Most people have never heard of Louisiana wine country. And if Gov. Kathleen Blanco signs House Bill 338 into law, the state's producers say, most probably never will.
In a strange sequence of under-the-radar amendments and 11th-hour scrambling last week, the Louisiana legislature passed a bill that would make it illegal for the state's six wineries to sell their products directly to retailers and restaurants, as they are currently permitted to do. Instead, they would be required to use a local distributor. The wineries and their elected representatives are now pushing Blanco to veto the bill.
House Bill 338--coauthored by Rep. Mike Powell (R), Sen. Walter Boasso (R) and Sen. Ben Nevers (D)--easily passed both chambers of the legislature because it was originally designed to prevent businesses located within 100 yards of a school, church or playground from obtaining a liquor license. But it also contained a last-minute amendment that would require alcohol distribution through wholesalers only. (The state currently permits limited direct shipping to consumers from both in- and out-of-state wineries, an issue that was not addressed in this bill.)
The Beer Industry League of Louisiana (BILL), the lobbying group that represents the state's wholesalers, confirmed that it pushed for the amendment, saying that it was trying to get the state laws to comply with the U.S. Supreme Court decision on wine shipping that was handed down last month. "That case said you can't treat the in-state boys differently from the out-of-state boys," said Charles Tapp, BILL's lobbyist. "I've talked to several of the wineries and said, 'Look, we had no choice, we have to abide by the Supreme Court decision, because if we don't, the large wineries will come in and sell straight to the retail outlets, or set up wholesale houses, which will bypass the three-tier system we've had for a long time.'"
Neither the legislature nor the wineries realized what was going on until a local reporter called a Louisiana winery for comments about Bill 338. The winery found the text of the bill online, then called Rep. Tom McVea (R), who has some of Louisiana's wineries in his district.
"'Caught off-guard' is an understatement," McVea admitted of the bill that he and the rest of the House passed without a single vote in opposition.
"This amendment was added, in essence, to regulate the shipments and sales of wines," McVea said. "It was a slick maneuver by the Beer Industry League, and I've got the fact sheet that the Beer Industry League sent to everybody. And what it says is basically if we don't pass this amendment, our wineries are going to be out of business."
But from the wineries' point of view, that amendment could put them out of business, said David Sloane, president of Wine America, a national association of wineries. "If you look at farm-winery laws, the vast majority of them allow local wineries to ship and allow them wholesaling rights. They do so because wholesalers have no incentive to serve these little wineries," he said. Only two of Louisiana's wineries even have tasting rooms, he added, which means the bill would restrict the other producers' ability to do business. "If they have no tasting room, they have no other outlet for their sales but self-distribution. If they lose that, they're finished."
Devin Barringer, winemaker at Feliciana Cellars in Jackson, La., which produces about 540 cases a year, was equally damning in his assessment of the bill. "To put it bluntly, in the long-term it would just bleed us dry," he said. "It takes away our ability to wholesale our own wines, and it would leave us with the ability to retail out of our tasting room, but at this time that makes up 35 percent or 40 percent of our total sales. We need to be able to market and promote and sell our wines, and have more intimate relationships with the people we're trying to wholesale to."
Sloane doesn't buy the wholesalers' argument. "The Supreme Court decision made no reference to self-distribution whatsoever," he contends. "It was strictly on the direct-shipment issue. For [BILL] to argue that it was somehow necessitated by that decision is a stretch."
Once the wineries realized what was happening, there were only a couple days left in the legislative session before the summer recess. With some last-minute deal-making, a provision that would have restored the right of wineries to self-distribute was added to House Bill 755, introduced by Rep. Carla Dartez (D) and Rep. Jack Smith (D). The bill, which was originally written so the state could set up a toll-free line for alcohol abuse, passed committee, but was then pulled back since it contained a provision that some legislators interpreted as allowing supermarkets and corner stores to sell frozen daiquiris. Smith called that conclusion "completely wrong--that's not what it did. But there was enough confusion in the House to where the bill got flicked back to conference and died," along with the amendment that would have restored the wineries' right to distribute their products.
The legislature has begun its summer break with Bill 338 on Gov. Blanco's desk. "We've been hitting her with every influential memo we can possibly get across her desk," Barringer said. Some legislators who voted for the bill are also bringing the issue to the governor's attention.
"I've been in contact with the governor's office asking her to veto the bill," said McVea. "We just don't want to jeopardize the future of our little native wineries." He also said that he's been having regular conversations with other representatives, the bill's author and Blanco's legal council. "As pro-economic-development as [Blanco] is, and she's done a tremendous job telling the world that Louisiana is open for business … it would be wise on her part to veto it."