The New Illinois Wine Law

Today CLTV starting airing a new piece regarding the new Illinois wine bill that will go into effect on Sunday, June 1, 2008. It is a bill that the Illinois Winemakers' Alliance has been fighting and will continue to fight. WATCH THIS STORY UNFOLD .

The governor and many other individuals consider this bill to be beneficial to Illinois wine consumers and even market it as a great thing for the Illinois wineries. What has actually happened is that the three largest wineries, creating over 60% of the wine made in Illinois, have had their rights stripped from them. Before HB 0429 passed 2nd class wineries (wineries producing over 25,000 gallons of wine per year) in Illinois were able to sell 10,000 gallons of wine direct. With the new bill, 1st class wineries (wineries producing under 25,000 gallons of wine per year were given the ability to sell 5,000 gallons direct per year, while the large wineries were stripped of all direct shipping abilities.

What does this mean to the consumer? It means that if someone loves Cooper's Hawk, Galena Cellars or Lynfred wines and wants to buy them at a restaurant, they will be paying more. The reason? The second class wineries now must go through a distributor; tacking on dollars to the consumer. We find that to be discriminatory. We are living with liquor laws from the 1930's. Ridiculous.

Tom Wark, Executive Director of the SWRA, had a commentary in the Chicago Tribune the other day that truly sums it up. Bill Daley from the Tribune followed it up with a blog, too.

Want to know more! Let us know! Email us with your questions or post a comment.

1st Quarter Meeting Summary

Thanks to IWA members, our First Quarter 2008 General Membership Meeting was a great success. We have three great challenges ahead of us:

. to influence Illinois legislators to pass laws governing winemakers that protect our right to growand prosper while preserving reasonable access andcosts for consumers, and

. to introduce consumers to Illinois wines and wineries through various cooperative promotional programs, and

. to improve the quality and reputation of Illinois wines by establishing quality standards according tothe tenets of the Beverage Testing Institute (BTI).

The Second Quarter General Membership Meeting will beheld in May on a date and in a location to be determined. We will hear the reports of the Marketing and Legislative Action Committees and the BTI StudyTeam at that time.

Be Informed

The passing of House Bill 0429 in 2007 has left the Illinois Winemakers’ Alliance with a battle on their hands. Our battle will begin with first informing our consumers of what HB0429 will do. Here is the letter we will be sending out to our mailing lists:


Dear Illinois Wine Consumer,

I am writing to you in regards to current wine legislation that will affect Illinois wine consumers. Recently House Bill 0429 was signed by Governor Blagojevich and will become law July 1, 2008. The media has portrayed this bill as beneficial to all Illinois wine consumers and Illinois wineries, while it actually strips the rights of the consumer and stunts the growth of the Illinois wine industry.

We want to inform you of how the bill will affect you as a consumer:

HB0429 Ignores you, the Illinois wine consumer
HB0429 Strips your rights as Illinois citizens to buy wine from out-of-state retailers
HB0429 Increases the cost of wine to you, the consumer
HB0429 Stops the function of the free market
HB0429 Is an Illegal restraint of trade and commerce
HB0429 Prevents industry competition
HB0429 Limits fair access of Illinois wines to the retail market
HB0429 Creates an Imbalance of distribution among state wineries
.
While the private interest of the commercial entities in the industry is artificially protected from the challenges of dealing with the changes in the market place, there is no noticeable advancement of the public welfare.

We will be contacting Illinois Senators and Representatives to review the Illinois Alcoholic Beverage Laws and Regulations. The Federal Trade Commission, the federal agency in charge of consumer protection and anti-trust enforcement, will be looking into wine distribution in various states.

We urge you, the Illinois Wine Consumer, to contact your state representative and senator. Further information can be found at www.illinoiswinemakersalliance.com as well as links to contact your local and state representatives.

Should you have any questions or concerns please do not hesitate to contact us at 630.529.9463 or at wineinfo@lynfredwinery.com. In the meantime we, as Illinois Winemakers, will be planning our next move.

Sincerely,

Fred Koehler
President
IWA

Scott Lawlor
Vice President
IWA

Tom Stone
Executive Director
IWA

This letter will be followed by similar letters to our state representatives, senators and the members of the press. We urge you to share this letter with fellow wine lovers anyway you can, email, blog, anything! Help us fight the fight!

