Wine Without Borders

Why Won’t Michigan Ask Questions About Wine Shipping?

November 4, 2008 – 7:23 am

It has been said that “The first step toward wisdom is asking questions”. This has always made sense to me. And I’m going to suggest that the tactic be investigated by the Michigan Attorney General’s office.

Recently the Michigan Attorney General announced they would appeal the Michigan Federal District Court ruling in the case of Siesta Village Market v. Granholm. This was the case in which Judge Donna Page Hood declared that Michigan’s unequal treatment of in-state and out-of-state wine merchants where shipping wine directly to Michigan consumers is concerned violated the commerce clause of the U.S. Constitution. Why? Because the state could give the court no compelling reason why its blatant discrimination against out-of-state business was the only way to protect state interests. The judge noted that the Supreme Court of the United States had already rejected the reasons the State of Michigan had put forth for defending their discriminatory and anti-consumer regulations.

As was pointed out yesterday in a well argued announcement, one very simple, productive and pro-consumer way of dealing with the unconstitutional nature of the Michigan laws concerning out-of-state retailer shipping into Michigan would be to simply create licenses that out-of-state retailers could obtain from the state that required them to file reports with the state on what was shipped to consumers, to assure a signature of an adult was obtained at the point of delivery, to remit sales taxes to the state and to submit themselves to Michigan legal jurisdiction. Basically, the very same conditions under which out-of-state wineries are able to ship to Michigan residents.

The upside of this approach is obvious. Consumer demand is met, consumer rights are protected. the unconstitutional nature of the Michigan law is fixed and the state raises desperately needed tax revenue from a source quite willing to pay the taxes. But that won’t happen. Why?

According to the report in the Traverse City Record-Eagle, “Ken Wozniak, director of executive services for the Michigan Liquor Control Commission, said the state appealed because the ruling ‘undermines the LCC’s licensing system for retailers.

“We don’t know who these people are or what they had to go through to get licenses in other states,’ Wozniak said.”

I have a simple suggestion for Mr. Wosniak:…..ASK!

That’s right, Mr. Wozniak. Reach out to your peers at other state alcohol agencies and ask them what a businessperson must do to obtain a retail liquor license in those other states. One presumes that Michigan has a modicum of requirements that allows a person to obtain a liquor retailers license in that state. Wouldn’t it be both instructive and less expensive for the people of Michigan to have the Michigan Liquor Control Commission simply spend a day looking at the websites of other state liquor control commissions or making calls to ask questions or penning a letter requesting information about what a retail license holder must do to obtain that license in other states, rather than actually spending hundreds of thousands of Michigan tax payers dollars litigating an appeal they know they are likely to lose?

The fact of the matter is, the ruling that the Mr. Wozniak believes “undermines the LCC licensing system for retailers” does nothing of the sort. What it does do is undermine a system that is easily altered in a way that would no longer punish consumers, drain the state of tax revenue, reduce consumer choice and all for the sake of protecting a regulatory system that for all intents and purposes is primarily responsible for enriching a small group of alcohol distributors and wholesalers who might not make a dollar or two on a wine shipped to a consumer from an out-of-state retailer.

It’s unlikely that the Michigan Attorney General’s office will actually do the sensible thing and start asking around to see if out-of-state retailer wine shipments are feasible; to see if other state’s standards for licensing retailers meet Michigan’s criteria. Michigan Attorney General Mike Cox was the man who, after the Granholm v. Heald Supreme Court decision in 2005, actually suggested, along with Nida Samona—the head of the Michigan Liquor Control Commission, that instead of passing a law allowing out of state wineries to ship into Michigan that instead the rights of Michigan wineries to ship wine to Michigan residents be revoked. That’s right. Their approach was to do what they could to destroy a growing wine industry in Michigan and rip consumers of the most basic right. Happily, they failed in this attempt.

And now it appears it will take hundreds of thousands of dollars of Michigan Tax Payers funds, the time and effort of Michigan staff attorneys and likely many months all to find out that they have again failed in their attempt to continue to offend Michigan tax payers and protect Michigan’s elected officials’ main source of campaign contributions: The Michigan wine and beer wholesalers.