On February 24, 2026, my co-counsel, Gillian Garrett and I filed suit against the State of California challenging laws that allow California wineries to sell directly to California retailers without using a wholesaler, while denying those same privileges to out-of-state wineries.

We believe California’s system violates the dormant Commerce Clause by granting in-state wineries a substantial competitive advantage over wineries located elsewhere in the United States.

Free access to markets and the elimination of unnecessary barriers to entry have been enormously beneficial to the wine industry. Since interstate winery shipping was recognized in Granholm v. Heald, the number of wineries in the United States has increased dramatically. Greater market access has helped fuel innovation, consumer choice, and economic growth throughout the industry.

Our lawsuit is rooted in the belief that open and competitive markets benefit both producers and consumers.

California status quo

Under California law, in-state wineries may sell directly to retailers without going through the wholesale tier. Out-of-state wineries, however, must use an in-state wholesaler before their products can reach retailers.

That distinction creates a major competitive disadvantage for wineries located outside California. Traditional wholesaler markups are often estimated at roughly 30%, meaning out-of-state wineries begin with significantly higher costs before competing against California producers selling directly into the same market.

For many wineries, particularly smaller producers, those added costs make meaningful competition nearly impossible.

In our case, despite receiving recognition from the San Francisco Chronicle and despite interest from a California retailer, no wholesaler agreed to carry our client’s wine. The economic reality is simple: wholesalers are often less willing to take on smaller out-of-state brands when California wineries can sell comparable products at lower prices through direct channels.

The result is reduced competition, fewer opportunities for American wineries, and less consumer choice.

The Cost & Consumer Conundrum

The wholesale tier will be on the opposite side of us fighting any laws that increase market access and provide greater access to consumers.  The wholesale tier does not seem to share our concern about unnecessary cost to wineries and greater consumer choice, but then again maybe they do. The Wine and Spirts Wholesalers of America (“WSWA”) put out a statement slamming the Trump Administration’s policy on imposing tariffs on foreign wines and spirits.

“WSWA is concerned about the impact of newly announced tariffs and their potential effects on American businesses, industry partners, and consumers. While our industry remains resilient, these trade policies create significant uncertainty in supply chains and pricing, affecting the entire beverage alcohol industry and the broader hospitality sector. Ultimately, consumers will bear the brunt of these changes, facing higher prices and reduced access to the diverse selection of products they expect.”

According to WSWA the tariffs would lead to consumers paying a higher price for products and reduced access to inventory. The statement on inventory alludes to the fact that a higher cost to access the America market maybe so high for small foreign brands that market access is not realistic.

And as we know product diversity is important to WSWA, “Distributors do more than move boxes—they build brands. Every day, their boots-on-the-ground sales teams support restaurants, bars, and retailers with education, local marketing, and real-time feedback. From big cities to small towns, they ensure every shelf is stocked with a diverse portfolio of products that meet regulatory standards and reach consumers safely and legally.”

We agree with WSWA that lower cost and eliminating barriers to entry and ensuring consumer choice through the diversity of products should be the goal of liquor industry advocates.

What we are wondering is why they are fighting for these goals for foreign wineries but not supporting American wineries in this same fight?

It is clear that WSWA took a strong stand against a policy, Trump tariffs, that makes foreign wine more expensive in America.

However, when it comes to lowering cost and breaking down barriers for access to markets for American wineries, WSWA leads the fight in opposition.

WSWA has fought every battle against DTC winery shipping from Granholm to any law which would allow out-of-state wineries to sell on the same terms as in-state wineries, even though this would result in greater access to markets for American wineries and greater consumer choice.

Our Motivation

The American wine industry needs a voice for the smallest and least powerful, which are the type of wineries that would most likely benefit from access to more markets. But our fight is not only focused on small wineries but all wineries in America.

WSWA attacking the Trump tariffs rings hollow when they try to impose a system that makes small American wineries go through unnecessary added cost to access a marketplace.  Like the foreign tariffs, which impose an additional cost on foreign wineries, the mandated wholesaler markup costs add an additional cost to the domestic American wineries.

Even when small wineries are willing to pay the cost, often times the wholesale network will not integrate these wineries into their product offerings. Like the foreign winery the additional cost does not make it feasible to sell the product through the distribution network.

Like WSWA we believe in the importance of not adding higher cost that leads to a less diverse wine portfolio.

But to WSWA this is not really about diverse product offerings and unnecessary costs that hurt producers, because if it was, they would be supporting small exceptions for wineries. This is really about getting everything to go through their system so they get the 30% markup.

Legislatively, through political muscle, wholesalers have passed strict distribution laws throughout the country, and in some states control the agency that administers the laws, such as in Virginia, which has led to more expensive products and less access to markets for small American wineries.

As these wineries face an unfair system and don’t have the resources to win the political battle at state capitols, we believe they need a voice and an advocate.

Our lawsuit aims to open up the largest consumer market in the United States for wineries. The U.S. wine industry is important to us and we want to see it grow.

It is important that wineries from Oregon and Washington are not put at a disadvantage and that wineries from places such as Missouri and Illinois can realistically sell into the California market.

Our goal is to achieve a free market for wineries and allow open and fair competition, which will result in reduced costs and greater consumer choice!