Limits on direct shipments ‘ridiculous,’ says Coe

LANSING – Leelanau and Old Mission wine producers hoping to continue shipping direct will get what they asked for, but not without a compromise.

A bill passed recently by the state House allows for both in-state and out-of-state wine producers to ship their product direct, but only to individual consumers. Direct shipping to retailers, such as restaurants, liquor stores and other vendors, would be prohibited.

It also calls for a limit on direct shipping of 500 cases per year.

"The limits are ridiculous," said Donald Coe, President of WineMichigan, a lobbying group representing wine producers and owner of Black Star Farms on the Leelanau Peninsula. "Five hundred cases will hardly reach consumer needs," he said.

Rep. Chris Ward said he wants to protect in-state smaller wineries from massive competition. If wine from states like California are allowed to ship direct to Michigan, he said, limiting all direct shipments was the only way Michigan wineries could survive.

Since the U.S. Supreme Court's decision that Michigan must change their state laws when it comes to direct shipment of alcohol, wine makers and wine distributors have been fighting for a say in the wording of the new law.

Ward felt a compromise was necessary.

"I couldn't find any middle ground," said Ward. "The issue has shifted to become about one business pitted against another."

According to Ward, 55 percent of all wineries in the state are shipping less than a couple of hundred cases a year.

Two of the biggest wineries in the state, however, ship over well over 500. St. Julian's, said Ward, ships 1,000 cases per year and Coe's Black Star Farms, the second biggest winery in the state, ships 800.

Compared to the national wine industry, said Sen. Michelle McManus, R-Lake Leelanau, none of Michigan's wineries are large, and direct shipping helps offset the cost of their investment.

"These guys are small guys," said McManus. "They need to direct ship to stay in business."

McManus, along with Rep. Howard Walk, R-Traverse City, have devised a package of bills that sets limits to the wine consumer rather than the producer.

The bills would limit direct shipment to 24 cases of wine per individual consumer.

Both Leelanau legislators believe there was no compromise when it came to their side in favor of direct shipment.

Walker said he was not invited to the negotiations on Ward's bill. McManus remains determined to the bill she drafted.

As for now, Ward's bill goes to the Senate committee on government operations. BN