Press Release Archives
The American Vintners is Pleased to Provide Copies of Recent Releases on the following topics. For more information contact Simon Siegl, AVA President.
Ssiegl@americanwineries.org
800-879-4637
ext. 122
March 15, 1999: NEW BOARD MEMBERS ELECTED AT AVA ANNUAL MEETING
March 15, 1999: AVA SUPPORTS INCREASE FUNDING FOR WINEGRAPE RESEARCH
March 15, 1999: CONGRESS SHOULD PROVIDE ADDITIONAL ESTATE TAX RELIEF
December 12, 1997: AVA RESPONDS TO MEDIA BLITZ BY AMERICANS FOR RESPONSIBLE ACCESS TO ALCOHOL (WHOLESALERS)
October 1, 1997: WINE INDUSTRY ASSOCIATIONS ADDRESS DIRECT SHIPMENT
September, 1997: AVA PROPOSES DIRECT ACCESS FOR WINE CONSUMERS
"NEW BOARD MEMBERS ELECTED AT AVA ANNUAL MEETING"
Washington, DC – The 550 winery members of the American Vintners Association elected four new members to the Board of Directors, and reelected four others to second terms at the 21st Annual Meeting of the national trade association of American wineries.
Board officers continuing for a second year in their positions include Jon Moramarco, AVA Chairman, who is President of Allied Domecq Wines, a California-based winery company which includes Atlas Peak, Calloway, Clos du Bois and William Hill Wineries.
Rob Deford, AVA Vice-Chairman, has been president of Maryland’s oldest winery, Boordy Vineyards, since 1980. New in the position of Secretary-Treasurer is David Braganini, President of St. Julian Wine Company, Michigan’s largest producer.
Newly elected to three-year terms on the Board of Directors are: Patrick Duffeler, of the Williamsburg Winery in Virginia; Eldon Nygaard, of Valiant Vineyards in South Dakota; Michaela Rodeno of St. Supéry Vineyards and Winery in California; and, Earl Samson, of Sakonnet Vineyards in Rhode Island. Incumbent members re-elected to three-year terms include: Ted Moulton, of Meier’s Wine Cellars in Ohio; Robert Russell, of Westport Rivers Vineyard and Winery in Massachusetts; Herb Schmidt, of Robert Mondavi Winery in California; and, James Trezise, of the New York Wine & Grape Foundation. A complete listing of the 25 AVA Board of Directors is appended to this release.
While gathered in the nation’s capitol for the meeting, vintners met with Members of Congress on federal issues of concern, such as improving market access for wines and increasing funding for grape and wine research. Keynote speaker for the group’s luncheon was Representative Mike Thompson (D-CA-1), a freshman representing California’s Napa and Sonoma valley wine regions. Thompson announced his joint effort with Rep. George Radanovich to form a Congressional Wine Caucus that will serve to educate members in both the House and Senate on wine issues.
The Association invited Members of Congress and their key staff to a reception featuring wines representing the full breadth of wine production in America.
AVA membership includes 550 wineries representing 43 states, making it the leading national wine trade association in America. The AVA mission is to enhance the public perception and business environment of American wine-growing through marketing, public information and grassroots government representation initiatives.
AVA SUPPORTS
INCREASE FUNDING FOR WINEGPAPE RESEARCH
To prosper in the face of strong international competition, the American wine and grape growing industry must lead in the production of wines with superior quality, excellence and value. Such a formidable task is extremely research intensive. To remain competitive with foreign producers, significant additional research investment must be made. Currently, our research investment and results are not keeping pace with our competitors.
AVA supports increased appropriations for viticultural research.
Background
Grapes are an expanding high value crop which requires a high intensity of research effort in order to meet the challenges of global competition. The U.S. grape crop, now grown in over 40 states, has more than doubled in the last decade from $1.35 billion in 1987 to $3.1 billion in 1997. The crop has increased almost ten fold in the last 28 years. Winegrapes have increased far faster than the overall grape crop and are up an astounding 23 fold over the period with a compound growth rate of almost 12% per year.
Grapes are now the highest value fruit crop in the nation and the sixth largest crop overall. Grapes processed in agricultural areas for wine and juice, greatly adding to the value of the product, now make up 67% of the entire national crop compared with about 30% in 1969.
Exports of American table grapes, grape juice products, raisins, and particularly wine have grown at a high rate in the last few years. In FY 1996 wine exports were up 21% and grape exports were up 41%. These two components ranked third and fourth respectively among the top horticultural exports. About a third of the raisin crop is exported.
Grapes are a high value crop which requires an intensive, stable and virtually year round work force. Most grapes are processed in family owned rural based wineries and juice plants where significant value is added. Grapes are often farmed on marginal soils and hillsides and use minimal water and chemical inputs. Even though California produces almost 90% of the nation’s grapes, grapes are now successfully grown in more than 40 states. Grape production in those states can be increased dramatically as local and international markets are expanding. Imports make up about 20% of the current market. Exports of wine and grapes are increasing dramatically and now exceed $600 million per year.
