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by Joel Goldberg
A State House Committee has unanimously approved a bill to halt all retail wine delivery in Michigan, whether by in-state or out-of-state merchants. The action, on a 6-0 vote, came Thursday, November 13, one day after the bill was introduced.
SHIPPING TIMELINE
SEPT 30 -- Federal Judge Denise Page Hood overturns Michigan's ban on out-of-state retailers shipping wine into the state
OCT 3 -- Internet retailer Wine.com announces entry into Michigan market
OCT 6 -- Judge Hood stays enforcement of September 30 ruling, pending an appeal
OCT 9 & 14 -- MichWine places two orders with Wine.com for delivery to Michigan
OCT 10 & 15 -- Wine.com confirms shipment of two orders from California
OCT 16 & 21 -- Two Wine.com orders delivered in Michigan, violating court stay
OCT 23 & 24 -- Defendants file appeal of Judge Hood's ruling
NOV 12 -- State Reps Farrah and Ward introduce bill to ban all retail wine deliveries
NOV 13 -- Rep. Farrah's committee holds public hearing and approves shipping ban
Prior to voting, the House Regulatory Reform Committee gave just 15 minutes email
notice of the bill's
required public hearing. The full House will consider the bill when its lame duck
session resumes in early December, after the hunting season recess.
The legislation would outlaw such common
practices as sending gift baskets that contain wine, or stores
delivering wine to the site of a wedding or
party. Michigan retailers could only turn over wine to customers at their stores, and consumers would lose
the right to order wine by phone or online for retailer delivery.
According to Cari Noga in Crain's Detroit Business, the ban would also jeopardize the existence of new Michigan online startup, Winebuys.com,
whose entire business model relies on shipping directly from Michigan to customers nationwide. Noga reported its Detroit-area founders recently invested over $1 million to start the business, and anticipate $10 million in sales by next year.
The bill, co-sponsored by term-limited lame duck Representatives Barbara Farrah and Chris
Ward, came in response to a recent Federal court decision (article)
that overturned Michigan's retail wine shipping law as unconstitutional.
The invalidated law let in-state retailers ship or
deliver wine to their customers, but denied the same right to
out-of-state merchants.
Pay-to-Play in Lansing?
Michigan's Beer and Wine Wholesalers have already reported political donations that exceed $700,000 during the current election cycle, according to the Detroit News. This figure doesn't include contributions made close to Election Day.
Numbers supplied to MichWine by Rich Robinson of the Michigan Campaign Finance Network show that members of the House Regulatory Reform Committee -- which just passed the Wholesaler-supported delivery ban -- took over $37,000 from the MBWWA. Rep. Barbara Farrah, the bill's sponsor and Committee chair, also got more than $3,000 in "travel expenses" to attend the last two MBWWA winter meetings.
"This is the sort of shameful, pay-to-play politics that creates the extraordinary cynicism Americans have toward the political process," Tom Wark, executive director of the Specialty Wine Retailers
Association, told an AP reporter.
Robert Epstein, plaintiffs' attorney in the case, called the legislature's attempt to prohibit all retail shipping "vindictive", noting that Michigan's own retail businesses and consumers would be the major losers if the proposed delivery ban passes. Epstein acknowledged that a ban could supply grounds for the State to return to court and seek dismissal of the original verdict.
Those who received sufficient advance notice to attend the Committee hearing included representatives of the Michigan Beer & Wine Wholesalers Association (MBWWA) and the state's Liquor Control Commission, both of whom spoke in favor of the ban.
MBWWA members are among the state's top contributors to the campaign coffers and
officeholder funds of Michigan legislators (see sidebar). They control the selection, price and distribution of nearly all wine sold at retail and in restaurants within Michigan.
If the legislative delivery ban fails to pass and the court ruling remains intact, Michigan consumers would have an option to receive wine deliveries from out-of-state retailers who don't buy from MBWWA members.
Last update: 11/17/08
PREVIOUSLY IN MICHWINE ON RETAIL SHIPPING:
Original story: Court throws out Michigan retail shipping law, with updates
Judge Hood's full ruling (will open in new tab or window)
Judge Hood's stay order (will open in new tab or window)
Editor's Blog: Don't place your order yet
Story: Wine.com shipping to Michigan in violation of court stay
Editor's blog: Wine.com is wrong. But Michigan's shipping ban is much worse.
Story: State and Wholesalers appeal court ruling, with updates
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