Regulations Have Industry Officials in Oklahoma Whining about Wine

Article excerpt

Spooked by a pending lawsuit, shipping companies are refusing to ship any wine in Oklahoma, even those shipments that are permitted under state law, members of the House Agriculture and Rural Development Committee were told Tuesday.

In light of the current confusion, and for the sake of the health of Oklahoma's wine industry, winemakers are asking the Oklahoma Legislature to revisit the state's regulations for shipping wine.

"All of a sudden, since this lawsuit has been filed, it appears that the shippers that ship out of Oklahoma have said, 'There's enough confusion that we're not interested in handling anybody's shipments,'" said state Rep. Danny Morgan, D-Prague, who requested an interim study on Oklahoma's shipping laws and regulation of the wine and grape growing industry.

In March, three Oklahoma liquor wholesalers filed a federal lawsuit seeking to overturn a new state law allowing Oklahoma winemakers to sell their product directly to restaurants, retail liquor stores and consumers who visit the wineries. Oklahoma voters had overwhelmingly approved the new law in 2000, creating a special exemption for in-state wineries that beforehand could only distribute their product through a licensed liquor wholesaler.

Richard Kennedy, owner of Tres Suenos Vineyards and Winery in Luther, said state winemakers had been "held captive by the wholesalers" before the new law allowed wineries to self- distribute.

"Now that it's passed, they want to take away our rights to do that," said Kennedy of the wholesalers. J. L. Gilbert, owner of Sparks Vineyard and Winery and the Wine Village in Stroud, said if the lawsuit is successful in overturning the law voters had approved, it would devastate Oklahoma's blossoming wine industry.

"The law says as an Oklahoma winery I'm required to sell my wines to the wholesalers, but the wholesaler is not required by law to buy from me," said Gilbert. "So basically if he decides not to buy my wine, I'm out of business, and there's nothing I can do about it."

However, the Oklahoma wholesalers' lawsuit was prompted by a U.S. Supreme Court ruling that indicates that Oklahoma's wine laws will inevitably need to be changed in the near future. In May 2005, the court ruled in Granholm v. Heald that state laws that give privileges to in-state wineries that are not extended to out-of- state wineries are unconstitutional.

Since Oklahoma law does not permit out-of-state wineries to sell their wine directly to retailers, the Supreme Court ruling means Oklahoma's new state law is unconstitutional and must be thrown out. …