Wineries say cheers to new law
|The Fine Winery Law will reduce regulatory burdens on the wine industry to encourage growth in both sales and tourism. Photo by AP.|
August 01, 2011Farm wineries will now be able to operate up to five branch stores under one license as part of a new law reducing state regulations on the wine industry.
Though the state's wine makers have yet to convince New York lawmakers to allow the sale of their products in grocery stores, The Fine Winery Law (S.4143-a/A.7828-a) contains provisions recommended in a 2008 report by the state Wine Grape Task Force to ease other legal restrictions that advocates argued were limiting growth in the industry.
"This bill is a huge boost for wineries across the state. Reducing the regulatory burdens on farm wineries will allow them to continue to thrive as a key tourism, agricultural and economic engine for our state," said Gov. Andrew Cuomo, who signed the legislation on July 22.
Under the old system, if wineries wanted to open new satellite stores they had to obtain separate licenses for each one. The law will implement a new policy where branch stores are not considered separate entities, making it easier for wineries to expand and increase sales.
New York, which is currently the third largest wine producing state after California and Washington, took in $3.76 billion from the wine industry in 2008. There are 1,400 wineries in the state today.
"Not only will this new law permit both New York farm wineries and the state Liquor Authority to operate more efficiently, it also will allow these private businesses and state government to cut costs. This initiative is exactly what our state needs to generate more economic vitality, opportunity and prosperity," said Sen. Catharine Young R-Olean, a sponsor of the bill whose district includes one of the state's major wine-making regions.
"By streamlining regulatory requirements on farm wineries in our state, this bill will encourage new businesses and expansion in the agricultural industry," said bill sponsor Robin Schimminger D-Kenmore, chairman of the Assembly Committee on Economic Development, Job Creation, Commerce and Industry.
Another part of the law that Jim Trezise, president of the New York Wine and Grape Foundation, says will benefit the industry is the change made to the direct shipper's reports. Under this law, wineries will not have to send reports to the Liquor Authority unless the authority requests them. These reports detail where the winery is selling wine and how much of it they sell.
Trezise describes these reports as "very burdensome" and says this change will help smaller wineries by cutting the amount of paperwork to fill out. "It will save a lot of time and effort that was wasted before," he said.
Done Tones, president of New York State Wine Grape Growers, said about three-quarters of the grapes grown in New York are sold to make wine, and many of these grapes are sold to small wineries. He said the new regulations should increase sales.
"Anytime you can reduce some of the burdens, it has to help," said Tones, who has also advocated for allowing wine sales in New York's grocery stores.
New wineries can also now use custom crush services from already established wineries under the law. This means new and smaller wineries can contract with larger ones to use their equipment for a certain amount of time.
This should stimulate even more growth, according to Trezise, because new wineries will not have to spend money on expensive equipment when they're first starting out.
The law will also make it so all farm wineries, regardless of size, will operate under one type of license. Wineries manufacturing less than 1,500 gallons of wine per year will still be considered micro-wineries, and will still have to pay $50 annually.
Also under the new law, wineries will no longer be restricted to participating in five charitable events per year.
Although the wine industry in New York has not been growing in total acreage, it has been growing steadily in the past few years in terms of number of wineries. There are 10 to 12 new wineries opening every year, with 51 of the 62 counties in the state having at least one winery, according to Trezise.
This is due to the great track record of New York state wineries, according to Trezise. "We have proven that we can make really great wines in New York," he said.
He also added that this law shows the industry has a good relationship with state government. "That type of support from public officials gives people confidence that the state of New York wants us here."