Some of our Favorite Bloggers

The IWA was basically founded during the legislation of HB0429 regarding wine shipment in Illinois. The governor's signing of the bill is a travesty to wine consumers, and to growing Illinois wineries, despite the various press articles mentioning it's positive effects.

IWA President / Founder, Fred Koehler (also President of Lynfred Winery) is currently creating a 10-point check list regarding the negatives on the bill which we will post later this week. In the meantime there are some outstanding and passionate authors, reporters and bloggers out there fighting the fight and sharing our plight. Here are some of our favorites:

Bill Daley, Food and Wine Writer for the Chicago Tribune. Mr. Daley eloquently and passionately shares his love of food and wine with his readers without bias. What do we mean by bias? For years there has been an idea that only good wines come from California. Years before that it was 'only good wines come from Europe'. Due to open-minded drinkers the general population has learned that great wines can be made anywhere and Mr. Daley is one of those writers we salute. You can read his articles every Wednesday in the Tribune's Good Eating section (<- link to the STEW) and in Sunday's Tribune as well. Be sure to check out his podcasts online.

Tom Wark, Executive Director of the Specialty Wine Retailers Association. Mr. Wark's media and PR expertise is second to none when it comes to wine. If you look up an article on HB0429 you will probably find a quote from him. His passion is seen in his statements but especially in his actions. When he heard about the bill's hearing in Springfield he called Lynfred Winery and said he would be there alongside Lynfred's Fred Koehler and Galena Cellars' Scott Lawlor; and he was. Tom's blog, Fermentation, is one of the most influential, informative and thought-provoking blogs out there.

Christine Blumer, a.k.a. the Wine Diva. Ms. Blumer's knowledge of wine is infectious and her blog fabulous. She shares the love of wine with everyone from novices to connoisseurs and reels in new wine drinkers daily. Her interviews on the Steve Cochran show are informative, down-to-earth and completely enjoyable. Thank you for keeping your readers informed!

Chuck Sudo, Food & Drink writer for the Chicagoist. Chuck Sudo has been following HB0429 like a bloodhound on a hunt. His articles have been precise and, it seems to me, up before anyone else has any of the legislation details. Another great writer to follow.

Know of any other outstanding bloggers featuring current state legislation? Let us know at wineinfo@lynfredwinery.com

IWA's Thoughts of Current Legislation

chicagotribune.com Editorial October 8, 2007

Corking the wine trade

When the Supreme Court struck down state laws barring individuals from buying wine directly from out-of-state wineries, one lawyer called it "the best day for wine lovers since the invention of the corkscrew."
The 2005 decision was a victory for consumers, an advance for open trade and a boon to vineyards with something special to sell. It turns out, though, that the celebrations may have been just a bit premature.
You see, one of the states that imposed limits on interstate wine sales was Illinois -- and it turns out some people here are not that keen on all-out, interstate competition. So they joined together to place new shackles on the wine trade. Last week, Gov. Rod Blagojevich signed a bill that limits significantly the freedom to buy and sell pinot noirs and chardonnays.
The bill allows all winemakers to ship directly to consumers who are of legal age. In the past, in-state vineyards could sell unlimited supplies to residents, but out-of-state competitors could ship no more than two cases per year to any one person. Now, the limit will be 12 cases, regardless of where the company is located.
That may not sound so bad, but there are worse provisions. Though they enjoy a new liberty to buy from out-of-state vineyards, Illinois oenophiles will no longer be able to order directly from out-of-state wine shops and other retail merchants -- something they have been doing for the last 16 years.
It looks as though about 500 California vineyards that are not officially registered as wineries won't be able to sell to individual buyers here either.
Meanwhile, Illinois' largest vineyards, unlike their smaller counterparts, won't be able to sell directly to stores and restaurants: They will have to go through wholesale distributors. That rule is bound to increase the price of a drink.
What gives? The governor's office proclaims that the bill "represents an agreement between Illinois wineries and liquor distributors." State Sen. Ira Silverstein (D-Chicago), a sponsor, boasted that it will "advance our growing wine industry."
Notice anything missing from those pronouncements? Only the needs of ordinary wine drinkers. The clear intent is to protect the profits of favored businesses -- and never mind if consumers, and the state's most successful wine producers, lose out.
Even some of the retailers who are being protected from out-of-state competition have spoken out against the new barriers, fearing they will provoke retaliation from other states.
"Bills like these are bad for consumers," Brian Rosen, the president and CEO of Chicago-based Sam's Wines & Spirits, told Crain's Chicago Business. "If every state's borders were open to wine sales, we could sell $50 million in wine a year outside Illinois."
For years, Illinois laws have interfered with the wine market in ways that do nothing to benefit the average tippler. It's time for the state to get out of the way and let buyers and sellers work out the arrangements that suit them best.

