Court orders involving New Jersey-, Hawaii-based companies latest in effort to halt illegal shipments that threaten small businesses, jobs
LANSING – The Michigan Beer & Wine Wholesalers Association today applauded state Attorney General Dana Nessel and the Michigan Liquor Control Commission for two court victories in February against out-of-state companies found to illegally ship wine and spirits into Michigan.
The court orders against New Jersey-based M & M Wines and Hawaii-based Island Distillers Inc. are the latest in Nessel’s and the MLCC’s continued crackdown on illegal, out-of-state shippers of alcohol.
“These enforcement actions are just the latest examples of holding illegal out-of-state companies accountable for breaking our laws and jeopardizing Michigan small businesses, jobs and critical tax revenue in our communities,” said Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association. “We applaud Attorney General Nessel and the MLCC for continuing to support Michigan small businesses that follow our laws and contribute to the three-tier system that allows competition to flourish, giving consumers a wide range of choices and options.”
Illegal alcohol shipments are not tracked under Michigan rules and regulations, making it impossible to verify whether the out-of-state products are safe for consumers. The illegal shipments also avoid paying taxes, causing Michiganders to lose out on millions of dollars in tax revenue that fund police, fire services, schools and other vital services in our communities.
The Feb. 3 consent agreement in the U.S. District Court for the Western District of Michigan with New Jersey-based M & M Wines Corp. requires the company to pay a $9,500 fine and immediately cease illegally selling and shipping wine in Michigan. As part of the order, M & M Wines will also be required to add a disclaimer on any internet or other advertisement visible to Michigan consumers making clear their products are not available for purchase or shipment in Michigan. According to online records, M & M Wines is based in Clifton, New Jersey, and sells gift baskets that include wine, champagne, fruit, chocolates, truffles and cheese.
The Feb. 7 default judgment in the U.S. District Court for the Eastern District of Michigan against Island Distillers Inc. requires the Hawaii-based distiller to pay a state fine of $25,000 and halt illegal sales and shipments of their products into the state. The default judgment was issued after the company failed to respond to Nessel’s and the MLCC’s complaint.
Attorney General Nessel’s aggressive approach is leading across the nation, resulting in 19 lawsuits, multiple injunctions, and tens of thousands of dollars in fines. Under her leadership, and that of the MLCC, illegal shipments of wine into Michigan have dropped sharply since 2019 when a total 734,365 bottles of alcohol were shipped illegally into Michigan. These numbers dropped to roughly 107,000 bottles of wine illegally shipped into Michigan during the 1st quarter of 2022.
In one prominent case last year, the MLCC in coordination with Attorney General Nessel, issued a violation order against Wine.com, a large, out-of-state technology company that had illegally shipped wine into Michigan since at least 2015. The violation order required Wine.com to immediately cease all illegal direct shipments of alcohol to Michigan consumers. According to MLCC data, Wine.com was responsible for an estimated one-third of all direct shipping into the state without producing its own wine.
“Thanks to Attorney General Nessel and the MLCC, Michigan continues to prove itself a national leader when it comes to holding those who break our laws accountable,” Nevins said. “We cannot afford to rest on our laurels or let our guard down. We strongly encourage the attorney general and MLCC to remain laser-focused on illegal alcohol shippers that jeopardize our time-proven three-tier system, avoid paying taxes, and rob Michiganders blind of much-needed revenue to fund essential local services.”
The M & M Wines consent agreement can be viewed by clicking here. Attorney General Nessel’s announcement of the Island Distillers default judgment can be viewed by clicking here.