they could not legally buy wine during a visit and have it shipped to their homes.

"We know we've got consumers out there. We have mailing lists. People come to visit," he said. "Even if a winery had a 10 percent increase in total volume, a lot of our wineries are small, and that would be a substantial increase for them."

Members of the Pittsburgh chapter of the American Wine Society praised Newman yesterday for making the Pennsylvania liquor sales system more accessible with Sunday hours and other changes.

However, Richard Ryba, co-chair of the local club, said wine enthusiasts such as he would like to be able to get many more wines than are now available to them through the state stores.

He said club members visit wineries on vacation trips and are unable to have their favorite finds shipped back home to Pennsylvania.

"We are all in favor of better access to wines," Ryba said. "Our club motto is appreciation of wine through education, and you can't be educational if you don't have a variety of wines available to you."

First published on May 17, 2005 at 12:00 am
Jim McKay can be reached at jmckay@post-gazette.com or 412-263-1322.
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