Washington Wine Rules in Limbo

Governor suspends rulemaking for a year; Canada may liberalize interprovincial shipping

by Peter Mitham
Washington Governor Chris Gregoire
Washington Gov. Chris Gregoire imposed an executive order banning state agencies from changing their rules for the next year, hoping to ease administrative costs for struggling businesses including wineries.
Olympia, Wash.—Last month, Washington voters rejected two initiatives that would have deregulated the state’s liquor trade—including wine sales. Now, Gov. Chris Gregoire has rejected agency rulemaking across the board, via an executive order intended to create a stable environment for small businesses during tough economic times. The blanket suspension covers rules pertaining to wine sales.

Gregoire’s office issued a statement announcing the order Nov. 17. It directs state agencies to suspend development and the adoption of new rules except in cases of public health, safety and welfare, or where “the rule is required by federal or state law, required by a court order, or critically necessary to manage budget shortfalls, maintain fund solvency or for revenue generating activities.” The order suspends rulemaking through Dec. 31, 2011.

“The time and effort small business owners would put into meeting new requirements would be better spent in improving their bottom line and adding new employees. This action will also allow local governments to focus their limited resources on the most critical issues in their communities,” Gregoire stated.

The suspension eliminates a potential avenue for the Washington Wine Institute (WWI) to resolve issues impacting the state’s wine industry. Two rules in progress at the Washington State Liquor Control Board were tabled as a result of the executive order.

One was a request by wholesalers to allow split-case charges on wine orders. WWI was happy to put this request on the back burner and praised the executive order for providing, “some much-needed stability for wineries currently grasping to keep up with changing regulations.”

The second was WWI’s own examination of exactly which winery personnel require an agent’s license. The current interpretation of relevant legislation requires that all winery personnel who sell wine—except sole proprietors—must be licensed.

“One avenue for resolving it has been removed,” Jean Leonard, WWI’s executive director, told Wines & Vines. She added, “The Washington Wine Institute intends to continue to work on potential issues regarding the requirements for an agent’s license.” The executive order in Washington state will likely push some rulemaking issues onto the legislative agenda.

Canadian wine may flow between provinces
Alternative text
British Columbia Member of Parliament Ron Cannan won widespread backing for a motion to allow consumers to carry Canadian wines between provinces.
Meanwhile, north of the Canadian border, lawmaking affecting the liquor industry is picking up steam. An initiative spearheaded by Ron Cannan, who represents the Okanagan Valley constituency of Kelowna-Lake Country in Canada’s Parliament, last week introduced a motion that would permit free movement across provincial borders of wine for personal use. The proposal specifically names wine and states that wines so transported are “not for resale, further distribution, sale or for any use other than personal consumption.”

Cannan’s initiative, if successful, would trump various moves by Canada’s provincial liquor boards during the past two years to restrict interprovincial shipments and direct-to-consumer sales of wine by wineries (see “Canada Warns Inter-Province Shippers”).

Cannan’s initiative has the support of various wine industry groups, including the British Columbia Wine Institute and Canadian Vintners Association as well as the newly formed Association of Canadian Wine Consumers, led by Shirley-Ann George, formerly senior vice-president, policy, at the Canadian Chamber of Commerce (which also backs the initiative).
Posted on 12.05.2010 - 18:58:36 PST
Hopefuly the Canadian proposal is a precurser to an elimination of the duty for personal wine brought into Canada by tourists from the USA. Then we can all enjoy NAFTA.
niagara, NY USA