There has been legislation introduced into this year's General Assembly, designed to address the distribution of wine by in-state wineries; a subject thrown into some turmoil by last year's Supreme Court decision requiring that states not discriminate between in-state and out-of-state wineries. This bill addresses the ability to small wineries to self-distribute their wines, directly to retailers and restaurants, without having to go through a distributor.
Self-distribution seems to be a win-win for all interested parties: Wineries get to make sales to retailers and restaurants without having to yield a portion of the proceeds to distributors, retailers and restaurants get to deal with those who are most interested in selling them the wines, and distributors don't have to concern themselves with low-volume, low-profit wineries.
So this legislation would allow wineries "small enough" to qualify for the federal small winery tax credit (27 CFR 24.278) to self-distribute. Yes, it's an arbitrary cut-off, but at least it's not one easily changed by the Virginia ABC regulators. And yes, I believe that all current Virginia wineries fall under that limit. But my guess is that this set-up would pass muster as being constitutional on its face.
I've heard from two wineries, asking that I contact my state senator and delegate in support of this legislation. That's fine, and a reasonable request. What bothers me about the requests, though, is that they both stray into Parade of Horribles territory, suggesting that some/many/most Virginia wineries will go out of business without the ability to self-distribute, and that some/many/most Virginia wines won't be available at retailers and restaurants. Well, baloney. I suppose that might be true if the legislation didn't pass and these wineries did nothing to find distributors. But I think that if the legislation isn't enacted, those wineries would find it in their best interest to go together and create an independent distributor whose main purpose was to distribute Virginia wines, and I'm sure they'd find support from the retailers and restaurants who would otherwise not have wines available for the customers who want them. Market forces will find a solution to this dilemma, even if the legislature does not.
My other concern with the requests was that they both urged me to use their cut-and-paste form letter to send to my representatives, without even considering that I could write my own. Knowing that elected representatives ignore obvious form letters, I'd think that asking us to send our own notes of support would have been the better approach.
