Small wineries concerned about CARE act

North Carolina's winemakers and merchants will have to change the way they do business for out-of-state customers if federal legislation becomes law.

The Comprehensive Alcohol Regulatory Effectiveness Act of 2010 would allow each state to control interstate distribution of alcohol.

Opponents say it essentially would overturn a 2005 Supreme Court decision prohibiting individual states from denying out-of-state wineries the ability to ship directly to customers.

Merchants and vineyard owners argue that state legislators would be swayed by distributors' lobbyists and would soon switch to laws requiring wineries and wine stores to go through a distributor to sell out of state. Such a move would hurt profits in an already-competitive industry, and could stunt the growth of the state's fledgling wine industry.

"We get a lot of out-of-state business," said Andy Zeman, whose family owns and operates the Benjamin Vineyards & Winery in Saxapahaw, just south of Graham. "Small wineries have a very small profit margin anyway. Many of them would just go out of business."

Proponents of the law argue that those fears are unfounded and that it will not have a negative impact on businesses.

"The CARE Act itself does not address direct shipping of wine or beer at any level," said John Glover, the North Carolina board member for the National Beer Wholesalers Association. "It would not pre-empt a state law that allows direct shipping."

The debate dates to 2005, when the Supreme Court ruled against a Michigan law that prevented out-of-state wineries from selling directly to Michigan residents while allowing in-state wineries to do so.

The court ruled that the law violated the U.S. Constitution, which says Congress should regulate interstate commerce.

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