Wineries Seek Changes in Regulations They Say Are Crushing Industry
The California Department of Alcohol Beverage Control has agreed to change its policy regarding a particularly bureaucratic rule that was opposed by wineries.
This announcement may seem trivial, except that the change was made after a number of wineries testified at a public hearing of the Assembly Select Committee on California Wine Production and Economy in December. The hearing, called by Assemblyman Dominic L. Cortese (D-San Jose), was aimed at solving some of the industry’s problems.
Representatives of various elements of the industry showed up to seek changes in ABC regulations, and Manny Espinoza, deputy director of the ABC, heard the requests. Within a few weeks his office announced a change in the reporting process for wineries participating in fund-raising wine tastings, reducing the paper work that had been required.
Many of those presenting testimony at the hearing complained about restrictions that they said handcuffed them in their marketing of wines without apparent purpose.
William Kinzler, a San Francisco attorney specializing in wine law, said of the state’s restrictive laws, “If a foreign government were to enact the same restrictions on the marketing of California wine abroad as we now have in California, everyone in the room would be denouncing them as ‘trade barriers’ and yelling bloody murder. . . . Prohibition wasn’t repealed, it was just amended.”
Kinzler sought state legislation to correct a number of hazy issues, asking specifically for a resolution of the legal status of the wine broker, an independent sales agent. Kinzler said the wine broker was not recognized in its present sense by ABC and by not having a formal wine broker’s license, ABC encourages brokers to “come up with all kinds of legal fictions and ways to deal with (their problems).”
J. Patrick Dore and Mike Houlihan, wine marketers for their own brands of wines made under contract by wineries, complained that ABC law hampered them in their marketing. They said that as so-called “Type 17” licensees, they were restricted from doing business the way wineries do.
“I can’t understand these laws,” said Dore. “They are truly antiquated and a holdover from Prohibition.” He said that as a contractor for wine that he bottles and sells, he was restricted in how he can sell wine, and he asked for legislative relief.
Houlihan said, “Let’s have a new type of license for those people like us who are doing everything a winery does, but who don’t own a winery.”
San Francisco attorney John Hinman, who works primarily in wine industry law, added, “We need a level playing field” for the various layers of wine marketing.
Sara Schorske, whose consulting company helps wineries comply with regulations, added to the plea for a special license “for the small wholesaler who has wine custom crushed or blended and bottled under his own label.” She said the paper work on such businesses is needlessly burdensome and costly.
She also suggested that small wine suppliers have “the privilege of selling at retail by mail order, without having to obtain a separate retail license.”
The hearing, held in San Jose, was attended by a half dozen winery owners and another half dozen custom-crush brand owners. Many of the winery owners expressed dismay that the Wine Institute, the industry’s trade organization, did not attend the meeting.
Cortese said the hearing was the first of many he intended to hold on the subject.
“We have laid the groundwork here for potential legislation, and now there is tremendous documentation we have to do as we go forward,” said Cortese. He added that his assembly committee would work closely with a parallel committee set up by Sen. Alfred Alquist (D-San Jose) in the other house of the legislature to work on similar problems.
To implement some of the suggestions made by the industry, Cortese set up two subcommittees to work on the problems, the Industry Drafting Subcommittee and the Industry Review Subcommittee. The drafting subcommittee has drafted two new ABC license categories, which should be submitted to the legislature before March 2, said G. M. Pucilowski, an aide to Cortese.
David Heitz, wine maker and production manager for Heitz Cellars in the Napa Valley, and Lester Hardy, wine maker at Cain Cellars, both have filed candidacy papers to run for seats on the St. Helena City Council.
Two seats on the council are on the April 10 election ballot.
Those hand-etched-and-painted wine bottles that have brought such ludicrously high bids at wine auctions in the last few years now may be bought at retail--direct from the artist.
Gaye Frisk, who etched and painted most of the special bottles, has opened a shop on Main Street in St. Helena to market wines from more than 80 Napa Valley wineries.
The special bottlings run between $5 and $500, and Frisk does custom work as well.
The Victorian mansion at St. Clement Vineyards, originally built 100 years ago, has been restored and redecorated and is now open to the public on an appointment-only basis. The facility, which has a tasting room, is located north of St. Helena in the Napa Valley.
Mirassou Vineyards in San Jose has opened a new sparkling wine facility in Los Gatos that once was the home of the Novitiate Winery.
The Novitiate Winery, established in 1854, was operated by the Jesuits of Sacred Heart Novitiate until 1985, when the order abandoned making wine.
The facility was vacant until late last year when Mirassou signed a long-term lease for the facility and converted it into a sparkling wine making plant, now called Mirassou Champagne Cellar.