Wine wholesalers could be bypassed under proposed bill

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Indiana-based farm wineries could sell their products directly to retailers and dealers instead of going through a third party under a bill debated Wednesday in the House Public Policy Committee.

House Bill 1387 would allow wineries to distribute up to 5,000 gallons of wine to grocery stores, restaurants, bars and other establishments.

The state passed the Farm Winery Act in 1971, which allowed wineries to sell on their premises and directly to retailers. But, in 2005, the U.S. Supreme Court ruled that states can’t let one group of wineries sell directly to retailers without letting all of them do so. So, the following year, the General Assembly created a micro wine wholesalers permit that made wineries have to go through a third party to sell their wine.

Now the committee would like to overturn the law, doing away with wholesalers.

The “micro wholesaler program in reality has proven to be ineffective for small wineries to use and very expensive to set up,” said the bill’s author, Rep Mark Messmer, R-Jasper.

“The 2006 changes were extremely adverse to the Indiana wine industry, and the General Assembly should adopt some degree of self- distribution for farm wineries by being sensitive to not negatively impacting the distributors of wine in the state,” Messmer said.

Lisa Hays, from the Governmental Affairs Counsel for Indiana Winery and Vineyard Association, argued that the 2006 bill did nothing to guarantee a wholesaler.

Marc Carmichael, from the Indiana Beverage Alliance, said wholesalers have an obligation to help wineries sell their product. It doesn’t matter if wholesalers lose money. He said he does not agree with the bill’s solution.

“This bill fills the economic gap. It affords the opportunity to small breweries to get the products to the people,” Hays said.

The committee decided not to vote on the bill Wednesday, citing a need for further discussion.

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