Wine Without Borders

How Illlinois Wine Lovers Lost Their Rights

May 22, 2008 – 12:54 pm

HOW ILLINOIS WINE LOVERS GOT SCREWED

In October 2007, Illinois Governor Rod Blagojevich signed HB 429 into law. Taking effect June 1, 2008, the new law prohibited Illinois consumers from buying and having shipped to them wine from out-of-state wine merchants and on-line wine stores. The new law stripped consumers of a right they had for the past 15 years. HB 429, however, explicitly gave Illinois-based wine merchants, Illinois wineries and out-of-state wineries the right to ship to Illinoisans.

The restrictions on buying wine from out-of-state retailers was demanded most ardently by Illinois wholesalers, who have given more than $6.3 million to Illinois legislators since 2000 and who benefit financially from forcing all retail sales of wine in Illinois to result from a transaction that starts with them. However, the law was also supported by most wineries inside and outside Illinois as well as Free the Grapes and the California Wine Institute. Despite being informed that the new law violated the U.S. Constitution and despite being contacted by hundreds of Illinois consumers who opposed the new restriction on consumer freedoms, the Illinois legislature passed the law anyway.

THE CONSEQUENCES
-Illinois Wine Lovers will lose access to thousands of wines that Illinois’ wholesalers do not bring into the state .

-Illinoisans will lose access to wines that might have sold out in Illinois, but are still readily available from other wine merchants across the country

-Illinoisans will lose access to thousands of wines produced by California’s virtual wineries that do not hold “producer licenses”

-Illinoisans will no longer be able to have shipped to them wines they’ve purchased at most wine auction houses across the country

-Illinoisans will have to stop purchasing wine from most retail wine clubs across the country.

-The state of Illinois has lost out on millions of dollars in tax revenue that would have resulted from taxing the sale of wine from out-of-state retailers, a condition retailers were happy to comply with.

-The state of Illinois and its residents will be exposed to the prospect of extraordinarily costly litigation in order to rectify the unconstitutional nature of the law.

WHO DID AND DID NOT SUPPORT HB 429

Supporters of the Unconstitutional and Anti-Consumer HB 429
Associated Beer Distributors of Illinois
Wine & Spirit Distributors of Illinois
California Wine Institute
Free The Grapes
Beverage Retailers Alliance of Illinois
Illinois Grape Growers and Vintners Association

Opposition to the Unconstitutional and Anti-Consumer HB 429
Specialty Wine Retailers Association
Illinois Winemakers Alliance
Consumers
Rep. Julie Hamos
Sen. John Cullerton

WHY IS HB 429 UNCONSTITUTIONAL
In 2005, the Supreme Court of the United States reconfirmed its long history of enforcing the economic non-discrimination principle of the U.S. Constitution’s Commerce Clause when it wrote in Granholm v. Heald:

“Time and again this Court has held that, in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter…This rule is essential to the foundations of the Union. The mere fact of nonresidence should not foreclose a producer in one State from access to markets in other States…States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.”—Justice Anthony Kennedy writing for the Court in Granholm v. Heald (2005)

The basic principle of the Constitution’s Commerce Clause is that at state may not favor in-state business by discriminating against out-of-state business. This is exactly the situation that exists in Illinois after HB 429, which allows in-state wine retailers to ship wine to Illinois residents but prohibits out of state retailers from doing the same.

The principle of non-discrimination was most recently upheld by Federal Judge Stanley Fitzwater in Texas who struck down an identical anti-wine retailer scheme in that state. Judge Fitzwater relied on the ruling in Granholm v. Heald to overturn the protectionist laws in Texas.
HOW DID A LAW AS BAD AS HB 429 EVER GET PASSED?

Money.

Since 2000, Illinois wholesalers have contributed more than $6.3 million to Illinois state political campaigns. Among the 15 co-sponsors of HB 429 in the Illinois House and Senate, 13 of them count the Associated Beer Distributors of Illinois as among their top campaign contributors in 2006.

According to “FollowTheMoney.Org”, which tracks state campaign contributions, the lead sponsor of HB 429 in the House, Representative Edward Acevedo, has received $32,000 from alcohol wholesalers since 2000, including $10,000 since the legislation was introduced last year. One Senate sponsor of HB 429, James Clayborne, Jr., has received $85,000 from alcohol wholesaler interests since 2000, including $15,000 since the legislation was introduced. The lead sponsor of HB 429 in the Illinois Senate, Ira Silverstein, could count the Associated Beer Distributors of Illinois as his most generous sponsor during his last election in 2004. Since 2002, Governor Rod Blagojevich, who signed HB 429, has received more than $500,000 just from alcohol wholesalers in Illinois.

HOW TO MAKE YOUR VOICE HEARD:

There are various ways to make your voice heard. For example, you might contact any of the following who supported HB 429 and voice you distaste:

Associated Beer Distributors of Illinois: info@abdi.org
California Wine Institute: http://www.wineinstitute.org/contact
Free The Grapes: Fedup@freethegrapes.org
HB 429 House Sponsor: Edward Acevedo: eacevedoed@ilga.gov
HB 429 Senate Sponsor, Ira Silverstein: silverstein@senatedem.state.il.us

You can also find your own Representative or Senator in Illinois by going here (click on “by address”): http://www.elections.state.il.us/DistrictLocator/SelectSearchType.aspx