Thursday, June 30, 2011

New Jersey Legislature Let's Direct Wine Shipping Bill Linger

Legislature fails to pass measure that would loosen restrictions on New Jersey's wine market

Posted: Thursday, June 30, 2011 12:00 am Updated: 6:18 am, Thu Jun 30, 2011.
By LEE PROCIDA Staff Writer

Press of Atlantic

The Legislature failed to pass a bill Wednesday that would have loosened restrictions on New Jersey’s wine market and possibly end a long legal battle before legislators recess for the summer.

The law, which would allow wineries to ship their products directly to consumers and allow out-of-state wineries to open retail outlets here, passed the Senate and went back to the Assembly, but was not put to a vote by the time the chamber ended its session late Wednesday night.

That leaves the state with laws governing wine sales that were deemed unconstitutional in December, and which wineries are anxious to get changed before a U.S. District Court judge takes action on the matter.

It also leaves 15 wineries unable to get licenses, since the state Division of Alcoholic Beverage Control will not issue new licenses until the state’s legal battle brought on by residents and out-of-state wine producers is settled.

“We’re sitting here with about 10,000 bottles of wine that we can’t sell,” said Art Reale, co-owner of Jessie Creek Winery in Cape May Court House, which is desperately awaiting a license after investing millions of dollars in an inn and vineyard.

The bill, sponsored by Assembly Majority Leader Joseph Cryan, D-Union, passed the Assembly in March but languished in the Senate until a substantial amendment of it passed late Monday night.

The law was made to exactly match that of another sponsored by Senate President Stephen Sweeney, D-Salem, Gloucester, Cumberland, adding an allowance for direct shipments and increasing the number of sales outlets that in-state and out-of-state wineries can open in New Jersey.

It passed the Senate by a 25-10 vote, surviving a motion by Sen. Christopher “Kip” Bateman, R-Somerset, Morris, that would have sent it back to commitee.
But the bill never made it to a vote in the Assembly, and it is unclear whether it would have anyway without further amendments.

That’s because the direct shipment aspect, added by the Senate, has been the most controversial element of the legislation since it was introduced at the beginning of the year, and was excluded from the original Assembly bill.

The powerful wholesale and retail liquor lobby has fought against it, saying it would result in lost warehouse and liquor-store jobs, and that the state has little ability to monitor whether wineries are paying taxes on shipments or checking whether recipients are of legal drinking age.
Meanwhile, the growing New Jersey wine industry is anxiously awaiting the Legislature to expand the market here, fearing that the U.S. District Court in Newark may instead further restrict the state’s laws and effectively close most of the vineyards.

The court is considering a case handed down from the U.S. Court of Appeals for the Third Circuit that said New Jersey needs to equally allow in-state and out-of-state wineries to ship to customers and open retail sales outlets.

Wine growers fear the judge could just as easily tighten the state’s laws, which would require all 39 New Jersey wineries to go through wholesale distributors — something most say they are too small to afford and would effectively put them out of business.

The parties involved in the legal fight have been scheduled to meet throughout July and August. So far, the Garden State Wine Growers Association has been excluded from the case, and after having its motion to intervene denied last week, filed for a rehearing Monday.
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