Saturday, November 25, 2006
Free Virginia grapes from distributors' grasp
Jim Vascik
Vascik is co-owner and winegrower at the Valhalla Vineyards in Roanoke.
I read with interest and incredulous amazement Robert A. Archer's missive (Oct. 23 commentary, "New rules shouldn't produce sour grapes").
Archer outlines the history of the Virginia wine industry over the past 30 years or so, and would have us believe that the rights provided to Virginia's wineries by the Farm Winery Act were unfair and protective. He is half correct.
The Virginia Farm Winery Act allowed Virginia wineries to produce wine and sell it directly to consumers and also directly to retail shops and restaurants. He is correct that out-of-state wineries and foreign wineries did not have those same rights.
The U.S. Supreme Court heard suits challenging states' rights to prohibit interstate sale and shipment of wine; one of those suits, by the way, came from a Virginia winery. The court ruled that such state prohibition was contrary to the Interstate Commerce Act.
One result of the Supreme Court decision was to require each state to comply with its ruling by opening their markets to all other states' wineries or prohibit any winery -- in their state or from another state -- from selling directly to retail stores or restaurants.
Earlier this year, the Virginia House of Delegates unanimously approved legislation that would have continued the right of Virginia wineries to sell directly to retail stores and restaurants while establishing the same right to out-of-state wineries. The Virginia wine industry wholeheartedly supported this legislation.
Unfortunately, the Virginia Senate declined to vote on or approve the same legislation. Instead of approving legislation that would have continued the long-established Virginia Farm Winery rights and opened new markets to out-of-state wineries, the door was slammed shut on all.
Now, Virginia wineries must sell their wine to a distributor, at a lower price than they could have sold the wine themselves. That same wine is then offered to retail shops and restaurants at a much higher price than those stores and restaurants were paying the wineries.
Who wins here? Not Virginia wineries that get a lower price for their products. Not the retail shops and restaurants that have to pay a higher price for the wine, and certainly not Virginia consumers who have to pay a significantly higher price for the same wine.
Only the distributors win by involving themselves in a system that did not want their help nor require it. We collect and pay taxes too.
Archer says that "this bill would have had devastating consequences for wine distributors and their nearly 3,500 employees." This is far from true.
The distributors were doing just fine without controlling the small- to medium-sized Virginia winery, or for that matter the small out-of-state winery.
Small out-of-state wineries have too little wine to try to sell in other states' retail stores to any significant degree. However, should a Virginia restaurant desire to offer its customers a fine wine from an out-of-state winery, where is the wrong in being able to buy that wine directly from that winery?
As to the ability of foreign wineries to sell and compete in Virginia, I say Virginia wineries first, wineries in the rest of the United States next, and be damned to any help to the foreigners.
Does Archer agree with Virginia manufacturing jobs moving to foreign countries? Does he agree with foreign products flooding our markets, putting American companies out of business and thus Virginians out of work?
Has he ever heard of price supports for American farm produce? American farmers, for decades, depended on such protectionist price supports to be able to keep their family businesses in business. Virginia wineries do not seek special treatment.
As an industry, we supported the bill that would have allowed all small wineries, in-state or out, access to Virginia markets. Not allowing Virginia wineries the ability to sell their wine by themselves, at a fair price, without inserting an expensive middleman distributor who has not shown interest in helping the small Virginia winery in the past, could potentially be devastating to dozens of small family-run Virginia wineries.
Roanokers, please call or visit your favorite Virginia winery in the next few weeks. Buy a case or two of Virginia wine for your holiday parties and gift giving. Call or write your Virginia legislators and tell them: Free Virginia grapes!





