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State's Winemakers at Odds With Beer Distributors ; Direct Delivery of Wine to Homes at Issue

Posted on: Tuesday, 31 January 2006, 18:00 CST

By ADRIANA COLINDRES and MOLLY PARKER STATE CAPITOL BUREAU

Different segments of Illinois' alcohol industry, enmeshed in a dispute over shipping wine to customers at home, are looking to the General Assembly to settle their spat.

The debate pits winemakers against the Associated Beer Distributors of Illinois.

The beer distributors support legislation that would allow limited shipping, but consumers would first have to make a face-to- face purchase with the winery before it could be delivered, thereby allowing a seller to check the buyer's identification.

The wine industry is adamantly opposed to the "in person" requirement and is pushing its own measure that would increase the number of cases that can be shipped per month and jump from two to 10 the number of tasting rooms a winery can have.

The wineries fear that any new restrictions will devastate a fledgling industry that is at a critical growing point. Largely in the last decade, 193 vineyards and 63 wineries have sprouted in Illinois, and all but a few dozen counties claim one. Aside from selling out of their stores, many wineries rely on direct shipment as part of their business.

The beer distributors, who serve as the pass-through between makers and sellers, say they are concerned that direct shipment of wine sales will one day open the market for other intoxicating beverages - beer and hard liquor - to be delivered to homes directly from manufacturers as well. That would remove an important regulatory step in the typical three-tier process for alcoholic sales, said Bill Olson, executive vice president of the Associated Beer Distributors of Illinois.

But the legislation favored by the beer distributors "could potentially put some of the wineries out of business," said Tim Collver, general manager of Collver Family Winery in Barry. "It would definitely cripple the industry."

Mark Lounsberry, owner and winemaker at Hill Prairie Winery in Oakford, said the beer distributors' bill would be bad for the wine industry "because it will prevent us from being able to move our product and grow."

"This is a classic David-and-_Goliath situation," Lounsberry added, citing the beer distributors' history of giving campaign contributions to lawmakers. During a period from 1993 to 2004, the lobbying group was the sixth-largest contributor to Illinois politicians, donating more than $3.7 million, according to the Illinois Campaign for Political Reform.

"We're a young industry. We don't have that kind of money," Lounsberry said. "The only weapon we have is to get the facts out there."

Olson, however, said the wine industry is portraying the issue inaccurately.

"The wineries just say, 'We're being attacked by the beer distributors for their economic interests, and woe is us,' when in fact they created a situation that they shouldn't have been doing - direct shipping," Olson said.

Olson said wineries inappropriately stretched the authority that state law gave them when they began developing catalogs and other marketing tools to bolster direct deliveries. Direct deliveries, especially to people who never stepped foot in an Illinois winery, don't do much to encourage tourism, he said.

"I'm getting rather frustrated that the perspective that everybody takes is we should continue to help little wineries make money, when that's not the state purpose," Olson said. "The state purpose was to generate tourists and help the economic viability of a whole region, not just the economic viability of a winery."

Bills backed by both sides advanced from a legislative committee recently, and lawmakers encouraged continued negotiations between the winemakers and beer distributors before taking any measure to the House floor for a vote. Similar bills are brewing in the Senate.

"I think there's an exaggeration on both ends of this," said Sen. Dale Risinger, a Peoria Republican with several wineries in his district. "It looks to me like you have two extreme bills, and I'm hoping that will bring them together, and we'll get a bill out of it that's a meeting-in-the-middle type of thing."

The battle over home delivery is not unique to Illinois. Similar debates are playing out in numerous states this spring in response to a May 2005 U.S. Supreme Court ruling that any state allowing for in-state direct shipping had to allow out-of-state wineries to do the same.

Source: State Journal Register

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