Issue link: http://read.dmtmag.com/i/72545
NEWS IN FOCUS to is that they're very interested in working with the winery to make sure that the winery can remain in business and make wine and sell wine and generate cash flow to pay off debts." How serious is the problem? From 2009-2011, MEB received complaints against 68 wineries alleging more than $10 million in nonpayment to growers. In many of those cases, a resolution was reached informally, Aguirre said, but there were 10 cases (which involved 42 growers owed a total of $1.5 million) that led to the adjudi- cation process, with three of those cases ending in licenses being revoked. In the seven other cases, growers were owed an average amount of $35,600. "That's significant money to growers," Aguirre said. "And we want to make sure that mar- ket enforcement has the tools it needs for these limited instances in the industry when you have bad actors who take grapes, make wine, sell the wine and aren't pay- ing growers." Who CAREs? The CARE Act, federal legislation which threatened to curb direct-to- consumer shipping, may be hurting for support. Known as the Community Alco- hol Regulatory Effectiveness Act, or HR1161, the legislation was backed by the National Beer Wholesalers of America (NBWA) with the sup- port of the Wine & Spirits Whole- salers of America (WSWA). It took up where 2010's failed HR5034 (Comprehensive Alcohol Regulatory Effectiveness Act) left off. Supporters said the bill would not prevent direct shipping and solely protected state rights to reg- ulate alcohol. Opponents – includ- ing WI, the Beer Institute and the Distilled Spirits Council of the United States – said the bill would allow states to pass protectionist shipping laws, bypassing federal rulings in favor of shipping. They said wholesalers were trying to pro- 14 VINEYARD & WINERY MANAGEMENT JULY - AUG 2012 tect their role as middlemen in the three-tier distribution system set up after Prohibition. Reports of at least a partial truce began circulating earlier this year following a February meet- ing between liquor wholesalers and producers. And in late March, WI president Robert P. Koch met with WSWA president Craig Wolf. In that meeting, Wolf said WSWA will no longer seek co-sponsors or passage of the bill, according to a statement from WI. WSWA did not respond to requests for comment from Vine- yard & Winery Management. A spokeswoman for the NBWA referred questions to a statement on the group's website in support of the act. Among other things, the statement said the bill's message "has been heard loud and clear: The state-based regula- tion of alcohol pro- tects communities and should not be attacked." The bill's spon- sor, U.S. Rep. Jason Chaffetz, R-Utah, had this to say: "We believe the CARE Act is good legisla- tion and look for- ward to it moving through the legis- lative process and passing the House." With beer whole- expense of consumers, producers and retailers." The CARE Act developments come at a time of rapid evolution in the direct-to-consumer ship- ping scene. This year, New Jersey became the 39th state to approve direct-to-consumer shipping. With many of those states having limita- tions and strict requirements, it can be difficult for a winery to keep up with the latest regulations. At Judd's Hill Winery in Napa, Calif., owner and winemaker Judd Finkelstein is "all for" laws that allow people of legal age to order and get a legal product. "We're very by-the-book here; salers apparently still backing the bill, Free the Grapes! – the organization dedicated to open- ing up direct-to-consumer shipping – was continuing its letter-writing and outreach campaign against HR1161, said Jeremy Benson, the group's executive director. Still, as the WI statement point- Judd Finkelstein of Judd's Hill Winery is sometimes frus- trated by laws preventing shipments to would-be wine club members in certain states. ed out, "The bill has lost steam. Congress now recognizes that this is an intra-industry dispute and that the beer wholesalers are the only ones pursuing this bill that protects their economic interests at the sometimes it cuts into our busi- ness," he said. "We get visitors from every state in the country, and we have had people sign up for our wine club where we go to send the first shipment and we realize, `Oh, you know what? We can't ship to them.' And there goes our business and there goes some- thing that these people, who are adults, should be legally able get and enjoy. It's very frustrating and doesn't make sense to me." WWW.VWM-ONLINE.COM