Another interesting alcohol beverage and Commerce Clause case is making its way through federal district court, this time in the United States District Court, District of Minnesota and is worth reporting on.
Apparently, the State of Minnesota prohibits local vineyards from making wine unless 51% of the grapes used are grown in Minnesota (known as The Minnesota Farm Wineries Act). As reported, one of the Plaintiff’s in the case, Alexis Bailly Vineyard, Inc., which first planted grapes on Minnesota soil in 1973, lost approximately 80% of its crop due to the age of its vines. Desiring to continue its business operations by using out-of-state grapes, the winery challenged the law in federal court on Commerce Clause grounds.
Briefly, the court concluded that the law in question was discriminatory on its face and imposes differential treatment of in-state and out-of-state economic interests finding that the law clearly favored in-state economic interests. Further, the court found that the law was overtly discriminatory and as such was subject to strict scrutiny whereby by the “burden falls on the state to justify the statute based on local benefits and the unavailability of nondiscriminatory alternatives to preserve local interests.” The court concluded that the statute failed under this review and was a violation of the Commerce Clause and permanently enjoined the state from enforcing the Acts 51% requirement.
Versions of the Minnesota law are enforced in approximately 12 states. It is worth pointing out that the Florida Certified Farm Winery statute requires, among other things, that wineries produce or sell less than 250,000 gallons of wine annually of which 60 percent of the wine produced be made from state agricultural products.