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Ray Petrie, owner and winemaker of Belle Mount Vineyards
While visiting their son in Warsaw, Cheryl and Dean Hering of Kingman, Ariz., stopped at Belle Mount Vineyards to buy wine.
Crecevcio Cervaytes picks traminette grapes at Belle Mount Vineyards in Warsaw. The two-year-old winery sells its wines |
By CATHY JETT
ANN HEIDIG, president of the Virginia Wineries Association, was thrilled when a federal appeals court ruled yesterday that the state's ABC stores can once again limit their wine sales to Virginia-made products.
Many of the smaller farm wineries across the state suffered a double-whammy last year when a federal judge ruled it was unconstitutional for Virginia wineries to self-distribute and for the state's ABC stores to sell only Virginia wines. Afterward, the state-run liquor stores did not restock their shelves with wine.
"We thought if we could at least keep the ABC stores, that would provide some outlet other than tasting rooms and festivals for some of the wineries that are too small to attract a distributor," said Heidig, who co-founded Lake Anna Winery in Spotsylvania County. "You don't need a distributor to sell to ABC stores."
According to a survey the association conducted last year, the average production size at Virginia's 110 wineries is about 2,500 cases. They need to produce between 3,000 and 5,000 cases in order to attract the attention of most wholesalers and make using them feasible.
Smaller wineries such as James River Cellars in Glen Allen relied on ABC stores instead to make their wines available statewide. Sales there of its Chambourcin, Chardonel and other wines accounted for 20 percent of James River business until last year's ruling against self-distribution went into effect July 1 of this year.
"The loss of that [ABC selling only Virginia wines] was, for us, almost as devastating as the loss of self-distribution," said manager Mitzi Batterson.
She said the winery cut back on the amount of grapes it buys from other vineyards and re-evaluated its plans for growth.
The 4th Circuit Court of Appeals decision, however, means that customers who buy James River Cellars wines at its tasting room or such events as next month's Fredericksburg Wine Festival now will be able to pick up additional bottles later at their local ABC store.
"Virginia's ABC Board is not necessarily going to move or market our wines, but customers will know that if they go in, and can't find it, they can order it," Batterson said. "That's a huge issue for us."
Having Virginia wines in state-run liquor stores again also will help broaden their exposure and introduce customers to more of what the state has to offer, said Dr. Geoffrey Cooper, co-owner of Cooper Vineyards just south of Mineral.
"It will do great things if we can reach out through ABC stores again," he said.
Virginia's ABC Board also is pleased with the new rulings, which include upholding the state's right to control alcohol imports by consumers, said COO W. Curtis Coleburn.
The board will meet early next week to discuss the rulings, and Heidig said the Virginia Wineries Association plans to ask it to make the new requirements for Virginia wineries that want to sell their wines to ABC stores more flexible than the old ones.
"In many cases, our wineries were too small to be eligible to be in ABC stores," she said. "They used to want 40 cases of wine at a time. Some of the smaller wineries might not have 40 cases at a time, or that might be a substantial portion of their inventory."
The lawsuit challenging the ABC Act provisions was brought by five consumers, wineries in Texas, California and Oregon, and a wine and beer retailer in the District of Columbia. Yesterday's appeal was made by the state Attorney General's Office with the Virginia Wine Wholesalers Association as a friend of the court.
Wholesalers are happy with the court's most recent decisions because Virginia's ABC stores should be able to limit their wine sales to Virginia-made products just as a regular retailer might, said Bruce L. Davis, vice president of Freeman Beverage in Fredericksburg.
"It's also good for those small-farm wineries that have been somewhat resistant to changing their business model," he said. "Even though they are allowed to get their own distributorship license, few have done it."
Wholesale distributors such as Freeman also are happy with the ruling that upholds Virginia's right to limit the amount of booze consumers can bring into the state for their private use.
"All that is doing is reaffirming the 21st amendment, which allows the state to control the sale of alcohol in their borders," Davis said. "Otherwise, the state would lose out on tax revenues."
Yesterday's decision did not deal with the lower court's decision to strike down provisions favoring Virginia over other states in the distribution, delivery and shipping of wine and beer. The appeals court dismissed that portion of the state's appeal as moot because the General Assembly had amended the law to reflect that ruling.
The lower court's decision was a blow to small wineries such as Belle Mount Vineyards in Warsaw, which did about a fourth of its business by supplying the nearby Essex Inn and Northern Neck Gourmet Shop with its Workboat Red and Lighthouse Rouge, according to co-owner Catherine Petrie.
"Clearly we're close enough so they can send their people here to buy our wine, but that impacts their business, too," she said.
The Virginia Wineries Association is looking into a number of options to improve market access for its members, and its legislative committee will meet next week to decide on what action to take during next year's General Assembly session.
"We have materials in most of the winery tasting rooms to get lists of consumers that we can mobilize come January," Heidig said. "We're urging people to call their state senators and delegates."
To reach reporter CATHY JETT:
Email: cjett@freelancestar.com
| 'The loss of that [ABC selling only Virginia wines] was, for us, almost as devastating as the loss of self-distribution.' Mitzi Batterson, manager of James River Cellars in Glen Allen |