Copyright © 2007, Chicago Tribune
Illinois Winemaker’s Alliance Reply to be Posted in October 13, 2007 Tribune:

On behalf of Illinois winemakers, I would like to thank the Tribune editors for recognizing the untold story and inequities of the bill recently signed by Governor Blagojevich, limiting the direct shipment of wine by winemakers to consumers in Illinois. (“Corking the Wine Trade,” October 8, 2007)

What is lost here, in addition to the right of the consumer to purchase the wines of his choice and have them shipped direct to him, is the right most successful wineries in the state to provide a wanted and needed service to that consumer and to profit from that transaction, and the right of all Illinois winemakers to continue to grow without being penalized by a law that unreasonably limits their profit margins.

Under the terms of this bill, Illinois wineries that produce more than 25,000 gallons of wine must conduct all wine shipments through a distributor. What this means is that, not only can they not ship direct to their customers, but they are also restrained from shipping to their own satellite retail outlets. The result is an additional cost to the consumer of up to 20% on all wine purchases—a penalty to both producer and consumer that benefits only the middleman!

The Illinois Winemakers Alliance is a coalition of wineries whose legislative mission is to eliminate this penalty for the state’s most successful winemakers, for those winemakers who will soon achieve production levels that will earn this penalty for them, and for the Illinois wine consumer who bears the ultimate cost of this unfair legislation.

Governor Signs the Bill

Free the Grapes!: New Illinois Law to Expand Consumer Choice for Winery-to-Consumer Shipments from 5 to 50 States, But Corks Out-of-State Retailers

NAPA, Calif.--(BUSINESS WIRE)--Illinois Governor Rod Blagojevich yesterday signed House Bill 429 which goes into effect June 1, 2008. The new law dramatically expands consumer choice for winery-to-consumer purchases made by Illinois wine consumers. Under the new law, wineries in all 50 states may purchase a permit to ship. Under the old law, wineries in just five states, including Illinois, were allowed to direct ship to Illinois consumers. The trading network of states with so-called ‘reciprocal’ wine shipping arrangements has decreased from a dozen to just five: New Mexico, Wisconsin, Iowa, Oregon (changes to permit law in January 2008) and Illinois (changes to permit law in June 2008).

Next year, Illinois will join the majority of U.S. states (34) who have either replaced reciprocity language, or replaced an outright shipping ban, with the successful model direct shipping bill.

“The new law is a boon for winery-to-consumer shipments, and long overdue, but unfortunately it corks out-of-state retailers. An amendment, widely supported by Illinois consumers and Free the Grapes! would have allowed out-of-state retailers the same privileges as wineries. It was defeated by powerful Illinois retailers and wholesalers,” said Jeremy Benson, executive director, Free the Grapes!, a winery-consumer grassroots coalition.

Under the new law, wineries from every state will have the option of purchasing a permit from the Illinois Liquor Control Commission that allows them to ship up to 12 cases per individual per year, among other provisions.

Since the U.S. Supreme Court ruled on direct shipping in May 2005, winery-to-consumer shipping has become legal in 34 states, which collectively represent 78% of wine consumption in the U.S. Most states have successfully implemented the model direct shipping bill, which allows wineries to purchase a permit, pay taxes, mark boxes, and consent to the jurisdiction of the state, among other provisions. Free the Grapes! is a national consumer grassroots coalition of more than 300,000 members and supports legal, regulated direct-to-consumer wine shipments.

September is Illinois Wine Month

Illinois Wine Month events

BY SUZANNE BOYLE

News-Democrat

Forget the West Coast. September marks the third annual Illinois Wine Month, when wineries across the state go all-out to offer travelers festivals, tastings, grape stomps and the chance to meet with and learn from Illinois vintners.

