Issue link: http://winesandvines.uberflip.com/i/658375
April 2016 WINES&VINES 67 PRACTICAL WINERY & VINEYARD BUSINESS Custom made - Handcrafted Barrels Your lender of choice for agricultural capital • Agricultural real estate lender for 98 years • Long-term fxed or adjustable rate mortgage fnancing • Real estate secured revolving line of credit • Competitive interest rates • Flexible terms and structuring www.metlife.com/ag Rates are attractive —contact us today. 559.435.0206 Agricultural Investments © 2015 METLIFE, INC. © '15 PNTS Celebrating Over 35 Years of Serving the Wine Industry Premium French, American & Eastern European Oak Barrels French Oak Alternatives Tel: (707) 257-3582 sales@bouchardcooperages.com www.bouchardcooperages.com cal analysis of Nielsen Scantrack data and an online survey of 401 wine consumers in Geor- gia and Florida. This was the first empirical study in the United States to focus on the im- pact of wine franchise laws on consumer choice and wine price. (See "The Impact of Wine Franchise Laws on Consumer Choice and Pric- ing: A Comparison Between Georgia (a Fran- chise Law State) and Florida (a Non-Franchise Law State)" in the International Journal of Wine Business Research issue 25, No. 2.) Franchise laws may negatively affect the ability of a wine industry to innovate its distri- bution and sales models. For example, when Tesla Motors, a leading manufacturer of high- end, cutting-edge electric cars adopted a di- rect-to-consumer sales model, auto dealers in a number of states complained that such a model circumvented state franchise laws that require automakers to sell through local, inde- pendent auto dealerships. In an April 2014 blog post, the Federal Trade Commission (FTC) called these laws "bad policy" and chastised auto dealers for attempting to thwart "new sources of competition." Summary Lawmakers and industry members should con- tinue to examine the impact of franchise laws in light of the current state of the wine indus- try—wherein there are a thriving number of small producers and an increasingly consoli- dated and powerful wholesale tier—and deter- mine if franchise laws serve any other purpose than to favor in-state wholesaler interests. As the FTC concluded in its Tesla post, "Regulators should differentiate between regu- lations that truly protect consumers and those that protect the regulated." Industry members should consider what potential actions they can take to rescind such nakedly protectionist laws. That may include lobbying for legislative change as well as potentially adopting a litiga- tion strategy to challenge franchise laws. John Trinidad works with the Wine Law, Alcohol Bever- age, Business, Geographical Indications and Intellectual Property groups at Dickenson Peatman & Fogarty in Napa, Calif. He advises wine industry clients on a broad range of issues and also serves as general counsel to the American Wine Consumers Coalition, an advocacy or- ganization seeking to protect consumer rights and lower barriers to wine access. He is a member of the Advisory Board of the Napa Valley Wine Library Association.