Honestly, I spend a lot of time beating my head against the wall because of our ridiculous wine shipping laws in the tri-state area. It’s like Prohibition all over again – in the name of commerce. I first posted an alert on this particular issue back in June, when the folks at Kinkead Ridge brought it to my attention.
Harmony Hill, one of our favorite Ohio wineries, is no longer shipping wine to consumers in any state due to Ohio’s new shipping laws. Post your comments and support for Harmony Hill. I find it sad that Ohio’s laws are not only hurting consumers, but hurting small winemakers in its own state.
UPDATE: Nancy Bentley, from Kinkead Ridge, posted information in the comments section of this post on how to contact your congresspeople. She also mentioned that Kinkead Ridge has stopped shipping wine as well.
Here is the letter from Harmony Hill:
Dear Friends of Harmony.
As of Monday, October 1, Harmony Hill Vineyards & Estate Winery
will no longer ship wine to consumers, in ANY State. This
regretful decision is based on a new law passed by our legislators that
bans direct shipment of out-of-state wine to Ohio consumers from wineries that
produce more than 150,000 gallons. That, alone, would not be an issue (Harmony
Hill produces less than 3000 gallons) except that the law limits the
purchase per household to no more than 24 cases.
Sec. 4303.233. No family household shall purchase more than twenty-
four cases of nine-liter bottles of wine in one year.
Our fear is the winery’s liability for shipping that illegal 25th case to
an Ohio household, since we are not able to track how much wine each
household has already purchased.
I could easily turn this into a five page email touting my opinions of
how this could have possibly happened in this day and age, but instead ask that
you check the "Legislative Alert"
link on our web site to see how many
of Ohio citizens’ rights have been rescinded by this ridiculous
legislation. I will only share one letter from a loyal Harmony Hill customer who
summarizes these limitations very well, and ask that you visit our
Legislative Alert page and form your own opinions based on what others around
the country are stating.
Bill & Patti
Recently, the Ohio Legislature enacted a law
that, depending on how it is interpreted and enforced, may effectively ban
direct sales of wine from producer to consumer, except what is bought at the
actual winery. This ban is already effecting sales both within and without the
state. People who are in wine clubs that ship a bottle or two every month
were abruptly cut off by this legislation. The law was enacted in near
secret and was quietly attached to a budget bill. I think we can prudently
ask what the source of urgency was to so pass such legislation.
The Ohio Wine Producers Association is fond of passing off that the Ohio wine import ban is all about protecting Ohio jobs. The OWPA does not specify who’s or how many. This concept is expressed in sound bytes and other brief, unqualified, statements that imply more than they say.
For this argument to have merit, at least three things need to be considered. First, is the assertion about jobs true or provable and does the legislation NET more jobs than it eliminates? Secondly, if the first assertion lacks enough evidence to be compelling, how can we justify the government stepping in and smashing the free market? And lastly, is this notion of government enforced jobs protection consistent with other actions, or lack thereof, by the state?
First, I would challenge the Ohio Wine Producers Association to produce economic studies indicating what jobs have been lost because of direct shipment and where and over what period of time these jobs were lost. I would caution them to also include an unbiased prediction of jobs lost in wineries here in Ohio because of the ban. We already know that wineries INSIDE Ohio are now afraid to ship wine, even within the state, because of the Ohio Liquor Control Board’s ambiguous and potentially far reaching interpretations of the law. Further, jobs will be lost as other states ban the import of Ohio wines also because of the ambiguity in the law. And lastly, Ohio wines are on the rise in quality and national respect, can we get a handle on the potential future markets lost because of this protectionism? I suspect the OWPA has no such studies.
Secondly, is it appropriate for the government
to step in at this stage and risk smashing the direct sales market for Ohio
wines? Some economists believe that government interference is always
wrong and always damages the free market. Although I have some sympathy
for that notion, I do not necessarily agree with it. But thinking about
that does point us in an interesting direction. The only place I think
regulation might be needed, and I think most would agree with me, is in
the case of rogue monopolies or groups that function like monopolies. If
we look at all sides of this debate we see that, on one side we have the Ohio
Wine Producers Association, the Beer and Wine Distributers, and retail wine
interests. On the other side we have small Ohio farms who grow grapes and
make wine. Clearly, this legislation was not designed to regulate
monopolies, this legislation was designed to protect monopolies.
Lastly, we need to consider if this action is
somehow consistent with other actions taken to protect Ohio jobs in the wine
industry. I cannot imagine wineries in Ohio, most of whom are small, have
lost jobs by shipments from out of state wineries directly to consumers.
Ohio wineries use the direct sales approach to circumvent the rigid mark up
structure used if they go through the distributer-retail system. In that
system they get perhaps 33% of what they do if they sell direct to the
consumer. Most Ohio wineries are barely surviving, they simply cannot do
so if they have to loose 66% of every sale. In fact, the direct sales
model will help our wineries as people both in Ohio and outside it try our
wines. Direct sales is a potential way for the small winery to be rewarded
for crafting excellent wine. Direct sales is a great tool to get our
fledgling wine industry to add jobs in agriculture. We know this to be possible,
for nearly a century Ohio was the number one national exporter of wine, and in
fact the American Wine Industry was founded in Cincinnati in the 1820′s by
Nicholas Longworth. Ohio could do this again because we indeed have the
climate and soil. This could net 1,000′s of jobs if it was allowed to take
place. If our state government was interested in jobs they would take a
look at retailers who discount daily under $4 per bottle, prices that are close
to the cost of the label, cork, glass, and trucking. Such retailers are
using wine as a loss leader, something I cannot imagine is good for jobs in
Ohio. This legislation was obviously not part of a consistent approach to
jobs protectionism at all, nor is it clear any action was needed on such an
Wineries do not need our state’s interference
under the guise of “protectionism”. The scariest words of all are “trust
me, I am from the government…”. Wineries need the state off their backs
so they can continue to farm grapes and make excellent wine. We need to call on
our legislators to repeal the ban.
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