Midwest wines may not have the same cache as the big vineyards of California, but Illinois isn't about to let that get in the way of a tourism concept that will draw visitors and their dollars to more than 60 wineries statewide -- more than half of which are located downstate.

"Over the past few years, wine tourism has become popular across the country, but travelers don't need to go to the coasts for an authentic wine country getaway," said Paul Renzaglia, president of The Illinois Grape Growers and Vintners Association "With new and bigger events across the state and more people visiting our wineries than ever before, this year's Illinois Wine Month is positioned to be our most successful yet."

Late August and September is the traditional grape harvesting season, when Illinois vintners begin the winemaking process. With the recent heatwave, winemakers already are picking grapes because the sugar is up in many varietals due to the hotter than usual temperatures.

Illinois Wine Month events include the following events in the Southern and Southwestern regions, which includes the metro-east. For more information about wine events in other parts of the state, visit www.illinoiswine.com:

Illinois Wine Festival, Aug. 25-26, 11 a.m. to 6 p.m.-- Hidden Lake Winery, Aviston. Kicking off Illinois Wine Month is the annual Illinois Wine Festival. The Heartland Rivers Wine Trail wineries will be exhibiting at this special festival, along with other Illinois wineries. Wine seminars, arts and crafts treasures, gourmet cuisine and music throughout the two days. For more information visit www.illinoiswinefestival.org.

Shawnee Hills Wine Festival, Sept. 1, 2 (noon-6 p.m.)-- Alto Vineyards, Alto Pass. Shawnee Hills Wine Festival: Join all nine wineries from the Shawnee Hills Wine Trail for a weekend-long celebration in the heart of Illinois Wine Country. The event will feature great wines, Cajun and Southern-style barbecue and the sounds of the blues. The $15 entrance fee includes a souvenir glass and $5 towards purchase of a bottle of wine at the festival. 893-4898, www.shawneewinetrail.com.

Vintage Illinois at Starved Rock 2007 September 15 (11 am-6 pm) & 16 (noon - 5 pm)
An Extraordinary Wine Tasting Event! Taste the wines of over 20 wineries at the beautiful Starved Rock Park. Tickets are $10 and additional $1 tasting tickets may be purchased. www.vintageillinois.com Call Starved Rock Lodge 1-800-868-7625 or Prairie State Winery 1-815-784-4540.

Grape Stomp, Sept. 15 (registration for stompers, 11 a.m.; stomping competition, 1 p.m.) -- Black Diamond Vineyards, Nashville. The third annual Grape Stomp will raise funds for the Illinois Brain Injury Association. The sounds of bluegrass will play as stompers compete for the most juice produced, best "stomping style," "I Love Lucy" look-a-like contest and the "Grand Stomp-Off." Tours of the winery are included in the admission. 336-5700,

www.blackdiamondvineyards.com

Art & Wine Festival, Sept. 15 (11 a.m.-7 p.m.) and Sept. 16 (noon-6 p.m.) -- Carlyle Lake Visitors Center, Carlyle. Festivalgoers will enjoy a wide variety of activities, with more than 50 local artisans, a world-renowned sand sculpture, varietals from up to 13 wineries, live music and gourmet food. 594-2484, www.carlyleartandwine.org.

Harvest Festival, Sept. 15 (11 a.m. - 6 p.m.) -- Ravissant Winery, Belleville. Harvest Festival. Celebrate the grape-harvesting season at the winery's largest annual event. Enjoy live entertainment, a grape-stomp competition and food. Free admission. 233-WINE, www.ravissantwinery.com

Heartland Rivers Wine Trail, Sept. 22-23 and Sept. 29-30 -- This is the trail's grand opening kickoff. Participating trail wineries will offer a variety of entertainment, culinary treats and tasting of fine wines in the relaxed country atmosphere of Southwest Illinois. For more information visit www.heartlandrivers.org or 234-9463.

