Tuesday, January 02, 2007

Could It Happen Here?

Tom is writing about and tracking developments in the wine world in Virginia. Why should you care?
What could a minor wine region's problems have to do with the enjoyment of BC wines?


First of all, Virginia is a lot like BC when it comes to wine. Huge growth over a short period of time, scads of tourists enjoying the vino vibe and lots of small, local wine makers with steady in-state fans.

The fracas in Virginia is about the rights to sell and distribute wine.
Unfortunately for the Virginia wine makers, it is now illegal to sell their wine directly to restaurants and retailers. They must use a wholesaler or distributor. There is a mark-up involved. Profits are being eroded and it looks like some wineries will have to close.

Here in BC, a winery can sell directly to restaurants. They still have to hand over a lot of coin to the government monopoly, but not as much as they would if they sold exclusively through the government stores.

In Virginia, a federal ruling said that forcing out of state wineries to use distributors while allowing state wineries to hand sell was unconstitutional. The solution? Either everybody uses distributors or nobody has to (unless they want to). At the urging (lobbying) of the distributors, the state legislators passed a law making winery to retailer direct sales illegal. So everybody has to use the three tier system (manufacturer, wholesaler, retailer).

I'm no expert, but the idea of paying another hand to do the job you were already doing sounds a little suspect.

It could happen here. The government already takes a big piece of the pie, but they want more. The opportunity to opt out of the BC Liquor Distribution system has been a natural for many small, family wineries. They don't need to have their wines scattered across the province being sold by less than enthusiastic employees. Sure, the BCLD branch had made some enlightening moves over the past decade (emphasis on wine knowledge, employee training, special promotion programs), but their prime mandate is the dispensing and metering of alcohol, a substance controlled by the government.

Given the chance, who would you want to sell your product? A passionate believer in your wine or a uniformed clerk who may or may not know a thing about the bottle in front of them?

It could happen here. A quick bit of legislation in Victoria and boom! All wines sold through Big Momma. Then they'd have their hands on all those wonderful medal winners that are garnering international acclaim.

At least until the wine maker says, "Frig it" and moves on to something that doesn't suck the life out his bank account.

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