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US: Judge rules against NY distribution controls

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A federal judge has ruled that it is unconstitutional for New York state to ban direct shipments to consumers from wineries outside the state while allowing New York's own wineries to ship direct.

US District Judge, Richard Berman, ruled that New York's legislation is discriminatory. He said he was persuaded by the plaintiffs' contention that the ban amounted to protectionism. Under New York state law, wineries from outside the state are compelled to deal through the customary wholesaler network and several wineries had protested that this was discriminatory.

The ruling is the latest in a series of judicial reviews of the issue of direct wine shipments to consumers. Last week, President Bush signed a law, which Californian wineries had been lobbying for, allowing wine purchased by visitors to wineries to be shipped directly to their homes, even if they live in states where direct shipments of alcohol are technically outlawed.

The New York ruling follows other decisions in Texas, Illinois, Virginia and North Carolina ruling against similar laws. However, in some other cases, courts have upheld the state controls.

Earlier this week, a Federal Appeals Court decision gave US wine producers another chance to challenge similar laws in Florida. The Federal Appeals Court ordered a Tampa judge to consider further evidence and make a second ruling on whether state rules are constitutional.

The New York ruling so far leaves unresolved the issue of whether out-of-state wineries would now be allowed to ship directly or that no companies at all, including those in New York, would be.

A ruling in the country's second largest wine-consuming state will be keenly viewed by interested parties such as the American Vintners Association which represents some 600 wineries. At present, 26 states restrict the direct sale of wine by producers to consumers.


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