California Wineries Should Work To End The State's Discriminatory Wine Law

They should do it before the courts do it.

When the Supreme Court ruled in 2005 that a state may not allow its own wineries to ship wine to residents in the state, but ban out-of-state wineries from doing the same thing it brought about a sea change in how wine was distributed in the U.S., particularly by small wineries. It was the result of a good strategy that was paid for primarily by California wineries. It’s for this reason, among others, that California should change its own discriminatory laws where wine distribution is concerned.

California allows its own wineries to bypass the middleman wholesaler and sell directly to restaurants and retailers in the state. However, state law bans out-of-state wineries from bypassing those same California wholesalers and selling directly to retailers and restaurants in the state.

While this situation isn’t a matter of the kind of direct-to-consumer shipping that was litigated in the 2005 Granholm v Heald Supreme Court decision that ended discrimination in the interstate shipment of alcohol, it is discrimination nonetheless. More importantly, it is unconstitutional discrimination and ought to be ended. And it’s California wineries that ought to lead the charge in ending it.

It’s not as though discrimination in “self-distribution” hasn’t already made its way to the courts. In December 2005, seven months after the Granholm decision, the Costco v Hoen case out of Washington State was decided in a Washington Federal District Court. In that case, Costco challenged a law identical to the current California law that bars out-of-state producers from selling to California retailers, while California retailers were allowed to do just that. In her opinion, Judge Pechman wrote: