NEWS- Grape compromise: Wineries eke out a distribution system

Like giant feet stomping on grapes, the wine wholesaler lobby soundly crushed last year's efforts by Virginia wineries to continue delivery of their own wine, and a bill that would have permitted small wineries to deliver didn't make it out of subcommittee in the General Assembly.

This year, the wineries returned, armed with sparkling new bills that would allow them to deliver their wine to restaurants and stores and skirt the "three-tier system" that positions a wholesaler between winery and retailer. But once again those bills seemed slated for defeat until a compromise emerged last week.

Bills carried by Senator Emmett Hanger, who represents a sliver of Albemarle, and Delegate Chris Saxman, whose 20th District includes part of Augusta, were seriously rewritten to appeases distributors and allow farm wineries the option to distribute wine through a new state-owned, nonprofit distributor.

Saxman and Hanger proposed a nonresident license for distribution of up to 3,000 cases a year, but that's where the powerful Virginia Wine Wholesalers Association balked.

The whole debate began after the Supreme Court declared Virginia's system of allowing only in-state wineries to self-distribute unconstitutional. The compromise takes advantage of another court ruling that allows Virginia ABC stores, because they're commercial entities, to discriminate against non-native wines and stock only Virginia wines.

The bills now propose that the Virginia Department of Agriculture and Consumer Services set up a nonprofit, state-owned wholesaling company that would allow farm wineries to distribute up to 3,000 cases a year while preventing out-of-state wineries from skipping the wholesalers.

The "virtual wholesaler" bills go to committees January 31, after the Hook goes to press. While even the Wine Wholesalers' Hot Line foresees no obstacle to passage, some small wineries are resigned to the fact there's no going back to the good ole days.

"What we wanted to do was say wineries can flat-out self distribute," says vintner Sarah Gorman. "That's not going to happen."

Gorman, one of the owners of Cardinal Point Winery in Afton, realizes that the days of tossing a few cases in the back of a pickup truck to refill a restaurant in downtown Charlottesville are over. She thinks the fear that a North Carolina or other winery would actually self-distribute this way has been vastly overblown.

"I don't think Ernest and Julio are going to set up in Virginia," she says.

While Gorman acknowledges that Ag Department wholesaling might improve the situation, since not all wholesalers will deal with the small quantities most area vineyards produce, she doubts the bill is a panacea. "I'm not really sure about the nuts and bolts of how this works," she says.

The wholesalers' lobbyist Charles Duvall did not immediately return the Hook's phone call, but Delegate Saxman says he's pleased that Virginia farm wineries now have a guarantee they can get their product to market. "Progress is progress," says Saxman, "and you never want to sniff at progress when you could be sniffing Virginia wines."

Delegate Chris Saxman, left, and Senator Emmett Hanger negotiated the compromise bills to keep wholesalers and wineries happy.
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