U.S. Supreme Court Rules in Favor of Consumers: May Render Arizona Wine Distribution Regulations Unconstitutional

Posted on May 16, 2005 | Type: Press Release
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PHOENIX-In an important victory for consumers and free enterprise, the U.S. Supreme Court today struck down laws in New York and Michigan that make it a crime to buy wine directly from vineyards in other states, calling such laws discriminatory and anti-competitive. The decision may render similar Arizona laws unconstitutional.

Justice Anthony Kennedy wrote for the majority, "States have broad power to regulate liquor. This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers."

The Goldwater Institute filed an amicus curiae brief in the case with the Supreme Court last fall arguing that Arizona's system violates Commerce Clause prohibitions against restricting the flow of commerce between states and against preferential treatment of in-state industries. The Court's ruling could have implications for commerce among the states in a variety of industries, including real estate, pharmaceuticals, and automobile sales.

"Today is an important day for Arizona consumers and, indeed, consumers across the country," said Mark Brnovich, director of the Goldwater Institute Center for Constitutional Government. "The court took a significant step toward restoring the intent of the Constitution's interstate commerce clause, which prohibits states from imposing trade barriers in order to privilege certain groups over others."

The Goldwater Institute has actively opposed such restrictions on free trade and published two policy reports arguing that "eliminating Arizona's protectionist laws and allowing Arizona consumers to buy wine over the Internet will give Arizona consumers the same personal choice and freedom of commerce available in other states."

Arizona is one of two dozen states that prohibit direct shipment of out-of-state wine to consumers.  Although the number of wineries has grown dramatically over the past 30 years, specially-authorized wholesalers have dictated the availability of out-of-state wines to Arizona consumers.

The cases are Granholm v. Heald, 03-1116; Michigan Beer & Wine Wholesalers Association v. Heald, 03-1120; and Swedenburg v. Kelly, 03-1274.

U.S. Supreme Court Amicus Brief in Granholm v. Heald, Goldwater Institute, September 23, 2004.
Trading Grapes: The Case for Direct Wine Shipments in Arizona, Goldwater Institute Policy Report no. 184, November 18, 2003.
Stomping Grapes: How Arizona Tramples Consumer Choice in Wine, Goldwater Institute Policy Brief, September 22, 2004.

Mark Brnovich, Director, Goldwater Institute Center for Constitutional Government, (602) 462-5000, mbrnovich@goldwaterinstitute.org

Andrea Woodmansee, Director of Communications, Goldwater Institute, awood@goldwaterinstitute.org

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