South Carolina Adopts Fraud as a Business Model
Politicians searching for a way to jump-start South Carolina’s wine industry are considering allowing wine made from non-South Carolina grapes to be labeled as South Carolina wines. The reason for this is not so much a shortage of grapes as it is an inability to grow commercially familiar grapes in South Carolina’s hot, mildewy climate. As one winery operator said of the requirement to use local grapes:
It truly limits our market. What consumers want, South Carolina farmers can’t produce. And what South Carolina farmers can produce, consumers don’t want.
South Carolina’s legislators believe that allowing wineries to buy grapes from other places will spur the growth of the state’s wine country tourism, imagining that wine lovers flock to the state to watch crates of grapes being offloaded from trucks and freight trains.
UPDATE: In comments, Thomas Pellechia raises a knowledgeable point of regulatory order, to which I respond calmly, while resisting the strong temptation to use the word “insane” to describe the politics of South Carolina.
May 13th, 2011 at 8:31 AM
Tom,
A small fact may preclude “…wine made from non-South Carolina grapes to be labeled as South Carolina wines.”
State wine labeling rules cannot supersede the TTB federal rules. The labels must comply with the appellation percentage rules, and according to TTB rules, there is something called “grapes grown in contiguous states.”
Using that rule, every state in the union can use grapes from bordering states and then choose which state to identify on the label, based of course on the percentage of grapes from each state.
May 13th, 2011 at 10:22 AM
South Carolina’s legislature is dominated by people who believe that state law trumps federal law. As the wine would be sold only within the state, the thinking goes, the Commerce Clause under which the feds regulate wine labeling would not apply. This is a novel, pre-Civil War reading of the Constitution’s 10th Amendment and is almost sure to be struck down by the courts.
As an illustration, South Carolina is setting up a mechanism to produce and market conventional light bulbs within the state, thus sidestepping federal regulations that are pushing the market to energy saving bulbs.
So I’m sticking with my fraud claim, since South Carolina seems determined to remake itself into an outlaw state.
May 13th, 2011 at 10:33 AM
Tom,
You may be mistaken in your opinion of So. Carolina’s legislative process.
Under TTB regulations, if a wine is sold only within the state in which it is produced, many of the rules do not apply–one of them is how the appellation may read on the label. In fact, I believe that an appellation isn’t even required on the label for wines sold only within the state of production.
Look it up: http://www.ttb.gov/
May 13th, 2011 at 11:23 AM
Those would be the regulations that the South Carolina legislature doesn’t recognize as Constitutional, right?
May 14th, 2011 at 8:34 AM
“Those would be the regulations that the South Carolina legislature doesn’t recognize as Constitutional, right?”
That may be so, but to do what they propose to do about grapes from out of state is perfectly within regulations, as long as the wine is sold only within their state.
Has nothing to do with the Commerce Clause that governs interstate commerce.