Crab & BBQ Festival, Sept. 22 (2-7 p.m.) -- Alto Vineyards, Alto Pass. Alto's award-winning varietals are paired with delectable tastes of two-time world barbecue champion 17th Street Bar and Grill. Live Cajun music performed by Dennis Stroughmatt & Creole Stomp will keep the crowd dancing. A $3 admission fee includes wine samplings. Wine is sold by the glass for $5, with refills for $3. 893-4898, www.altovineyards.net

Lynfred Winery Oktoberfest, Pig Roast & Grape Stomp, Sept. 29 (3 p.m. – 9 p.m.) and Sept. 30 (noon – 7 p.m.) When the grapes begin to arrive at Lynfred and the crush begins we all know what’s right around the corner. . . Lynfred’s annual Oktoberfest! The celebration of Oktoberfest at Lynfred began over two decades ago and continues to be a festival that is remembered by all. Two days of German sing-a-longs, grape spitting, grape stomping, cork tossing and barrel races! Bring your friends, bring your family and bring your appetite! Free admission and entertainment. Tickets may be purchased for food and wine. www.lynfredwinery.com

Illinois Wine & Art Festival, Sept. 29 (11 a.m.-7 p.m.) and Sept. 30 (noon-6 p.m.), Southern Illinois Artisans Shop and Visitors Center at Rend Lake, Whittington. With presentations by more than 50 of Illinois' best-known artists, live musical entertainment, local food vendors and varietals from more than a dozen Illinois wineries. Free admission; open-tasting tickets for $10, which includes a complimentary festival glass. 629-2220, www.wineandartfestival.com

Never. Give. Up.

Many thanks to Chuck Sudo of the Chicagoist for keeping tabs on this legislation!


HB 429 Passes, Litigation Imminent

Yesterday the Illinois House approved legislation regarding how customers will be able to buy their wine. It's a story we've been keeping tabs on here at Chicagoist for a while.

Supporters of the bill champion HB 429 as a victory for Illinois consumers. They claim that the uniform 12-case limit shared by in- and out-of-state wineries, and the establishment of a permit system allowing smaller out-of-state wineries to sell their product directly to retailers, will broaden the variety of wine available to consumers. Opponents of the bill say that HB 429 is not necessary; since Illinois was already a state with "full reciprocity," arguing that consumers already had unfettered access to a wide array of wine through out-of-state retailers and wine clubs. Chicagoist received a press release from Specialty Wine Retailers Association Executive Director Tom Wark detailing this argument. You can read it here (Adobe PDF file).

Additionally, HB 429 saw substantial opposition from the state's two largest wineries, Lynfred Winery in Roselle and Galena Cellars Vineyard & Winery, who argue that they and similar sized wineries in Illinois will see a substantial drop in revenue from direct sales, by having to utilize a wholesaler to sell their wine, under the new measure. Neither of these points were reported in the AP wire story referenced by Crain's yesterday.

Indeed, it looks as though the state's wholesale distributors are the big winners in all this. They've been lobbying hard for this legislation for close to two years, putting substantial amounts of money into the campaign funds of many of the bill's sponsors. If anything, the bill ensures that wholesalers are the first in line and get to have the pick of the litter. Wark has previously promised that SWRA would take HB 429 to court if it passed, and an e-mail we received from Lynfred marketing director Christina Anderson-Heller indicated that neither they nor Galena have given up the fight.

We have to ask: the state legislature can't agree on a budget and state employees are days away from not being paid, yet this bill managed to pass. We're currently wondering where their priorities lie.

By Chuck Sudo

Not Saying Cheers.

Not all saying Cheers! to wine deal

Lynfred Winery, Galena Cellars oppose state plan

By John PattersonDaily Herald State Government Editor jopatterson@dailyherald.comPosted Wednesday, August 08, 2007
SPRINGFIELD – How wine is bought and sold in Illinois could change under a proposal lawmakers approved Tuesday and sent to Gov. Rod Blagojevich.

And while most Illinois wine makers appear to welcome the changes, some suburban wineries fear the changes could price them out of business.

The proposed law would limit to 12 cases a year the amount of wine someone could buy directly from a winery, whether the winery is in Illinois, California or anywhere else. The limit had been two cases per person per year.

And the law would prohibit wine purchases from out-of-state wine retailers, something critics said will restrict what wines Illinoisans have access to and likely result in higher prices.

Tom Wark, executive director of the California-based Specialty Wine Retailers Association, predicted the law will ultimately be declared unconstitutional and struck down.

The proposal is in response to a U.S. Supreme Court ruling that said states must treat out-of-state and in-state wineries the same.

The deal that cleared the Senate on Tuesday was viewed as preserving Illinois’ unique system of wine maker, distributor and retailer.

