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University of Iowa News Release


April 8, 2009

Law school research suggests Iowa should update wine direct-shipping laws

Iowans should be allowed to have wine shipped directly to them from licensed vintners no matter where those wineries are located, according to a legal analysis by University of Iowa law student Jessica Reese.

In an article published in the most recent issue of The Iowa Law Review, Reese said portions of Iowa's wine distribution laws are likely unconstitutional in the wake of a 2005 decision by the U.S Supreme Court.

That decision -- Granholm v. Heald -- struck down laws in Michigan and New York that limited the ability of residents in those states to have wine shipped directly to them from out-of-state vintners. Since the laws allowed in-state vintners to ship directly to residents, the court ruled the law was an unconstitutional discrimination against out-of-state vintners.

Iowa's wine industry has grown significantly in the past decade. Reese points to statistics that show that between 1999 and 2006, the number of wineries in Iowa grew from 13 to 63, the number of vineyards from 15 to more than 325, and agricultural acreage dedicated to grapes as a crop from 63 to more than 650.

Reese said Iowa's wine distribution laws, parts of which date back to the repeal of Prohibition in 1933, have not been modified in light of the Supreme Court's Granholm decision. The laws set up a complex, three-tiered network of vintners/manufacturers, wholesalers and retailers that wine must pass through on its way to the consumer. In particular, the laws grant native Iowa wineries direct shipping access to Iowans while using an outmoded "reciprocity" system for non-native wineries.

Reese said that because the state laws place different conditions on in-state and out-of-state wineries, they likely run afoul of the court's decision.

"The most significant problem with Iowa's native-wine statute is that it gives native-wine manufactures direct-shipment access to Iowa consumers on terms that are unavailable to non-native-wine manufacturers," Reese, a third year law student, wrote in her article, "A post-Granholm Analysis of Iowa's Regulatory Framework for Wine Distribution."

She suggests that the legislature amend the state's wine laws and implement a new direct-shipment permit system. The proposed changes would continue to allow Iowa oenophiles the right to have wine shipped directly to them and would treat in-state and out-of-state wineries on equal terms.

STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500

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