Michigan: Granholm Applies to Retailers
In a landmark decision for out-of-state wine retailers, the U.S. District Court of Eastern Michigan ruled Granholm applies to retailers, effectively deciding the Commerce Clause trumps the 21st Amendment for retailers. Michigan is the second state after Texas that ruled Granholm applies to both retailers and wineries.
Recall this is the very state that introduced the Granholm vs. Heald Supreme Court decision in 2005 that went all the way to the Supreme Court and began a new era of direct wine shipping in the United States. As a result, Michigan residents can order shipments directly from in-state and out-of-state wineries.
As it has done in other states, Siesta Village Market (a Florida retailer) filed a lawsuit against the state of Michigan. In Siesta Village Market vs. Jennifer Granholm, District Judge Denise Page Hood ruled “...the statutes and regulations prohibiting out-of-state retailers from selling, delivering and shipping wine through interstate commerce directly to Michigan consumers is unconstitutional under the Commerce Clause.”
“...the State of Michigan and its officials are enjoined from prohibiting out-of-state wine retailers from selling, delivering and shipping wine through interstate commerce direct to consumers in Michigan.”
The judge said the state may continue to collect taxes, require licenses and permits for direct interstate sales and deliveries, as long as the provisions do not discriminate against out-of-state wine retailers.
Prior to the decision, Michigan retailers were able to ship wine directly to consumers once they were licensed as a “specially designated merchant” or “SDM.” Out-of-state retailers, however, were only allowed to ship direct if they first opened a brick and mortar business in Michigan and obtained an SDM license.
The judge found that these requirements are burdensome on out-of-state retailers because of the many costs associated with opening a new location in the state.
Judge Hood stated that “under a Commerce Clause analysis, the added burden of opening a new location in Michigan is differential and discriminatory treatment of out-of-state interests.”
The state argued that allowing out-of-state retailers to ship to consumers makes it more difficult to collect taxes and enforce wine labeling laws. However, the judge said the defendants made “no showing as to why this objective cannot be satisfied through nondiscriminatory means or how it manages to deter out-of-state wineries, who do not go through the ‘funnel’ of Michigan wholesalers, from evading taxes when they ship directly to Michigan consumers.”
With regards to concerns over underage drinking, the judge ruled: “There is no explanation offered as to why the same requirement of having an adult signature when ordering wine cannot be imposed on out-of-state retailers.”
In speaking with Tom Wark, the director of the Specialty Wine Retailers Association, earlier today, he pointed out that Michigan is right next door to Illinois, which recently passed a law that bars out-of-state retailers from shipping directly to consumers. In-state retailers, however, are allowed to ship to Illinois residents.
CRUZAN OFFICIALLY JOINS BEAM GLOBAL
Fortune and Pernod yesterday completed the early termination of the U.S. distribution joint-venture (Future Brands) and the swapping of Cruzan Rum. As a result, Fortune is establishing its own U.S. sales force.
Recall that Pernod paid Fortune $230 million in pre-tax proceeds to end the j-v four years early, effective today (October 1). It was originally slated to end in 2012.
Beginning today, Beam Global will integrate the joint venture sales force into its own operations, simplifying its route to market in the U.S. and providing greater control over its own sales and distribution in its largest market, said the company.
As a part of the deal, Pernod gave Fortune Cruzan Rum (the fastest growing rum in the U.S.) at the discounted price of $100 million. Rum is one of the fastest growing categories behind tequila and vodka.
CEO and now chairman Bruce Carbonari of Fortune Brands said Pernod’s payment “more than offsets the loss of the remaining cost synergies from the joint venture” and maintained the company is “being well compensated.”
Pernod has now assumed full responsibility of Absolut Vodka.
Commenting on the announcement, Paul Duffy, chairman and cep of Pernod Ricard USA, said: “Assuming complete responsibility for the leading premium vodka and imported spirit in the U.S. will make us an even more attractive partner to our customers, while also benefiting the rest of our premium portfolio.”
