Current New Jersey wine law affords its in state, small, fledgling wine producing industry the right to sell direct to consumers from their own showrooms. That’s a good thing because wholesalers will not handle these small production wines and 90% of the state’s local winery sales occur just this way. Practically all New Jersey wineries, like The Cape May Winery and Vineyard, would close their doors if a recent ruling is upheld that abolishes the legality to this direct to consumer channel . The Garden State Wine Growers Association is locked in our country’s latest battle to protect, and in some ways establish, consumers’ and growers’ free enterprise rights following a Third Circuit Court of Appeals ruling bringing into question a state law giving local winery operators the right to sell their own wine out of their own showrooms because it discriminates against out of state wineries that are prohibited to ship directly to New Jersey consumers by the state’s very own laws.
If it were not for antiquated, misdirected, and prehistoric legislation that is protected by powerful alcohol wholesale lobbies then the right answer to this new problem in New Jersey would be sensibly legislated; permit wine enthusiasts in New Jersey to buy the out of state wines their own state’s local wholesalers and retailers fail to inventory and continue to allow local wineries the right to sell their own wine on their own premises. Simple. But in the December Court of Appeals ruling in the Freeman V. Corzine case arguing the legitimacy of the state’s ongoing right to prevent direct to consumer shipments, it was found that the suffocating state laws preventing direct shipment were not in violation of the Constitution’s Commerce Clause since both in state and out of state wineries were equally regulated. But, the Court did find that a state law allowing local wineries to sell direct to consumers discriminated against out of state wineries.
How crazy is all this? Consumers can not buy wines they want in New Jersey based on the business whims of wholesalers. Local businesses and entrepreneurs might not be allowed to sell their own products from their own farms. Because they have limited production wines, wholesalers that are protected by lobbyists and direct to consumer shipping legislation will put these local wineries out of business. The agriculture industry in New Jersey will suffer, jobs will be lost, consumers will have less choice, and wholesalers will continue to enjoy artificially capped competition. When and where will this all stop? It might have a chance in New Jersey now that the Garden State Wine Growers organization has retained its own legal counsel to argue for direct shipment as a sensible measure for keeping the local state industry alive.
Last year I wrote about HR 5034 and its potentially horrifying impact on consumer rights and local wineries in my own State of Massachusetts. My Senator remains unresponsive to consumer rights and the overall insanity behind a powerful lobby that exists to prevent competition for wholesalers and distributors of alcoholic products that refuse to make available wines that local consumers want because it does not fit their business model. Now, the New Jersey wine industry is making a last ditch effort to stay alive following this debilitating December ruling, pushing for the opening up of direct to consumer shipping by out of state wineries, in effect introducing more choice and competition, so they can continue to sell wine from their own showrooms and remain as a viable local industry. Thirty seven states currently permit direct shipping, and last year the New Jersey State Senate introduced a bill to make themselves number thirty eight to bring free enterprise to their own state. But, the State Assembly is dragging its feet and has not acted on the bill. I was disheartened, but not surprised, when I saw this reported in a local New Jersey town newspaper:
Paul Santelle of the New Jersey Liquor Store Alliance said his organization would support direct selling to consumers as long as shipping is not involved, which would mean out-of-state wineries would have to have stores in New Jersey. You and they know that won’t happen.
The ongoing restriction of free enterprise when it comes to the wine industry is out of step with rights that US consumers are entitled to under the spirit and intention of our nation’s constitution. The violation comes at the expense of many and only benefits small in number, but politically and financially powerful alcohol wholesalers. Help New Jersey and our country rise above all this by clicking this link to Free the Grapes and make a simple personal appeal to force the New Jersey Assembly to take up AB 1702 as companion legislation to Senate Bill 766 that passed through the Senate last year allowing for direct shipping.
Also, click this link for an excellent recent Wine Spectator overview article covering this development.