UPDATE ON SELF DISTRIBUTION IN VIRGINIA

Again this message is from our friend Roger at Hickory Hill Vineyards.

"In spite of all our effort and the public support it brought to the attention of the press and legislators, apparently no members of the ABC sub-committee changed their position and agreed to support Delegate Saxmans bill. Only Delegate Abbitt was on our side.
On Thursday VWA leadership worked with Saxman, ABC, VA Dept of Agri, and the wholesalers lobby to write a substitute bill (still HB-2450 as I understand) which authorizes VA Dept of Agri to set up a distributorship for wineries to distribute up to 3000 cases. This substitute bill was approved by the sub-committee and will go forward. The bill is apparently similiar to a proposal made by Senator Hanger last week. Details (cost, etc) are not yet worked out, but if approved by the legislature it could provide a method for small wineries to have access to the market. Whether this is a real solution remains to be seen.
You can read the substitute bill on line by going to the legislature site. Note that details would be worked out by a board that contains two winery representetives and that the distributorship will be operated as a non-profit agency."

This looks pretty good for Virginia's small wineries. Everyone keep you fingers crossed and hopefully this will work out the way we hope it does. Keep up the support and keep enjoying Virginias fine wine!

John

WINE LOBBY DAY 2

This is from Sasha Ward at the Virginia Wineries Association

January 23, 2007

"Dear Virginia Wineries and Allies:

First, thank you to all who participated in the Wine Lobby Day last Thursday. Legislators are hearing from you and we are letting them know about the seriousness of the issues that are before them during this session. Thank you for your part.

Second, we need more people this Thursday for both “walking” the halls and to be in the audience for the hearing on Self-Distribution in the ABC-subcommittee of the General Laws Committee. We will be meeting again at Liz Bryant’s (The Alliance Group) office at 8:30. If you can make it early that is great, but most importantly we need you to be at the General Assembly Building at 2pm for the beginning of the committee hearing.

Please RSVP to Willis Logan (wlogan@vawineclub.com) if you are able to attend. As always if there are other days that you will be attending please let him know as well.

Thank you again for your hard work."

UPDATE FROM VIRGINIA WINE LOBBY DAY

Message below from Roger at Hickory Hill Vineyards

"Thursday was Lobby day in Richmond and it was a great success. About 70 people were there and we contacted all of the legislators or their aides. Thanks to all of you who attended. Next Thursday Saxmans bill(HB-2450) will be addressed by the ABC sub-committee of the Laws committee and it is important that all who can be there attend.
We also need help other days next week (especially Tuesday)so let me if you are available.
Keep the pressure on with your e-mails to legislators. Believe me it is helping."

Thanks to all of those who are supporting Virginia Wines, through helping with legislative efforts or just drinking it!

John

!!UPDATE ON SAVE VIRGINIA WINERIES!!

Don't forget tomorrow is Lobby Day here in Richmond!!

Here is a link to a Volunteer Playbook, provided by Mitzi at James River Cellars.

Thanks to all of you who support the Virginia Wine Industry.

John

Saving Virginia Wineries!

Yesterday I recieved an email from Mitzi at James River Winery asking for any and all help from Virginia Wine Lovers out there. This Thursday the 18th of January is SAVE VIRGINIA WINE LOBBY DAY. They will be meeting at 8:30 Thursday Morning at The Alliance Group's Office (their PR firm) then walk over to the General Assembly Building. Recommending Parking will be the Bank of America parking garage or the Omni Hotel garage. She said that more information will be sent out Tuesday so I will update my blog then. Below is a letter from their PR firm detailing the issue and listing some ways you, the consumer can help

Also check out this link to First in Wine. It gives a great list of everything you can do to help VA wineries as well as information about everything you ever wanted to know about Self Distribution.

Save Virginia Wines

The Virginia wine industry is on the verge of a crisis. And we must act NOW to save it.

Saving Virginia wines doesn’t just mean saving wineries. It means saving the vineyard owners who produce the fruit. It means saving suppliers involved in the industry. And ultimately it means saving the entire Agri-Tourism business in the Commonwealth and all those who benefit from the visitation that the wine industry draws into Virginia. And to do this, two major areas need to be addressed --- self distribution and land use restrictions ---- both of which are critical to ultimate survival.

