Dormant Commerce Clause--indeed!

The Specialty Wine Retailers Association (SWRA) is engaged in a battle with the Wine and Spirits Wholesalers of America (WSWA) and rightly so. SWRA is unhappy that WSWA enjoys such protections in states to preclude retailers from shipping wine to consumers who live in other states.

The problem with the battle is that WSWA, sadly, has the 21st Amendment to the U.S. Constitution on its side, at least that’s how the courts see it--all the way to the Supreme Court.

In 2005, when the Supremes issued a ruling that supposedly opened wine shipping across state lines, the ruling was so narrow that whether or not it benefits consumers remains an open debate. But then, neither the 21st Amendment nor individual state’s alcohol control boards are trying to benefit consumers.

The 21st Amendment is protecting state’s rights: in this case, the right to regulate what our still Calvinist culture believes is an evil. In turn, the state alcohol control boards are protecting their excise tax revenue—even though they may claim otherwise: the NY State alcohol control laws are supposedly in place to protect against organized crime.

Irony of irony: the money organized crime made during Prohibition is now being made by many state legislatures, and perhaps a few WSWA members just to keep everything in the family.

The proof that SWRA is engaged in a futile effort came with the Supreme Court 2005 decision. The decisions simply stated that States cannot block out of state commerce to protect in state commerce. That’s all it said.

The ruling said nothing about setting limits to how expensive or how cumbersome states can make the commerce. And, the ruling said nothing about licensing restrictions. Ever since the ruling, expensive and licensing restrictions have been the main weapons in those states that choose to circumvent unfettered commerce.

A few weeks ago, NY State’s 2nd Circuit Court of Appeal held that it is not unconstitutional for the state to block wine shipments from out-of-state retailers direct to consumers—and what was the reasoning of the court?

Judge Wesley referenced the Dormant Commerce Clause of the Constitution that bars states from blocking interstate commerce through protective measures.

According to Law.com, here’s what the judge said:

“The commerce clause normally prohibits states from passing laws that discriminate against out-of-state economic interests unless those laws ‘advance a legitimate local purpose that can not be adequately served by reasonable nondiscrimanatory alternatives.’

“However, the Supreme Court has made it clear that the 21st Amendment alters Dormant Commerce Clause analysis of state laws governing the importation of alcoholic beverages.”

The judge refers to precedent and he also refers to Justice Kennedy’s notes in the 2005 case where he explicitly stated that the narrow ruling would not have an effect on the states' right to restrict alcohol sales—Kennedy went on to reason his statement by making the Calvinist view concerning the special evil that alcohol represents.

In order for SWRA and for consumers to win this battle, it would take an amendment to the 21st Amendment to the Constitution. That would take an act of Congress, something I’m afraid is about as likely to happen in my lifetime as the possibility of real and valuable health care reform.

In fact, the alcohol and health care reform issues are related. In each case, lawmakers are beholden to an industry and in each case, lawmakers have told the citizenry to go fuck itself.

Law.com

Copyright Thomas Pellechia
July 2009. All rights reserved.

Don't touch that rule

A few days ago, wine writer Panos Kakaviatos wrote from Strasbourg, France a brief story for Meinninger’s Wine Business International that covered a problem in Alsace concerning two hundred or so Alsatian wine producers who attacked the region’s Alsace Viticultural Association (AVA) because they say the association wants to change the rules.

Remember that I wrote twice in the past few months concerning how I feel about the so-called appellation system in the United States that essentially tells consumers where grapes are grown and wine is made, and nothing much else?

This Alsatian story is about appellation rules, and it puts me in a quandary. I don’t know whether to be for or against the Alsatian authorities.

My dislike for the appellation system here at home is rooted in the fact that the system does not even try to understand and recognize whether or not certain grape varieties should be grown in certain places. Plus, the system is mute concerning how wine can be treated in order to preserve its expression of the appellation or American Viticultural Area (AVA)—the “terroir.”

Our system boils down to just another marketing scheme but with government providing cover. Not that the Europeans don't use their system in their marketing, but there is something behind the rules.

The other AVA, the one in Alsace, has put on the table a discussion of reforms that would change the way Alsatian grand cru wines are labeled. Right now, the majority of producers market their products as varietal wines. The changes may include a requirement to drop varietal labeling.

The grand cru system was developed in the late 1970s and early 1980s. Certain geological and climate conditions were considered and about 4% of Alsace’s vineyards were classified “Grand Cru” status. The grand cru system allows only four grape varieties: Riesling, Gewurztraminer, Pinot Gris, and Muscat.

Note: other grape varieties are used to make wine in Alsace, but they are not allowed in the grand cru wines.

Since the Alsatian system came so late in history, many Alsatians are unconvinced that it tells the world much about the appellation. A number of producers with vineyards located within grand cru boundaries choose not to apply the grand cru status to their label at all—not a bad reason for them to be concerned about a change that drops varietal labeling.

