January 2007 Official VA Wine Lover Newsletter

SAVE VIRGINIA WINES: RESTORING SELF-DISTRIBUTION RIGHTS TO WINERIES
Liz Bryant, Alliance Group - Liz@alliancegroup.com (www.AllianceGroupLtd.com)

Real Bryant

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. One of the major issues to be addressed is self-distribution, an issue 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, they�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.

Legislation in this year�s General Assembly would set a cap for self-distribution at 3,000 cases annually. This 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.

Self-distribution is simply the better way to go. Better for the winery, better for the wholesaler, better for the retailer, better for the consumer, better for the Commonwealth.

For more information, please visit the Virginia Wineries Association website at:
www.virginiawine s.org.