Some supporters said Illinois could ultimately see more wine business if out-of-state wine retailers decide to set up shop in Illinois to avoid the proposed law’s restrictions.

But some lawmakers said successful Illinois wineries would suffer as well and the new regulations would punish them for growing. As proposed, the largest Illinois wine producers would lose the ability to sell directly to restaurants and retailers and instead would have to enter into agreements with distributors.

Local wineries such as Galena Cellars in Geneva and Lynfred Winery in Roselle have said signing agreements with distributors could make their wines too expensive for the common connoisseur.

Distributors want a piece of the profit in exchange for carrying the relatively few bottles of wine small wineries create. That could ratchet wine prices up to $30 a bottle for companies like Galena Cellars and Lynfred Winery.

Both companies have about a year to strike a deal with a distributor to continue direct sales of their wines.

Fred Koehler, owner of Lynfred Winery, could not be reached for comment Tuesday, but he previously decried such severe direct shipping limits on his business as a possible kiss of death.

“It’d put us out of business,” Koehler said when such changes were first proposed in 2005. “That’s how serious it is. Why does the state want to put up more challenges for businesses when we’re an industry that’s trying to grow?”

Supporters said such provisions were necessary to show the proposed law didn’t unfairly target only out-of-state wineries.

There are nearly 70 wineries in Illinois. Most are represented by the Illinois Grape Growers and Vinters Association, which called the new law a victory for 95 percent of Illinois’ grape gurus.

David Stricklin, a consultant for the organization, said the vast majority of wineries in the state are much smaller than the Galena Cellars or Lynfred Winery operations. While those companies produce in excess of 85,000 gallons of wine a year, most other local growers fall below the 25,000-gallon mark.

That is now the threshold that triggers mandatory agreements with distributors to continue direct shipments of wine.

“This is a good bill for consumers, and will be a bill that furthers the dynamic growth in our industry,” Stricklin said. “For the bulk of wineries in Illinois, this is an extremely good result.”

Sadly It Effects the Growth

Unfortunately a battle has been lost that we have been fighting for quite some time now. The Illinois Wine Industry has grown from nothing to 70 wineries in the past 30 years and sadly a defeat upon its growth has occurred. We sincerely thank you for your letters to senators and all your efforts! Don’t worry, we’ll prevail!!!


State senate OKs wine sales proposal

By Kurt Ericksonkurt.erickson@lee.net

SPRINGFIELD -- The state Senate approved legislation Tuesday that would change how wine can be bought and sold in Illinois.

The measure, which was sent to the governor’s desk a 49-5 vote, would place a 12-case limit on how much wine a consumer can purchase directly from any winery. The current limit is two cases.

At the same time, it would bar consumers from buying wine directly from a wine distributor. Instead, they would have to buy the product from either a winery or a retailer.

The measure, in negotiations for more than two years, was triggered by a U.S. Supreme Court ruling that requires states to treat in-state and out-of-state wineries the same.

The legislation is viewed as positive for about 95 percent of the industry in Illinois, which is comprised of 70 mostly small wineries.

Alexa Tuntland, owner of the Waterman Winery and Vineyards in northern Illinois, said the legislation has been a ’’big concern’’ among her colleagues in the industry.

’’We don’t want to lose the ability to be able to distribute our wine,’’ said Tuntland.

"It’s a good deal for me," added Rick Mamoser, owner of Prairie State Winery in Genoa. "It helps the vast majority in our industry."

Under the proposal, a small winery will be limited to distributing 5,000 gallons directly to retail stores and restaurants.

’’It’s good for consumers, we believe,’’ said Robert Myers of the Associated Beer Distributors Association of Illinois.

But larger wineries say the measure could hurt their business because it forces them to use a distributor to sell their product.

Fred Koehler, president of Lynfred Winery in Roselle, said the legislation could cost his company $150,000 to $200,000 a year.

’’It just isn’t fair,’’ said Koehler.

Scott Lawler, president of Galena Cellars in northwest Illinois, said the legislation will hurt Illinois’ fledgling wine industry.

’’This is going to shut the door on what we’ve accomplished,’’ said Lawler, whose winery also is considered among the largest in Illinois.

The legislation is House Bill 429.



Always fighting the fight. . .



Christina Anderson-Heller, with the Illinois Winemakers’ Alliance