Changes effective July 1, 2006 made it illegal for Virginia wineries to sell directly to retailers and restaurants ---

what we call self-distribution. Wineries and wholesalers are on the same side --- after all, we’re both in the business of selling wine --- but many wineries are at a disadvantage simply because of their size. They’re the small, family farms. They have neither the flexibility in revenue nor the quantity of product to make working with a wholesaler profitable --- quite honestly for either side. Under the current scenario, both industries stand to lose.

If the cap for self-distribution were set at, say, 3000 cases, then it would be a win-win. The wineries would be able to get their product to market --- and be able to sell it --- at a reasonable price with a reasonable profit for them. And they could grow to a size where they would be profitable for a distributor. The distributors wouldn’t be burdened with trying to market small customers instead of the more profitable large scale producers. And the ultimate winners, of course, are the consumers and all those involved in the Agri-Tourism industry in Virginia. Consumers are seeing the effect of the elimination of self-distribution. There will continue to be fewer choices of Virginia wines on the shelves and what you do find will carry a higher price. It’s simple economics. If self-distribution were still an option, you’d find just the opposite --- a greater variety of wines at a lower cost. Better for the winery, better for the wholesaler, better for the retailer, better for the consumer.

The other key area is related to restrictive land use issues. There are counties in Virginia that restrict the

number of customers that a winery may invite to their tasting room and in some localities it is impossible to have a tasting room at all. Every business must have customers. Why should wineries have a more restrictive business climate than other Virginia businesses? We need to ensure that county governments do not place undue restrictions on winery owners with respect to activities at their places of business. Government needs to work with wineries --- in a partnership --- in order to establish commonsense regulations that will allow the businesses to be good neighbors, while at the same time be able to draw enough visitors through special events to be profitable, and thus, successful contributors to the Commonwealth’s bottom line.

SAVE VIRGINIA WINES

˜ Saving Virginia Wines involves a two-pronged approach. We need to work on the issue of self-distribution, as well as the issue of land use restrictions. Both are key to ultimate success in saving the industry.

˜ In 1979, there were only 6 farm wineries in Virginia. In 1980, the Virginia General Assembly under the Farm Winery Act, exempted farm wineries from the three-tier system of alcohol distribution, meaning they did not have to sell through a wholesaler. They could self-distribute their product. Today, there are nearly 120 wineries across the Commonwealth. Coincidence? Or direct result?

˜ In 2006, the General Assembly took away the wineries’ ability to self-distribute. The median sized winery in Virginia produces about 2,500 cases of wine per year. It is estimated that the impact on these family enterprises through the loss of self-distribution is as much as 30 to 40 percent lost sales annually. This could mean the end for many of the smaller, family-owned businesses, the lifeblood of commercial enterprise in Virginia.

˜ Currently about 1/3 of Virginia wineries use wholesalers. But, without some form of self-distribution, many, if not most, of the smaller wineries will not be able to grow enough to attract a wholesaler to represent them. Again, that could spell the end for these small wineries.

˜ Virginia wine isn’t just about enjoying the body and flavor of the fermented grapes. According to the Virginia Tourism Corporation, one out of every three out-of-state visitors to Virginia visits a Virginia winery. This has an impact on the entire Commonwealth --- visitors spend money in hotels, restaurants, shops, etc. This benefits us all.

˜ Support for self-distribution for both in-state and out-of-state wineries at a reasonable level --- say 3,000 cases --- makes sense.

˜ Wineries also need our help with respect to land use restrictions. Government needs to work with wineries --- in a partnership --- in order to establish commonsense regulations that will allow the businesses to be good neighbors, while at the same time be able to draw enough visitors through special events to be profitable, and thus, successful contributors to the Commonwealth’s bottom line.

˜ These efforts --- working together --- will enable us to Save Virginia Wines.

Save Virginia Wines

For more information, please contact:

Terri Cofer Beirne, Esq. Liz Bryant, PR & Media Relations Advisor

McCandlish Holton, PC The Alliance Group

804-775-7233 804-225-5829

tbeirne@lawmh.com liz@alliancegroupltd.com