BY CATHY JETT
Potomac Point Vineyard & Winery is about to follow the advice of an old Geico commercial.
It will "cut out the middleman" by dropping its distributor in favor of the Virginia Wineries Distribution Co. Inc., a private, nonprofit state wholesaler that begins operation today.
"That's why we're so excited about this," said Cindi Causey, co-owner of the new Stafford County operation. "It's a great opportunity for Virginia wineries."
Potomac Point is one of 70 wineries around the state that have signed up to use the VWDC as their distributor for a nominal $5 charge per transaction, regardless of whether it's for a single bottle or several cases.
"That's significantly less than the average wholesale fee, which is about 30 percent per case," said Terri Cofer Beirne, lawyer for the nonprofit's board.
Potomac Point plans to use the VWDC to get its award-winning Richland Reserve Viognier and other wines into local wine shops, then onto wine lists at area restaurants.
"Finally, a support mechanism from the state," said Causey. "It's very nice."
Virginia wineries lost the right to self-distribute nearly two years ago 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 didn't have enough wine to attract or afford a distributor, or who were delivering small orders themselves to retailers and restaurants.
The General Assembly's solution was to create the Virginia Winery Distribution Co., which will process paperwork, collect payments and remit taxes, while participating wineries perform marketing and delivery functions for up to 3,000 cases per winery.
But it took months for logistics to be worked out and state funding to become available. In the meantime, a few small distributors sprang up, including Barbara Carpenter's KBC Distributing Co. in Westmoreland County.
"I started it primarily for Ingleside [Vineyards in Oak Grove], because they took away our right to self-distribute," she said. "Then I thought, well, I can help some of these other wineries as well. Now I have four, including Ingleside."
Among the others is Hartwood Winery, which lost thousands of dollars in sales when owner John Livingston could no longer personally sell anywhere besides his tasting room off U.S. 17.
"[Carpenter] basically saved my skin because she didn't charge the normal wholesale prices," he said.
Livingston said he'll continue using her rather than switch to the VWDC, although he drives past one of the places where his wine is sold when he delivers the bottles to KBC Distributing.
"What I plan to do is study what they're doing," he said.
The loss of self-distribution also affected businesses that sell Virginia wines, such as the Made in Virginia Store on Caroline Street in downtown Fredericksburg.
"It made a huge impact on the availability of wines from small wineries for me," said owner Kathryne Mitchell.
Now she's hoping to start carrying chardonnays, cabernet francs and other wines from wineries that have signed up to use the VWDC, especially since the $5 fee per transaction is a cost she could probably absorb.
"It took them long enough," Mitchell said of those involved in organizing the nonprofit. "Unfortunately, somewhere along the line we've lost some customers who may not come back to a Virginia wine."
Cathy Jett: 540/374-5407
Email: cjett@freelancestar.com