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Virginia wineries are still waiting
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Crecevcio Cervaytes picks grapes at Belle Mount Vineyards in Warsaw. The winery can't self-distribute their wines.
FILE/SUZANNE CARR ROSSI/THE FREE LANCE-STAR
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FILE/SUZANNE CARR ROSSI/THE FREE LANCE-STAR
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The General Assembly approved a nonprofit wholesaler for small Virginia wineries last March, but it still hasn't become a reality
BY CATHY JETT
Date published: 1/6/2008
BY CATHY JETT
Mitzi Batterson thought small Virginia wineries' distribution worries were over once the General Assembly passed emergency legislation last March.
The bill, submitted after the state's wineries lost the right to self-distribute, called for the formation of a private, nonprofit state wholesaler that would help them get up to 3,000 cases each to market annually.
"We thought that was a solution, but nothing tangible has happened," said Batterson, who manages James River Cellars in Ashland. "That was a huge hit, not to be able to distribute my wine in the last quarter of this year."
Virginia wineries stopped distributing their chardonays, cabernet francs and other wines after the U.S. Supreme Court ruled that state laws allowing in-state wineries, but not out-of-state businesses, to deliver products themselves was discriminatory. States had to level the playing field, and Virginia decided not to allow wineries to sell directly to stores or restaurants.
That hurt the many small wineries throughout the state that don't have enough wine to attract or afford a distributor, who typically marks up bottles 30 to 40 percent, or who were delivering small orders to retailers and restaurants.
Batterson, for example, used to deliver about six bottles at a time to a wine shop near James River Cellars that stayed open three hours after the winery closed. The arrangement was useful for customers who showed up too late to buy wine at James River.
The General Assembly's solution was to create the Virginia Winery Distribution Corporation, but no funding was available to get it rolling until July 1, when the current fiscal year began, said David King, who chairs the non-profit's five-member board and is an owner of King Family Vineyards in Crozet.
Since then, the VWDC has been incorporated, and its board has determined how the operation will work and purchased the necessary software. Now members are waiting for the U.S. Alcohol and Tobacco Tax and Trade Bureau to determine if it needs a federal license because it's a private non-profit or is exempt because it's a state agency.
"That's the million dollar question," said Terri Cofer Beirne, the board's lawyer. "We're a public instrumentality, but we have a charter from Virginia's State Corporation Commission as a private, nonprofit corporation. We're truly a unique animal, honestly."
Board members were so worried that they hadn't heard anything by their Dec. 13 meeting that Beirne went ahead and applied for a license in case it's needed.
"We have 56 wineries that have expressed an interest in being VWDC's customers," she said. "We just couldn't wait."
While the cost of the license is nominal, having to get one may mean that wineries will have to amend the floor plans they submitted for permits to show the spaces in their bonded warehouses that will be leased to VWDC.
"It's more of a paperwork hassle than anything," Beirne said.
Date published: 1/6/2008
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