The CSREES Viticulture Consortium
AVA supports increased funding for the very successful Viticulture Consortium. Initiated in FY 1996, it currently receives a Cooperative State Research Education Extension Service (CSREES) special grant of $1,000,000. An increase to $1.5 million is proposed for FY 2000.
The four year old Viticulture consortium, administered by the University of California and Cornell University, has begun to address the unmet research needs important to our industry. The consortium is an active partnership of federal, state, and industry resources which enhances research coordination, collaboration, improves efficiency and eliminates duplication of effort. It has catalyzed and is bolstered by explicit matching funds from both industry and state sources which have increased dramatically in response to federal support. Research proposals have been received from nearly 20 states, including Pennsylvania, Missouri, Virginia, New York, Ohio, Michigan, Oregon, and Washington and are funded on a competitive basis. Research priorities are developed by a national network of key industry, research and extension representatives known as AVERN (American Viticulture and Enology Research Network).
Additional ARS Research Positions
ARS sponsored grape research has not kept pace with the needs of a research intensive, high value crop facing global competition based on product quality. Much of the research required is of a very long term nature, best accomplished by the ARS. New ARS long term research positions are vitally needed to address sustainable vineyards practices (Davis, California) and vine cold hardiness (Geneva, New York). These positions require $300,000 each.
The American Viticulture and Enology Research Network (AVERN)
The USDA and the U.S. grape and wine producing industries have developed a national partnership, the American Viticulture and Enology Research Network (AVERN). AVERN brings together state, university, federal, and industry resources to set national research priorities, maximize research resources, and provide for dissemination of results and information. The AVERN network is a national forum of successful partnerships developed between industry, research, and extension personnel. It helps provide the communication linkages between partners and develops priorities for national and regional research, in turn facilitating the augmentation of matching funds.
The American Vintners Association is the national trade association of American wine producers representing over 550 American wineries in 42 states. Questions should be directed to Bill Nelson, AVA Vice President, at (202) 783-2756 Extension 123.
CONGRESS
SHOULD PROVIDE ADDITIONAL ESTATE TAX RELIEF
Current estate (death) tax laws are extremely complicated and place in jeopardy many family owned vineyards and wineries by requiring huge cash payments when that business must be passed to the next generation. AVA seeks further improvement of the laws to facilitate opportunities for succeeding generations to preserve and grow the equity in these farms and family business.
Background
Vineyards and wineries are long term commitments requiring sustained reinvestment to develop adequate size and production for long term stability. The period required to accomplish this task usually spans more than one generation. Almost all new vineyard or winery developments are "start-ups" created by families or partnerships.
Current law often requires the payment of large amounts of taxes when a winery or vineyard is passed on to the next generation. These businesses take many years to develop, in most cases exceeding the working lifetime of one generation. Very serious liquidity problems, driven by estate or gift taxation, arise when the business must be passed to the next generation. The government requires cash payment to satisfy estate tax obligations while these businesses usually have all cash resources tied up in growing the business. Furthermore, banks are extremely reluctant to make loans to wineries secured by inventory, or to vineyards secured by vineyard development. These conditions jeopardize the very survival of many businesses our members have built, over many years, through toil and sweat equity.
AVA Position
Congress should make it easier for winery and vineyard owners to keep family ownership as generational turnover becomes necessary. AVA supports HR 8, the Death Tax Elimination Act sponsored by Representatives Jennifer Dunn (R-WA) and John Tanner (D-TN) which would eliminate the death tax by gradual rate reduction.
The American Vintners Association is the national trade association of American wine producers representing over 550 American wineries in 42 states. Questions should be directed to Bill Nelson, AVA Vice President, at (202) 783-2756 Extension 123.
AVA
RESPONDS TO MEDIA BLITZ BY AMERICANS FOR RESPONSIBLE ACCESS TO ALCOHOL
(WHOLESALERS)
The American Vintners Association (AVA) is the national association
of
American wineries representing over 530 wineries in 41 states. Many
of the issues raised by the topic of wine by mail order or wine on the
internet are subject to misstatement and distortion by parties who seek to
protect their businesses from ordinary and reasonable competition. From
the wine lover’s point of view, there should be a way to order and receive
a wine which may not be available at the local wine shop – just as they
have become accustomed to doing with thousands of other items of
merchandise. Wineries – especially smaller ones with less access to the
closed "three tier system of distribution" – are in need of a means to
satisfy the requests of their customers. Key objections raised by
opponents of consumer access to wines and our responses follow. We urge
members of the media to contact us in order to maintain balanced and fair
reporting.