This is where my problem comes in: I like the way Alsatian wines are labeled. But if I am so set in the European style appellation system, why would I not like the Alsatians to go to a strictly “vineyard location name” system?

Because I’m used to the varietal labeling, and I do not know all of the 51 grand cru vineyards that would be involved in the reform. Plus, Alsatian grand cru wines are not known for their multi-blending the way in which most European appellation wines are handled. It's just that in Alsace, the wines are known by their grape varieties.

As for the possibility that the grand cru system may not really tell the consuming world much, the president of an AVA grand cru section is also a grand cru producer, Jean Michel Deiss. He does not use varietal labeling for his wines and of course, he is pushing for the change. Plus ça change, etc., Monsiour Deiss!

This issue leaves me a little queasy. Here I am hoisted on my own petard because I am either too lazy to study the 51 grand cru locations or too uninterested in change. At the least, I have a better feel for how hard it will be to do anything about the U.S. appellation system, despite that our varietal labeling is only a 75% solution, literally.

Still, it would be nice to have a U.S. system that makes, say, a vineyard-designated label, or the word “reserve” on the label an official guarantee of something instead of just marketing. But I'm open-minded now.

It's possible that we should do nothing and let marketing rule the world.

Panos' article

Copyright Thomas Pellechia
July 2009. All rights reserved.

Newspeak

What do the following two statements have in common?

“I don't consider MOx (micro-oxygenation) and RO (reverse osmosis) to be technologies, because I've worked with them long enough to understand their power and limitations for what I'm trying to do.”

“But I'm leery of anything with a power cord. Electricity gives us the power to do very foolish things.”

They were issued by the same person in the same interview. Whew!

Those answers were contained in a Wines and Vines Magazine interview with Clark Smith—see link below.

The answers are astonishing, especially since Mr. Smith used to own a company that sold technology services to winemakers. I’m sure the MOx and RO equipment he recommended came with an umbilical chord that dangled from each machine and that ended with three prongs.

Mr. Smith owns a winery and makes wine—I wonder if he closes his eyes and stands back when he plugs his equipment in.

Here's more:

“I de-alc (reduce the alcohol) my own wines if they need it.”

Two paragraphs later:

“My Faux Chablis has needed de-alc five years out of six, because we seldom have the rain they get in France to dilute sugar to a good balance.”

Surely, that Faux Chablis needs the de-alc, but I wonder if, perhaps, the grapes for that wine should be grown somewhere else, maybe in Chablis, where they get the rain that dilutes the wine to what we all like to drink—good balance.

It seems to me that what Smith is saying is that in the vineyard his grapes become so overripe that their astronomical sugars take them to astronomical—and out of balance—alcohol levels and so, he electronically and technologically reduces the alcohol so that the wine is balanced and drinkable. I mean, really.

The interview opened with Smith’s explanation why winemakers don’t tell the public that they de-alcoholize their wines (and still manage to produce 15 and 16 percenters in the end) and use other technologies with electric chords.

He admits that,

“…More than ever, consumers have become inspired to love wine as the "one pure thing" unaltered by 20th century fiddling. The lack of straight talk from winemakers has spawned a whole generation of Internet piranhas who make a living devouring ill-prepared winemakers, the poor saps.”

It sounds to me like Smith wants winemakers to shout about the technology even though consumers are wary of it.

Why would he want them to do that?

Because he’s probably the guy who sold the poor saps on the technology.

A deeper reading of the interview shows clearly that Smith wants things both ways. On second thought, his answers are often spectacularly disingenuous. But maybe I’m just too picky. I like hucksters at least to make some sense.

On the subject of hucksters, it seems appellationamerica.com is going to change its model once again—this time, it’s implementing a subscription fee to readers.

The site is dedicated to what its name implies—American appellations. The problem is that the operation has essentially been a kind of marketing arm for wineries within appellations, charging them to take part in the site. I don’t know how you can trust reviews and evaluations when the information is heavily marketing and promotion oriented. We’ll just have to see what shakes out from this subscription thing.

More important, the idea behind appellationamerica.com is to celebrate regional appellations as unique. I understand fully that different growing regions offer different growing conditions. Unfortunately, that’s about all the American appellation system tells consumers.

Under the system, you can grow any grapes that you want within any appellation, like the ones that Clark Smith uses to make his “Faux Chablis.” Plus, you can do to the wine anything that you want—technologically—like reduce the alcohol or perform ‘faux aging” through micro-oxygenation.

So where’s the regional uniqueness in an appellation?

Maybe I’ll subscribe to appellationamerica.com so that I can ask that question directly to one of its major contributors: Clark Smith.

Now ain’t that interesting?

The interview

appellationamerica

If you are reading this entry anywhere other than on the vinofictions blog, be aware that it has been lifted without my permission (and without recompense), and that’s a copyright infringement, no matter that the copyright information appears with it.

Copyright Thomas Pellechia
July 2009. All rights reserved.