FORMER MOET HENNESSY VP TAKES THE LEAD AT HENRIOT INC.
Walter Sawitsky is taking over as chief executive officer at NY-based import company Henriot Inc., which specializes in ultra premium wine and champagne. Walter most recently retired as senior vp at Moët Hennessy, USA where he played a key role in its development and infrastructure. He will report directly to Stanislas Henriot.
Stanislas said the company continues to experience increased sales and distribution in the U.S. despite “these very difficult economic times.”
“At this critical point in our growth and through these challenging financial times, we believe Walter Sawitsky’s extensive experience in the industry will be an incredible asset to our company.”
Joseph Henriot serves as the company’s chairman with his son Stanislas serving as president.
BRONCO WINE EXPORTING TO CHINA
Legacy Imports has struck an alliance with the Bronco Wine Company to import several varietals of Bronco Winery's Hacienda Cellars Brand from Sonoma County into China. This includes Merlot, Cabernet Sauvignon, Chardonnay, Sauvignon Blanc, Riesling, Gewurztraminer, Viognier, White Zinfandel and Brut Sparkling Wine.
The company also reported that David Zhang has resigned as Chief Finance Officer and Director. Jaclyn Cruz, a current director, was appointed the new Chief Finance Officer, Secretary and Treasurer.
China is becoming increasingly important as an emerging market in the wine and spirits business. It is also slated to become on of the largest wine consumers and producers in the next ten years. We have a feeling we’ll be hearing a lot more about China in the future...
WSD BRIEFS:
RUSSIAN STANDARD VODKA has awarded its global creative account to My Agency. It reportedly beat agencies from France, Russia and the U.S. to win the business, and will now create a campaign that will include TV, cinema and print work. The first campaign will launch before the end of the year.
CALIFORNIA BECAME THE FIRST STATE to pass a law that requires chain restaurants to disclose nutrition information.
Until tomorrow, Megan
“The great tragedy of Science - the slaying of a beautiful hypothesis by an ugly fact.”
Thomas H. Huxley
--------- Sell Day Calendar ----------
Today's Sell Day: 1
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Recall this is the very state that introduced the Granholm vs. Heald Supreme Court decision in 2005 that went all the way to the Supreme Court and began a new era of direct wine shipping in the United States. As a result, Michigan residents can order shipments directly from in-state and out-of-state wineries.
As it has done in other states, Siesta Village Market (a Florida retailer) filed a lawsuit against the state of Michigan. In Siesta Village Market vs. Jennifer Granholm, District Judge Denise Page Hood ruled “...the statutes and regulations prohibiting out-of-state retailers from selling, delivering and shipping wine through interstate commerce directly to Michigan consumers is unconstitutional under the Commerce Clause.”
“...the State of Michigan and its officials are enjoined from prohibiting out-of-state wine retailers from selling, delivering and shipping wine through interstate commerce direct to consumers in Michigan.”
The judge said the state may continue to collect taxes, require licenses and permits for direct interstate sales and deliveries, as long as the provisions do not discriminate against out-of-state wine retailers.
Prior to the decision, Michigan retailers were able to ship wine directly to consumers once they were licensed as a “specially designated merchant” or “SDM.” Out-of-state retailers, however, were only allowed to ship direct if they first opened a brick and mortar business in Michigan and obtained an SDM license.
The judge found that these requirements are burdensome on out-of-state retailers because of the many costs associated with opening a new location in the state.
Judge Hood stated that “under a Commerce Clause analysis, the added burden of opening a new location in Michigan is differential and discriminatory treatment of out-of-state interests.”
The state argued that allowing out-of-state retailers to ship to consumers makes it more difficult to collect taxes and enforce wine labeling laws. However, the judge said the defendants made “no showing as to why this objective cannot be satisfied through nondiscriminatory means or how it manages to deter out-of-state wineries, who do not go through the ‘funnel’ of Michigan wholesalers, from evading taxes when they ship directly to Michigan consumers.”
