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Monday, 17 November 2008 20:00

downarrow.pngThat's the term folks involved in the wine shipping wars call what they're trying to do up in Lansing. And it's not a good thing for most Michigan consumers and retailers.

Judges nationwide got the message from the Supreme Court's 2005 Granholm decision: state laws that discriminate against out-of-state wineries or retailers don't pass muster under the Constitution's Commerce Clause.

So politicos in state legislatures had to make a choice. They could "level up" - that is, treat wine like other commodities in the 21st century economy, from autos to gun ammo, and expand their markets with appropriate licenses and regulations, while simultaneously letting Michigan's own businesses effectively expand to serve consumers, both locally and nationwide.

Or they could "level down" - take away the current rights of in-state retailers and consumers in order  to protect the state's powerful wholesaler distributors' cartel.

Given our state's economic track record in recent years, which direction do you guess they're taking up in Lansing? Hint: while Governor Granholm is in on an Israeli road trip, trying to import a few 21st century businesses and jobs to Michigan, her party colleagues back home in the state legislature are busy propping up Prohibition-era beverage laws guaranteed to further damage our precarious economy.

How? The prime example is Winebuys.com, an online seller of wine. It's a high-tech internet startup - something we talk a good game about wanting to promote in Michigan. Started last year by two Detroit-area businessmen who anted up $1 million of their own money, it's one small step along the road that might someday wean Michigan off our auto-dependence. They project $10 million in sales next year, and plan to hire a few more employees soon.

It's a gutsy move to start a new Michigan-based business in this economy. Most of their online competitors are located in places like California, a state that's long encouraged retail wine shipping and, as a result, already houses a profusion of young, growing businesses in the sector.

But if the level-down law before Michigan's state legislature passes, the entire legal basis for their business - selling and shipping wine to retail consumers nationwide - will be banned in Michigan. Like too many other businesses before them, the folks behind Winebuys will have two choices: go out of business or move to another state.

By the way, you may wonder where Winebuys gets all this wine it sells online. You guessed it: from the same Michigan wholesalers whose well-paid lobbyists are diligently working Lansing's backrooms at the moment, to pass the law that will put their customer out of business.

You'd swear these guys have been taking business development lessons from the automakers.

Bob Epstein, one of the lawyers behind the wine shipping court cases, told me he calls the wholesalers' push to level down "vindictive", an act of retribution for their losses in court. The phrase I prefer is "collective punishment".

Either way, leveling down presents a pure "cutting off your nose" scenario. In order to protect their own monopoly status, the wholesaler cartel is willing to damage the retail businesses they supply and their ultimate end-customers, millions of Michigan consumers.

Unfortunately for the rest of us, they've given our state politicos more than 700,000 reasons to see things their way.

And when our legislators get around to thanking the wholesalers for all that campaign cash, I hope they remember that they won't be able to pitch some business to their local Michigan wine store by phoning up and asking it to send over a bottle of Champagne.

You see, that's one of the things they're getting ready to ban if this bill passes.

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KIM'S SECRET STASH

Recently-deceased Korean dictator Kim Jong Il was a wine geek (and reputed alcoholic) with a 10,000-bottle cellar, according to ex-Slate wine columnist Mike Steinberger. Kim earlier gave up Hennessy Cognac on doctor's orders.