Sunday, January 21, 2007

There's Hope for Virginia Wineries

Lawmakers say there is a chance shipping rights could return
BY GREG EDWARDS
TIMES-DISPATCH STAFF WRITER Jan 4, 2007

Lawmakers backing bills to restore self-distribution rights to Virginia wineries believe the legislation could succeed this year.

"The momentum we have been gathering is substantial," said Del. Christopher B. Saxman, R-Staunton.

Sen. John Watkins, R-Powhatan, the bill's other sponsor, said the measure would help keep small-businesspeople in business, promote tourism, preserve farms and maintain open land.

Virginia wineries lost their right to self-distribute after a federal judge ruled in 2005 that the practice unconstitutionally discriminated against out-of-state wineries. The General Assembly authorized self-distribution in 1980 to give the fledging wine industry a boost.

The proposed legislation would fix the constitutionality of state law by allowing both in- and out-of-state wineries to self-distribute up to 3,000 cases of wine annually in Virginia.

Watkins said he believes Virginians want lawmakers to support the state's wineries and vineyards.

Ann Heidig of the Lake Anna Winery and president of the Virginia Wineries Association said the Virginia Farm Bureau, the Virginia Agribusiness Council, the League of Conservation Voters, the Virginia Hospitality and Travel Association, Virginia Retail Merchants Association, the Virginia Association of Counties and many other groups and individuals support the legislation.

Winery owners and wine retailers, who appeared at a news conference in Richmond yesterday, described how the loss of self-distribution rights have hurt their businesses.

David King of the King Family Winery in Crozet said a wine bar featuring Virginia wine he had opened in Charlottesville lost its source of supply when wineries lost the right to self-distribute.

David Johnson of the Peaks of Otter Winery in Bedford County said he gave up on a planned expansion of his winery last year. "I'm sitting there with a building I really don't need," he said.

Without harming wine distributors, it is time to modernize Virginia's three-tiered alcohol marketing system, Watkins said. Since the 1930s, the manufacture, wholesale distribution and retail marketing of alcoholic beverages has been legally separated and regulated.

When Virginia wineries asked the General Assembly to restore self-distribution last year, lawmakers bowed to politically powerful wine distributors who vigorously opposed the proposal. Allowing out-of-state wineries to self-distribute would hurt their businesses, they said.

Walter Marston, a lobbyist for the distributors, said the wineries still have not shown a need for extending self-distribution to out-of-state wineries. The time has come for the wineries to adapt to the loss of self-distribution, he said.

Saxman, however, said the proposed legislation is a reasonable compromise.

Contact staff writer Greg Edwards at gedwards@timesdispatch.com or (804) 649-6390.