With regards to concerns over underage drinking, the judge ruled: “There is no explanation offered as to why the same requirement of having an adult signature when ordering wine cannot be imposed on out-of-state retailers.”
In speaking with Tom Wark, the director of the Specialty Wine Retailers Association, earlier today, he pointed out that Michigan is right next door to Illinois, which recently passed a law that bars out-of-state retailers from shipping directly to consumers. In-state retailers, however, are allowed to ship to Illinois residents.
CRUZAN OFFICIALLY JOINS BEAM GLOBAL
Fortune and Pernod yesterday completed the early termination of the U.S. distribution joint-venture (Future Brands) and the swapping of Cruzan Rum. As a result, Fortune is establishing its own U.S. sales force.
Recall that Pernod paid Fortune $230 million in pre-tax proceeds to end the j-v four years early, effective today (October 1). It was originally slated to end in 2012.
Beginning today, Beam Global will integrate the joint venture sales force into its own operations, simplifying its route to market in the U.S. and providing greater control over its own sales and distribution in its largest market, said the company.
As a part of the deal, Pernod gave Fortune Cruzan Rum (the fastest growing rum in the U.S.) at the discounted price of $100 million. Rum is one of the fastest growing categories behind tequila and vodka.
CEO and now chairman Bruce Carbonari of Fortune Brands said Pernod’s payment “more than offsets the loss of the remaining cost synergies from the joint venture” and maintained the company is “being well compensated.”
Pernod has now assumed full responsibility of Absolut Vodka.
Commenting on the announcement, Paul Duffy, chairman and cep of Pernod Ricard USA, said: “Assuming complete responsibility for the leading premium vodka and imported spirit in the U.S. will make us an even more attractive partner to our customers, while also benefiting the rest of our premium portfolio.”
FORMER MOET HENNESSY VP TAKES THE LEAD AT HENRIOT INC.
Walter Sawitsky is taking over as chief executive officer at NY-based import company Henriot Inc., which specializes in ultra premium wine and champagne. Walter most recently retired as senior vp at Moët Hennessy, USA where he played a key role in its development and infrastructure. He will report directly to Stanislas Henriot.
Stanislas said the company continues to experience increased sales and distribution in the U.S. despite “these very difficult economic times.”
“At this critical point in our growth and through these challenging financial times, we believe Walter Sawitsky’s extensive experience in the industry will be an incredible asset to our company.”
Joseph Henriot serves as the company’s chairman with his son Stanislas serving as president.
BRONCO WINE EXPORTING TO CHINA
Legacy Imports has struck an alliance with the Bronco Wine Company to import several varietals of Bronco Winery's Hacienda Cellars Brand from Sonoma County into China. This includes Merlot, Cabernet Sauvignon, Chardonnay, Sauvignon Blanc, Riesling, Gewurztraminer, Viognier, White Zinfandel and Brut Sparkling Wine.
The company also reported that David Zhang has resigned as Chief Finance Officer and Director. Jaclyn Cruz, a current director, was appointed the new Chief Finance Officer, Secretary and Treasurer.
China is becoming increasingly important as an emerging market in the wine and spirits business. It is also slated to become on of the largest wine consumers and producers in the next ten years. We have a feeling we’ll be hearing a lot more about China in the future...
WSD BRIEFS:
RUSSIAN STANDARD VODKA has awarded its global creative account to My Agency. It reportedly beat agencies from France, Russia and the U.S. to win the business, and will now create a campaign that will include TV, cinema and print work. The first campaign will launch before the end of the year.
CALIFORNIA BECAME THE FIRST STATE to pass a law that requires chain restaurants to disclose nutrition information.
Until tomorrow, Megan
“The great tragedy of Science - the slaying of a beautiful hypothesis by an ugly fact.”
Thomas H. Huxley
--------- Sell Day Calendar ----------
Today's Sell Day: 1
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 2:07 PM
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