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Supreme Court boosts interstate wine sales

OUT-LAW News, 17/05/2005

On-line wine sales are set to jump in the US following yesterday's ruling by the Supreme Court that a state cannot stop its consumers buying directly from out-of-state wineries because this discriminates against interstate commerce.

Until now the position has been governed by the 21st Amendment to the Constitution, passed in 1933. This amendment ended Prohibition in the US, and ensured that each state was responsible for regulation of alcohol distribution within its borders.

Some more conservative states passed rules preventing the importing of out-of-state alcohol except to licensed wholesalers, but the constitutionality of this position has since been challenged, especially in those states where consumers are allowed to purchase directly from in-state vineyards.

Two such cases, relating to the laws in Michigan and New York, reached the Supreme Court, which yesterday released its ruling on the issue, upholding a state's right to regulate alcohol sales and distribution within its borders but requiring that states must also treat all vineyards, whether in-state or out-of-state, the same.

Delivering the 5–4 majority opinion of the Court, Justice Kennedy explained:

"If a state chooses to allow direct shipment of wine, it must do so on even-handed terms. Without demonstrating the need for discrimination, New York and Michigan have enacted regulations that disadvantage out-of-state wine producers. Under our Commerce Clause [of the Constitution] jurisprudence, these regulations cannot stand."

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