Minnesota winemakers find freedom as judge finds 51% rule unconstitutional

MINNEAPOLIS (FOX 9) - Minnesota winemakers are now free to make the wines they want after a federal judge found the state’s restrictive 51 percent rule to be unconstitutional.

In Minnesota, the law has required at least 51% of the overall production fruit used in local winemaking to come from within the state. Alexis Bailly Vineyard in Hastings and Next Chapter Winery in New Prague filed a federal lawsuit in 2017, arguing Minnesota’s law surrounding how they makes their wine is hurting business.

The 51% rule was put in place to protect the state’s grape industry from economic competition. But the law has prevented Minnesota wineries from building a portfolio rich with the popular varieties customers look for on menus, like pinot noir, pinot grigio, sauvignon blanc, cabernet sauvignon and chardonnay.

“This is a huge win for the future of the wine industry and small wineries in Minnesota,” Nan Bailly said in a statement through her attorney. We are finally free to make the wines we want to make, not the wine dictated by the state legislature.” 

The Minnesota Grape Growers Association disagreed with the winemakers’ challenge. Last year, the association told FOX 9 there are more than 90 wineries statewide and the vast majority are fine with the 51 percent rule. Plus, exceptions are very common.

“If that winery cannot meet that 51 percent, all they have to do is submit a letter to the commissioner,” said Jenny Ellenbecker, of the Minnesota Grape Growers Association. “I’ve never heard of anyone getting denied.”

But Bailly questioned why the law exists in the first place, saying it’s more expensive to buy in-state. Plus, Minnesota grapes that can survive the winter make them more acidic and must be balanced with fruit from warmer climates. She believes, just like breweries and distilleries, she should have the freedom to create a variety of wines without having to ask the state for permission.

“I want to make the best wine I possibly can, and I need all the tools available to me to do that,” Bailly added.

Monday, Judge Wilhelmina Wright cleared those barriers, declaring the Minnesota Farm Wineries Act unconstitutional as a violation of the Interstate Commerce Clause. Under the order, the state is barred from enforcing the act.

“In summary, a law is discriminatory on its face if it expressly imposes ‘differential treatment of in-state and out-of-state economic interest that benefits the former and burdens the latter,’” the judge wrote. “Here, the Act’s in-state requirement expressly favors and benefits in-state economic interests—namely, in-state growers and producers of winemaking ingredients as well as wineries that use mostly in-state ingredients—while disfavoring and burdening those same economic interests outside of Minnesota. Consequently, the Act’s in-state requirement is discriminatory on its face.”

Monday’s order is the first ruling to find a law like this unconstitutional. This could be a victory not just for Minnesota winemakers, but winemakers in other states like New York, Pennsylvania, Illinois with similar barriers.