Minnesota Farm Wineries challenge law to produce wine with locally grown fruit - Minnesota Uncorked™

Minnesota Farm Wineries challenge law to produce wine with locally grown fruit

It has been said that the best wines are produced as a result of climates where the grapevines suffer — but nobody implied it would be easy.

Read the full Minnesota Interstate Wine Complaint (PDF, 19p)

On March 28 Alexis Bailly Vineyards and Next Chapter Winery filed a lawsuit challenging the requirement to produce their wine with a majority of fruit grown in Minnesota. Among the reasons for filing, Nan Bailly of Alexis Bailly Vineyard stated in a video posted to the Facebook page for the representing law firm, The Institute of Justice, that the requirement not only stifles a winemaker’s creativity, but also that “in this most difficult climate to grow grapes, we have some of the most restrictive laws for wine making.”

An estimated 12 out of 50 wine-growing states have laws governing the use of locally grown fruit in wine, varying from from both less and more restrictive than Minnesota’s 51% rule.  Neighboring states Iowa and Wisconsin — who also grow many of the same varieties of grapes as Minnesota — have no requirement.

According to Minnesota Statute 340A.315, winemakers must produce their wines with 51% local fruit in order to receive tax benefits as “Minnesota Farm Wineries”, so long as they also produce less than 75,000 gal (370,000 bottles) of wine.

Minnesota winemakers are not limited to estate-grown grapes, and can purchase grapes from other growers, and even other states. Bailly is asking to limit the restriction on the percentage of locally grown fruit entirely, with no percentage restriction at all.

For a mere $500 one can apply for a Minnesota Wine Manufacturer’s License which allows total flexibility on the origin of the juice.  So, why not just register as a Wine Manufacturer, and forget this whole business about sour grapes?  Wine Manufacturers forego many benefits provided under the Farm Winery Act including some tax benefits and the ability to label the wine as “Minnesota”, provide free samples, sell wine at county or state fairs, and the ability to sell on Sundays (soon to be a moot point).

The alleged problem

In short, the lawsuit challenges that the restriction on a majority of local fruit handicaps a business’ ability to grow while falsely propping up the grape-growing industry in Minnesota.

According to a University of Minnesota Extension Report, Minnesota’s vineyards and wineries generated $80.3 million in 2015, compared to $53.6 million in 2011. During that same period the number of wineries in the state rose from 42 in 2011 to 52 in 2015, and sales rose from $311,000 in 2011 to $580,000 in 2015.

The Minnesota Farm Winery Association posted a statement on Facebook today clarifying that their association is not one of the suing parties, and that while they “respect the right of every business to pursue legal action on their own behalf, we want to clarify that the Minnesota Farm Winery Association is not a party in the suit challenging the 51% MN Grape requirement. We strongly believe a great wine region depends on the greatness of its grapes.”

We reached out to the Minnesota Grape Growers Association who declined to provide an official statement, but that “many of our members are personally against the lawsuit”, according to President Dave Mohn.

According to a press release posted by the Institute for Justice, “Minnesota is hurting farm wineries and wine drinkers to illegally prop up the grape industry”.  In the Institute for Justice’s Facebook video, attorney Megan Forbes alleges that “many do not know [that] our local wineries suffer under a serious restriction: Minnesota forces these wineries to make their wines with a majority of Minnesota grapes and other ingredients.”

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About The Author

Lauren Voigt

Lauren launched Minnesota Uncorked™ to encourage exploration of wine. When she's not masquerading as a wine writer on the internet, Lauren earns her keep as a marketing specialist in the wine industry. Lauren can be reached at lauren@mnuncorked.com. She is WSET Certified Level III (Distinction), a Certified Wine Professional (CWP) through Saint Paul College, and a Spanish Wine Scholar (SWS) through Vine Lab Wine & Spirts Academy.
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