1) Delivery to underage purchasers
While it is
not inconceivable for an underage person to order and receive beer, wine
or spirits by mail order the actual use of that mechanism is rare and does
not present a regulatory problem in the
normal sense.
Over the past ten years 12 states passed reciprocal wine shipment legislation establishing a legal method for mail order purchases from suppliers in other states (Includes CA, WA, OR, ID, CO, NM, MO, IA, MN, WI, IL and WV). New York, California, Connecticut, Hawaii, Illinois and Virginia have permitted intrastate delivery of wine by common carrier for many years. If underage purchases through mail order was a significant regulatory problem it would have surfaced long time ago.
The logistics of an underage person ordering, having a secure credit
card available, being present at the time of delivery and fooling the
delivery person for receipt of a package clearly marked "Adult Signature
Required" is risky and very daunting. It is unlikely that underage persons
would risk the paper trail. Underage drinkers are price-sensitive, and
obtaining alcohol products by direct shipment – at full retail price plus
shipping costs – is relatively expensive alcohol. Underage drinkers want
immediate access and satisfaction, and are not inclined to wait the week
or longer for mail-ordered alcoholic beverages to be delivered.
There is a huge amount of underage drinking in U.S., even before
consideration of any nominal impact of direct shipment sales. According to
a study by the Department of Health and Human Services, 50% of 18-20 year
olds and 31% of 6-17 year olds reported drinking in the last month.
Alcohol consumed by the underage is primarily procured through retail
outlets.
2) Potential loss of state excise tax
Very little
wine is shipped for delivery by common carrier, even in states where
shipment and delivery of wines or other alcoholic beverages is legal. The
largest wine consuming states, New York and California, allow intrastate
shipping. Reciprocal shipment of wines is permitted between the West Coast
states of Washington, Oregon, Idaho and California and 8 other states.
Estimates of the maximum amount of wine shipped either intrastate or
through reciprocal laws are approximately 5% of the 12% of wine which is
$7 or more per bottle, or 0.6% of the total market.
As an example of potential for loss excise tax revenue, Maryland
collects approximately $3.6 million in wine excise taxes each year. Even
if wine shipped illegally to Maryland without the payment of taxes grew to
the national average of 0.6% of total wine sales, an unlikely scenario,
the loss of revenue to Maryland would be $21,600 per year.
3)
Access to wines not currently available should be allowed.
The
underlying issue is the right of a consumer to be able to order a wine
which may not be available at the local wine shop. Wine lovers have
typically visited wineries in other states, have discovered uncommon wines
through word of mouth, or are interested in sending wine gifts to friends.
It is outrageous to suggest that these reasonable activities should be
prohibited.
4) Summary
There are effective and reasonable
counters to all arguments presented against direct shipment. Our
membership and a united wine producing community is committed to the
passage of state permit laws to allow direct wine shipment, similar to the
law passed by Louisiana in 1997, which provides reasonable access to
market while ensuring the collection of all sales and excise taxes,
licensing and court jurisdiction for all shippers, and establishing
protections against the shipment to underage and to customers in dry
areas.
The Mission of the American Vintners Association is to enhance the
public perception and business environment of American wine-growing
through marketing, public information and grassroots government
representation initiatives.
WINE
INDUSTRY ASSOCIATIONS ADDRESS
DIRECT SHIPMENT
Washington, DC – Leaders of eleven trade associations representing retailers, wholesalers and producers of wine met in Washington, D.C. to continue dialogue on problems and opportunities presented by direct marketing of wines.
The challenge for all groups is to respond to market access concerns of small producers and to the public’s interest in prompt, easy and legal access to wines without creating serious negative implications for existing businesses or regulators. All agreed that a solution should augment – not supplant – the three-tier system.
The 21st Amendment to the U.S. Constitution gives each state the right to regulate and tax the sale of alcohol beverages. The winery trade associations indicated that they will be pursuing state legislation similar to the recently passed Louisiana permit system which gives states jurisdiction over the permit holders, requires the payment of excise and sales taxes, makes provision for safeguards against delivery to the underage or delivery to consumers in dry areas. Other trade associations of retailers and wholesalers favored a state-by-state determination of the best approaches to wine sale and distribution rather than a national model. All parties were encouraged to participate in a newly-formed technical committee to identify improvements needed to make the existing legal structure for distribution and sales of alcohol beverages more responsive to the current environment of consumer expectations.
Organizations represented in the meeting include the Wine & Spirits Wholesalers of America, the National Association of Beverage Importers, the National Association of Beverage Retailers, the National Licensed Beverage Association, the Wine & Spirits Guild of America, the California Retailers Association, American Vintners Association, Coalition for Free Trade in Licensed Beverages, Family Winemakers of California and Wine Institute. In addition, several independent retailers of wine were represented individually, including Beverages and more!, Virtual Vineyards, and Zachy’s.
