Wine Case Goes to High Court


WASHINGTON, Dec. 5, 2004 — -- Ann Heidig fulfilled a dream when she started her own winery in central Virginia.

She produces only 5,000 cases of wine a year -- too few to attract a wholesale distributor to push it on store shelves around the country. To survive, Heidig needs to be able to ship her wine directly to buyers across state lines using the Internet.

"We need to be able to sell our wines at any opportunity we get to sell them, because we're small and every sale is particularly important to us," said Heidig, a retired government worker.

But standing in the way are complex state laws that make wine one of the most regulated products in America.

John Bellnchuk, a sales manager for Tarara Winery in Leesburg, Va., said the rules are daunting for small business people to wade through.

"[There are] thick books of regulations that you have to pile through," said Bellnchuk. "You have to go through all this bureaucracy, all this paperwork to try to reach the consumer."

A case currently before the U.S. Supreme Court pits 3,000 small, independent wineries against established distributors and state governments -- 24 of which prohibit wine shipments into their states because of concerns dating back to prohibition, particularly underage drinking.

To drive home that point, the Wine and Spirits Wholesalers of America commissioned an undercover video showing a teenage girl, with parental permission, ordering alcohol on the Internet. Days later, the alcohol arrived at her home in a plain container.

The wholesalers argue that if the laws change, computer-savvy teenagers will be able to buy alcohol more easily. Michael Cox, Michigan's attorney general, agrees.

"There's huge incentive for minors to purchase liquor, whether it be vodka, whiskey or whatever over Internet," he said.

But the winery owners say that what the wholesalers are really worried about is losing their control over distribution. The small winery owners have hired former independent counsel Ken Starr to represent them. He says the wholesalers are "a multibillion-dollar industry, and they are afraid of the erosion of any of their profits."

Chief Justice William Rehnquist -- who's been battling cancer -- will miss oral arguments, set for Tuesday, although he's reserved the right to vote on and decide the case. A decision could come as early as next spring.

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