Saving Virginia Wineries!
Yesterday I recieved an email from Mitzi at James River Winery asking for any and all help from Virginia Wine Lovers out there. This Thursday the 18th of January is SAVE VIRGINIA WINE LOBBY DAY. They will be meeting at 8:30 Thursday Morning at The Alliance Group’s Office (their PR firm) then walk over to the General Assembly Building. Recommending Parking will be the Bank of America parking garage or the Omni Hotel garage. She said that more information will be sent out Tuesday so I will update my blog then. Below is a letter from their PR firm detailing the issue and listing some ways you, the consumer can help
Also check out this link to First in Wine. It gives a great list of everything you can do to help VA wineries as well as information about everything you ever wanted to know about Self Distribution.
Save Virginia Wines
The Virginia wine industry is on the verge of a crisis. And we must act NOW to save it.
Saving Virginia wines doesn’t just mean saving wineries. It means saving the vineyard owners who produce the fruit. It means saving suppliers involved in the industry. And ultimately it means saving the entire Agri-Tourism business in the Commonwealth and all those who benefit from the visitation that the wine industry draws into Virginia. And to do this, two major areas need to be addressed — self distribution and land use restrictions —- both of which are critical to ultimate survival.
Changes effective July 1, 2006 made it illegal for Virginia wineries to sell directly to retailers and restaurants —
what we call self-distribution. Wineries and wholesalers are on the same side — after all, we’re both in the business of selling wine — but many wineries are at a disadvantage simply because of their size. They’re the small, family farms. They have neither the flexibility in revenue nor the quantity of product to make working with a wholesaler profitable — quite honestly for either side. Under the current scenario, both industries stand to lose.
If the cap for self-distribution were set at, say, 3000 cases, then it would be a win-win. The wineries would be able to get their product to market — and be able to sell it — at a reasonable price with a reasonable profit for them. And they could grow to a size where they would be profitable for a distributor. The distributors wouldn’t be burdened with trying to market small customers instead of the more profitable large scale producers. And the ultimate winners, of course, are the consumers and all those involved in the Agri-Tourism industry in Virginia. Consumers are seeing the effect of the elimination of self-distribution. There will continue to be fewer choices of Virginia wines on the shelves and what you do find will carry a higher price. It’s simple economics. If self-distribution were still an option, you’d find just the opposite — a greater variety of wines at a lower cost. Better for the winery, better for the wholesaler, better for the retailer, better for the consumer.
The other key area is related to restrictive land use issues. There are counties in Virginia that restrict the
number of customers that a winery may invite to their tasting room and in some localities it is impossible to have a tasting room at all. Every business must have customers. Why should wineries have a more restrictive business climate than other Virginia businesses? We need to ensure that county governments do not place undue restrictions on winery owners with respect to activities at their places of business. Government needs to work with wineries — in a partnership — in order to establish commonsense regulations that will allow the businesses to be good neighbors, while at the same time be able to draw enough visitors through special events to be profitable, and thus, successful contributors to the Commonwealth’s bottom line.
SAVE VIRGINIA WINES
Saving Virginia Wines involves a two-pronged approach. We need to work on the issue of self-distribution, as well as the issue of land use restrictions. Both are key to ultimate success in saving the industry.
In 1979, there were only 6 farm wineries in Virginia. In 1980, the Virginia General Assembly under the Farm Winery Act, exempted farm wineries from the three-tier system of alcohol distribution, meaning they did not have to sell through a wholesaler. They could self-distribute their product. Today, there are nearly 120 wineries across the Commonwealth. Coincidence? Or direct result?
In 2006, the General Assembly took away the wineries’ ability to self-distribute. The median sized winery in Virginia produces about 2,500 cases of wine per year. It is estimated that the impact on these family enterprises through the loss of self-distribution is as much as 30 to 40 percent lost sales annually. This could mean the end for many of the smaller, family-owned businesses, the lifeblood of commercial enterprise in Virginia.
Currently about 1/3 of Virginia wineries use wholesalers. But, without some form of self-distribution, many, if not most, of the smaller wineries will not be able to grow enough to attract a wholesaler to represent them. Again, that could spell the end for these small wineries.
Virginia wine isn’t just about enjoying the body and flavor of the fermented grapes. According to the Virginia Tourism Corporation, one out of every three out-of-state visitors to Virginia visits a Virginia winery. This has an impact on the entire Commonwealth — visitors spend money in hotels, restaurants, shops, etc. This benefits us all.
Support for self-distribution for both in-state and out-of-state wineries at a reasonable level — say 3,000 cases — makes sense.
Wineries also need our help with respect to land use restrictions. Government needs to work with wineries — in a partnership — in order to establish commonsense regulations that will allow the businesses to be good neighbors, while at the same time be able to draw enough visitors through special events to be profitable, and thus, successful contributors to the Commonwealth’s bottom line.
These efforts — working together — will enable us to Save Virginia Wines.
Save Virginia Wines
For more information, please contact:
Terri Cofer Beirne, Esq. Liz Bryant, PR & Media Relations Advisor
McCandlish Holton, PC The Alliance Group