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Minnesota Wineries Fight In-State Grape Mandate

Two farm wineries are challenging a Minnesota rule preventing them from using grapes, unfermented juices and honey from other states and countries, claiming such a severe restriction limits domestic and foreign commerce.

MINNEAPOLIS (CN) – Two farm wineries are challenging a Minnesota rule preventing them from using grapes, unfermented juices and honey from other states and countries, claiming such a severe restriction limits domestic and foreign commerce.

Minnesota requires farm wineries to produce their wine with a majority of raw materials that are grown or produced in the state, according to a lawsuit filed Tuesday in Minnesota federal court.

Alexis Bailly Vineyard and The Next Chapter Winery sued the Minnesota Department of Public Safety and its commissioner Mona Dohman, claiming the mandate prevents farm wineries from purchasing grapes, other fruit, unfermented juices, and honey from other states and regions of the world.

"The state's severe restriction on farm wineries' right to engage in commerce outside of Minnesota limits the varieties of wines that they can blend and offer to consumers, harming their businesses and hampering a market of locally produced wines that the public enjoys," the lawsuit states.

Alexis Bailly Vineyard operates in Hastings, Minn., and planted one of the first vineyards in Minnesota in 1973, according to the complaint. By 1978, Alexis Bailly says it released the first wines to be produced commercially with only Minnesota grapes.

According to the complaint, Nan Bailly, the vineyard’s owner, grows different varieties of grapes, including French and Northern-climate varieties. The vineyard says it blends these grapes with other grapes and juices from Minnesota and other states.

However, Bailly has been unable to grow enough grapes in her vineyard to comply with the state's mandate that a majority of the materials she uses to make her wine be grown in Minnesota, according to the lawsuit.

Bailly says she has been forced to purchase grapes from Minnesota grape growers and pays more for them than she has paid for out-of-state grapes.

Bailly had to seek an exemption from the state when she was unable to grow or purchase enough Minnesota grapes to satisfy the in-state mandate, the complaint states.

The vineyard owner says that after she obtained the temporary exemption, out-of-state juices from places like California improved the flavor of her wine. During that time, Bailly claims she blended and sold greater varieties of wines with interstate grapes and juices than she has sold while complying with Minnesota's mandate.

Next Chapter Winery claims it has also struggled to source its wine with a majority of Minnesota-grown grapes and juices.

The winery has been operating since 2014 in New Prague, Minn. The owners, Timothy and Therese Tulloch, say they blend their wine on-site and use old-world techniques such as barrel aging and grape stomping.

"Each year, they have experienced crop loss and have had to find and purchase Minnesota-grown grapes to try to comply with the in-state mandate. These grapes have been more expensive than the grapes that they have purchased from other states. These grapes are also Northern-climate grapes, which tend to produce an acidic wine that is not suitable for all of their winemaking purposes," the complaint states.

In 2014 and 2016, the Tullochs were forced to get one-year exemptions from the state due to significant crop loss from cold weather and the inability to purchase enough Minnesota-grown grapes to satisfy the mandate, according to the lawsuit.

Both years, Next Chapter says it sold greater varieties of wines than it sold under the mandate, just like Alexis Bailly.

The wineries say that the mandate is violating their clearly established rights to engage in interstate and foreign commerce.

"Defendant's enforcement of this mandate severely limits Next Chapter Winery's ability to access the raw materials it needs to blend and produce its wines. It also restricts the varieties and quality of wines it can offer to consumers,” the lawsuit states.

Next Chapter and Alexis Bailly seek an injunction allowing them to buy grapes and other raw materials for wine from outside Minnesota.

They are represented by Meagan Forbes with the Institute for Justice in Minneapolis.

A Department of Public Safety spokesman told local media that it doesn’t comment on pending litigation.

Categories / Business, Government, Law

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