Wine lovers toast ruling - East Valley Tribune: Business

Wine lovers toast ruling

Font Size:
Default font size
Larger font size

Posted: Tuesday, May 17, 2005 6:40 am | Updated: 8:25 am, Fri Oct 7, 2011.

Wine sales at Kokopelli Winery in Chandler could double, based on a U.S. Supreme Court ruling Monday that said wine lovers couldn’t be barred from buying their favorite vintage directly from out-ofstate wineries.

"For every small winery, this is a glorious day," said Melissa Minchella, who with husband Don owns the East Valley business.

The Supreme Court said Monday in a 5-4 decision that laws in states such as New York and Michigan that allow shipments from wineries within the state but not from out-of-state businesses are discriminatory.

As many as 24 states that bar out-of-state shipments will have to revise their laws so wineries are treated equally.

It means wineries like Kokopelli that have found favor with winter residents can now keep customers sated year round.

"I received a phone call first thing this morning from Michigan asking if I was prepared to ship," Minchella said. It was from a longtime fan of the Chandler winery’s popular Sweet Lucy who only could take home a couple of bottles when she visited the Valley. Now she wants to have a permanent supply.

Minchella said Kokopelli is already working on revamping its Web site to handle an expected onslaught of orders from faraway fans.

The Supreme Court’s decision was not toasted by some.

In Arizona, all alcohol shipments are prohibited except through distributors, so the ruling doesn’t have an immediate impact on direct shipments into the state, said Paul Bentz, coordinator of the Valley-based Coalition for Safe and Responsible Arizona.

But the organization is concerned that Monday’s ruling could spur on an already-inprogress effort to allow direct shipments from wineries and other alcohol providers, he said.

"That would open the floodgates," Bentz said. "We couldn’t guarantee that the taxes would be collected or prevent sales to minors. It’s like you are expecting Federal Express to be your bartender."

He said the state couldn’t punish out-of-state suppliers by revoking a license, as it could if only in-state shipments were allowed.

Wholesalers and retailers also are not necessarily pleased with the decision. They may be bypassed if connoisseurs can buy directly from their favorite winery.

Katherine Portanova, owner of Arcadia Fine Wines in Scottsdale, said shops that deal in volume and walk-in customers could be hurt if Arizona goes the way of most other states allowing direct shipments.

"It will change the face of how people buy wine, especially people who buy in quantities," she said.

Portanova’s business isn’t likely to be hurt even if the wineries eventually could ship direct to local wine lovers.

"The majority of my customers are looking for rare and limited availability wines to stock their cellars," she said. They rely on her expertise in picking wines and locating them, Portanova said.

The wine industry is booming, with an estimated $21.6 billion in sales and tourists flocking to wineries for tastings and tours. The recent hit movie ‘‘Sideways’’ took a lighthearted look at California’s love affair with the grape.

There also has been consolidation. Smaller wineries say they can’t compete with huge companies unless they can sell directly to customers over the Internet or by letting visitors to their wineries ship bottles home.

The ruling does not affect international wineries; to buy from them, U.S. consumers typically must go through importers or pay duties when bringing bottles into the United States.

The case centered on the 21st Amendment, which ended Prohibition in 1933 and granted states the authority to regulate alcohol sales.

Nearly half the states subsequently passed laws requiring outside wineries to sell their products through licensed wholesalers within the state, enabling them to collect millions in alcohol taxes.

  • Discuss

[Sponsored] Terri's Consignment: Divorce the sofa

'EV Women in Business'

A PDF of the Tribune special section, featuring a mix of sponsored content from our loyal advertisers and newsroom coverage of the East Valley business community.

Your Az Jobs