Indiana wine retailer seeks to sell across state lines

An Indiana wine retailer hopes to overturn a Prohibition-era Illinois law and gain the right to sell and ship wines across state lines.

Lebamoff Enterprises will be allowed to reopen a 2016 lawsuit against Illinois after prevailing in the 7th U.S. Circuit Court of Appeals last month, the Chicago Tribune reported. The appellate move reversed a Chicago federal court's decision to dismiss the case last year.

Lebamoff owns 15 Cap n' Cork liquor stores in Indiana, mostly in the Fort Wayne area, and is seeking to sell to neighboring states through the internet.

The Illinois Liquor Control Act of 1934 requires alcohol that's shipped into the state to first go through a distributor and be sold by a retailer at a physical location in the state.

"The very notion in the modern economy of physical location and what it is to be a local business is changing," said Alex Tanford, an Indianapolis attorney representing Lebamoff. "No place is that more of a problem than the alcoholic beverage laws."

The Illinois attorney general's office, which is representing the state, declined to comment on the ruling.

Illinois has more than 100 distributor facilities, which collected more than $220 million in excise taxes in 2016, according to the Wine and Spirits Distributors of Illinois, a trade association and intervening defendant in the Lebamoff appeal.

Lebamoff is also pursuing a similar case in Michigan.

"It's costly to do what we're doing, obviously," Lebamoff co-owner Joe Doust said. "We've got big plans to open things up."

Lebamoff conducts about 10 percent of its sales online, most of which fulfill bulk orders for wine clubs in Indiana, Doust said. The company hopes that expanding sales beyond state lines will allow their wine offerings to increase from about 5,000 varieties to as many as 50,000, he said.

"If we could do it online and just display it, it makes it much easier," Doust said. "That's the Amazon concept—they're fulfilling as they get the orders."