AVA PROPOSES DIRECT
ACCESS FOR WINE CONSUMERS
Washington, DC – Speaking on behalf of wineries throughout the U.S., Jerry Douglas, former Chairman of AVA and Vice President of Biltmore Estate Wine Company, Asheville, North Carolina, asked members of the House Judiciary Sub-Committee on Courts and Intellectual Property to amend proposed legislation granting greater ease of access to direct shipment of wine. H.R. 1063 has been proposed to grant states access to Federal courts for enforcement of state laws prohibiting direct shipment of wine, beer and spirits. The testimony on behalf of the American Vintners Association proposed an amendment to balance the enforcement provisions of H.R. 1063 with a requirement for reasonable access to wines shipped directly to consumers.
Wholesalers, who benefit from the requirement that all sales of wine, beer and spirits must go through their companies, oppose modification to allow direct shipment of wine. Their opposition seeks to have government action protect wholesalers from marketplace competition.
"Modern consumers are used to ordering a wide variety of specialty products by mail or phone," said Douglas. "They are frustrated that they cannot do the same for wine."
H.R. 1063, sponsored by Representative Ehrlich (R-MD), would allow states to use the federal courts to prosecute individuals or businesses who ship alcoholic beverages in violation of state laws. While twelve states have passed laws allowing their citizens to receive limited direct shipments of wine from reciprocating states, five other states have legislated felony-level penalties for illegal direct wine shipments. Louisiana, the most recent to increase punishment for breaking their laws, also incorporated a new provision allowing wineries to obtain a special permit to ship small volumes of wine to citizens and pay the Louisiana taxes.
"The idea of balancing restriction with access is what we need to address consumer needs," said Douglas. "The current three-tier system of supplier – wholesaler – retailer can’t meet the demand for customer service."
The requirement to ship wine only through wholesalers is an outcome of the repeal of Prohibition. States established the wholesale tier by law to create distance between the supplier and retailer of the alcohol beverages. But the fabric of society and the patterns of use of the beverages have changed dramatically since the 1930’s. American wineries, which practically did not exist prior to prohibition, have increased dramatically in number and geographic distribution, while the number of wholesalers has declined through consolidation. There are now over 1,600 wineries in 47 states, a number vastly exceeding the capabilities of traditional three tier distribution using wholesalers and retailers.
In their attempt to limit competition by preventing direct shipments, wholesalers have posed a number of concerns about direct shipments, such as the possibility of purchase by under age customers, delivery to dry areas that continue to prohibit alcohol, and the loss of tax revenue to the states. Proponents of the access amendment counter that it is highly unlikely that a teenager would order such a relatively expensive beverage product or risk a highly visible trail of purchase and receipt of a product. Direct shipment of wine does not pose a significant threat to laws protecting dry areas because states can require control of deliveries by computer analysis of addresses.
Potential tax losses have been greatly overstated by the opposition to direct shipment. AVA estimates that less than 5% of higher priced wines might ever be sold through direct shipment because customers prefer to obtain their wines locally, as needed. Only 8% of wines are priced above $7.00, so the potential for direct shipment of wine, under favorable legal and transportation circumstances represents a mere 0.4% of the total wine market. By example, in the state of Maryland that small percentage of potential direct shipment wine sales would represent less than $15,000 in excise taxes.
Those estimates considerably overstate any possible losses because "full direct shipment potential" usually involves a high percentage of intrastate wine shipments with all taxes paid.
Rather than viewing these sales as loss of tax revenue, states which establish a legal permit system for direct shipment of wines, like the Louisiana system, could actually realize increased revenue because this category would represent new sales of fully taxed wines.
Douglas concluded his testimony with the following observations:
"Small businesses require market access to consumers in other states. This access must permit freedom for reasonably unfettered trade between the states for competition to flourish. The enforcement provision permitting the use of the Federal court system must be balanced by a freedom of commerce provision to allow fair market access."
AVA proposed Wine Access Amendment to H.R.
1063
"State access to federal court jurisdiction shall be
contingent upon establishing reasonable market access for limited
shipments of wine to consumers by United States wineries. Compliance with
this clause to be certified by the Secretary of the Treasury."
The American Vintners Association is the national association of American wineries representing over 500 winery members in 40 states. Legal solutions to the direct shipment of wine has been a top priority issue for the association for several years. In addition to providing testimony in support of a market-access amendment to H.R. 1063, the AVA has brought together industry trade associations representing wineries, wholesalers and retailers for a series of meetings with the goal of crafting a mutually agreeable solution.
American Vintners Association
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Street, NW Suite 360
Washington, DC 20005
(800) 879-4637
fax:
(202) 347-6341
info@americanwineries.org