Proposed law on wine sales has some sour grapes

Just five years ago, there were only 15 wineries in the Wisconsin Winery Association; today, 32 member wineries are spread across the state.

Many wineries thrive on agri-tourism, bringing visitors to their site for winery tours and wine tastings. Most wineries sell wine directly to visiting tourists but many also sell through a distributor, directly to stores and restaurants, and ship wine to customers by mail order.

Having a variety of methods to reach customers helps wineries maintain a steady business, especially important during the slow winter season.

Caught by surprise

In June, the state Senate added changes to the state budget that would change the way wine is sold in our state. The proposal caught everyone by surprise, as the industry had no time to contribute.

Federal wine laws are controlled by the Tax and Trade Bureau, however, each state determines its state wine laws and how in-state and out-of-state wineries must follow them when selling to residents in that state.

Most states have been reviewing their laws since a 2005 U.S Supreme Court ruling, which said that having different laws for in-state and out-of-state wineries was unconstitutional.

In Wisconsin, the current three-tier system of selling wine means that a manufacturer (winery) sells to a wholesaler (distributor), and the wholesaler sells to a retailer (store or restaurant).

There is one exception to this law, which allows Wisconsin wineries to sell direct to a retailer, an important factor for both wineries and consumers.

Distributor is helpful

For an established winery, selling through a distributor makes a lot of sense since a distributor has many sales people who can develop personal contacts and cover a larger area.

But most wineries are not ready to work with a distributor until they have an established brand and enough product to supply a distributor.

Our winery has been in business 35 years and we appreciate having a distributor to help us sell our wine to Wisconsin stores and restaurants. But it took us fifteen years to be ready to sell through a distributor.

We would like to see the new Wisconsin law continue to allow at least some wine to be sold directly, giving wineries a chance to become established and maintain local contacts with their market.

Change affects shipping

Another of the proposed changes would make it more difficult to directly ship wine to customers. Wisconsin would require a permit - with an annual fee ranging from $100 to $1,000 - to ship wine directly in the state.

Paperwork would need to be submitted to the state with the recipient's name, address, birth date and a record of what they purchased.

The shipper - usually UPS or FedEx - would also be required to verify that the receiver of the shipment is 21 or older. Shippers already require an adult's signature when delivering alcohol.

We feel these new rules are too stringent, a violation of customer privacy and will price Wisconsin residents out of the direct shipping market.

One last adjustment that needs to be made to the proposal is to allow the transportation of wine for use as an ingredient. An unintended outcome of this proposal may not allow us to receive grape brandy, which we use to produce our Port wine.

Other wineries would have similar problems in continuing to make certain products that use other wines.

These proposed changes to Wisconsin wine laws are now being discussed in a conference committee and need input from Wisconsin wineries, wholesalers and consumers.

Let's keep Wisconsin a growing wine state.