NEW ARIZONA LAW TO BE CHALLENGED

In response to the Supreme Court decision last Spring (Granholm), several states have worked to change their laws to eliminate in-state versus out-of-state discrimination when it comes to direct shipping to consumers. To make their laws flush with Granholm, a few states changed their laws to include winery volume exemptions to ship direct, since most in-state wineries are smaller than the large California wineries. Arizona was one such state.

Although Arizona state legislators re-wrote their alcohol code to be flush with Granholm, the new code which takes effect later this month is going to be challenged in court almost immediately. Attorney James Tanford, the Indiana lawyer who goes around suing states on behalf of wineries, said Arizona's new measure is still discriminatory and he intends to challenge it.

The key provision of the law is that it allows any winery, in-state or out-of-state, that produces fewer than 20,000 gallons a year to ship directly to customers and retailers in Arizona. This law takes effect next week. Tanford says reducing the numbers of gallons from 75,000 to 20,000 and including out-of-state wineries doesn't change intent of the law. "Not by coincidence, every Arizona winery but one produces fewer than 20,000 gallons," Tanford said. He will ask U.S. District Court Judge Mary Murguia to look beyond the new statute's wording and examine its practical effects.