Colorado’s wineries had reason to toast the U.S. Supreme Court on Monday after justices struck down laws barring interstate wine shipments in two states.
The ruling could lead to an increase in the amount of vino flowing across state lines from winemakers in Colorado and other states, said Bill Nelson, vice president of WineAmerica, a national trade association for wineries.
“Now they can build mailing lists and a list of loyal customers,” he said. “This is an incentive to have additional wineries.”
Stephen Smith, whose Grande River Vineyards in Palisade produces as many as 100,000 bottles of wine a year and ships less than 10 percent of that outside the state, said the ruling could eventually lead to a doubling of his shipments.
The high court’s 5-4 decision overturns laws in New York and Michigan, which supporters said protected local wineries and limited underage drinkers from purchasing wine without showing proof of age.
“Yahoo,” said Jackie Thompson, owner of Boulder Creek Winery. “Just last week in our tasting room we had two different parties from states you can’t ship to. They wracked their brains to find friends in another state that we can ship wine to, so they can drive there from home and pick them up.”
In all, 24 states have laws barring shipments into their states from outside wineries. (Colorado isn’t one of them.) The Supreme Court said states that ban or limit incoming wine shipments while allowing in-state wineries to ship within the state are discriminatory and anti-competitive.
Many of the states, including New York and Michigan, that limit incoming shipments will have to open their borders, Nelson said.
Not all states will be affected. Utah, for example, bans out-of-state shipments and also bars wine shipments to customers within its borders, so its regulations most likely won’t be considered anti-competitive, Nelson said.
Internet sales have sparked growth in the interstate wine industry, and the wine business is booming with an estimated $21.6 billion in sales. Tourists also are flocking to wineries in Colorado and elsewhere for tastings and tours.
Small wineries – those that produce on average about 4,000 cases a year – have quadrupled since 1980 and account for about three-quarters of the nation’s estimated 3,726 wineries, according to the U.S. Treasury.
The smaller wineries say they can’t compete with huge companies unless they can sell directly to customers over the Internet or by allowing visitors to their wineries to ship bottles home.
The original court case was filed by a Virginia winemaker.
The Associated Press contributed to this report.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
