(Daily Montanan) A bill that was vetoed Monday by Gov. Greg Gianforte would have put new requirements on state wineries and would have grandfathered in existing ones.
House Bill 440 passed both the Montana House and Senate respectively with comfortable margins, 66-32 in the lower chamber and 30-20 in the upper. The bill would have required wineries to ferment at least 50 percent of the “fermentable agricultural products” at their winery location.
The law was seen as a way to ensure that wines that claim a Montana provenance are truly made in Montana. Some state producers viewed Montana-based sellers that outsource their fermentation to outside the state, but label wine as Montanan because the winery is located instate, as either misleading or a threat.
Calls to the Montana Grape and Winery Association went unanswered.
“This change in the law amounts to state government dictating winners and losers in what is otherwise a highly competitive market with robust consumer choice,” Gianforte said in a letter to lawmakers explaining his veto.
He said the law stops some from entering the market, while protecting businesses already established.
“This is an unjustified restraint of trade that disincentivizes businesses development and job creation,” Gianforte said.
Montana’s chief executive also pointed out that wineries in the state that already import wine fermented elsewhere and sell it as Montana wine would enjoy an unfair advantage.
“HB 440 grandfathers the licenses of wineries that import their product, with the anti-competitive effect of insulating those types of wineries from further competition,” Gianforte wrote. “While this may be unintentional, it is still counter to a free market where consumers are sovereign and determine winners and losers.”
Gianforte also pointed out a logistical concern with the bill: The state would have a hard time evaluating whether 50 percent of a winery’s production is actually happening on site.
“I am hesitant to sign legislation that the executive branch cannot reasonably enforce,” Gianforte wrote.
Legislative leaders from both houses have not said whether they anticipate a possible override of Gianforte’s veto.
Rep. Willis Curdy, D-Missoula, sponsored the bill. He did not respond to requests for comment from the Daily Montanan.