Saturday, March 03, 2007

A maze of winery licensing and charity events

By JOHN OLNEY. Published in "Your Turn," Napa Valley Register Newspaper, Sunday, February 18, 2007

I attended the Feb. 9 informational meeting focusing on charitable wine donations and pouring called by Assemblywoman Noreen Evans, D-Santa Rosa, held in Napa.

One of the central points of the meeting was the way California Department of Alcohol Beverage Control handles "virtual wineries." These are the wine producers who do not possess on-site crushing facilities and can only sell their wines on a wholesale basis, or to the retail buyer by phone, fax or Internet. These wineries were formerly prohibited from donating wine to non-profits for fundraising events; however, ABC reinterpreted the law and now allows such donations.

I have identified more than 400 "virtual wineries" to date between Napa and Sonoma counties. As a group, they are usually the least sought-after producers because they are hardly known by the majority of both charities and consumers, and thus will not produce the high-revenue donated dollars at the auction.

ABC did not reinterpret the rules against these "virtual wineries" pouring their own wines or even being able to describe their own wines to attendees. If these wine producers attend the function, they better not discuss the wine they produce or, if caught, they will face serious fines and possible loss of licenses.

My listings also include more than 600 wineries between the two counties that fall under the ABC license Type 02, which is a winery that makes its own wine at its own site. They can both donate and pour at charity events. Most of the charities go after these highly visible wineries because of the amount of auction dollars they know their wines will draw. However, they are inundated with requests for wine donations, which often far exceed the budget on how much wine they are going to provide to charity.

The other central point of the meeting was the current ABC rules that only allow a charitable organization to apply for an event license 30 days in advance of that event. A number of attendees commented about the timing problems this causes when trying to solicit wine donations. The Catch-22 situation is that a winery cannot risk being cited for donating to a group that does not yet have a valid ABC license. Wineries will commit to charities with which they have had a record of having no event licensing problems. Any new charity is going to have a problems gaining donated wines unless they have "an in" with wineries where unwritten mutual trust in each other is clearly established.

Wineries cannot release the wine until three days prior to the event. The only way around this for the charity and the winery is again, "the good ole boy" approach of mutual trust or for the charity to obtain the much more expensive ABC event licenses. Obviously, the former option risks ABC discipline and the latter move cuts into the purpose of acquiring the wine in the first place.

The ABC representatives in attendance appeared to be genuinely sympathetic to many of the comments made by the attendees but as they frequently reiterated, they do not write the rules and regulations. Rather, they enforce the intent of the state legislative acts.

Assemblywoman Evans has submitted preliminary changes to existing laws. Even if her proposals become law, they would not take effect for quite some time. Optimistically, one should anticipate that there could be a battle over any changes that involve the political and economic well-being of the relationship between producer, wholesaler/distributor and consumer, which could delay enactment.

At a minimum, the "virtual wineries" need to come together to form their own advocacy group and put their money and mouths behind Assemblywoman Evans and her efforts. I wonder how many of them even know much about each other or where and how many of them they are?

At the Napa meeting I suggested that ABC allow the charitable groups to go out with their solicitation letter indicating "ABC Event License Pending" within the text of their letters. The ABC representative kind of excused this approach as not workable because they may not grant the license to the charity.

To this I say, why doesn't ABC publish a list of charitable organizations to which it will no longer issue a permit, and a list that shows which charitable organizations are on suspension from gaining an event license and the period that suspension is to remain in effect?

One can currently visit the ABC web site and obtain such information on each license to a winery, merchant, distributor, etc. anywhere in California.

Doing something like I suggest just might make the whole process a bit more palatable!


Anonymous Anonymous said...

On behalf of all not-for-profits, thank you for this article.

You mentioned a list of 400 'virtual wineries,' is that list available online somewhere? If so, where?

If not, where could someone find the list of 600 wineries that fall under the ABC license Type 02?

Thanks in advance.

4:12 PM  
Blogger The wine Country Club said...

There is no single source listing all the CABC Type 17/20 wine producers. CABC allows one to go into its "Reports" section where one can scan by county, by city, by zip, census, etc. and by CABC license type. But to find the CABC Type 17/20 wine producers, one has to search all CABC Type 17 licenses and then look up each listed entry to determine if it is a wine producer or simply a wine merchant. Believe, this takes a lot - a really lot -- of time.

We have completed such for Napa Zip 94558 and for St. Helena but that is all and it has taken us about 60 hours.

We probably have the largest listing of Type 17/20 wine producers for Napa and Sonoma but because of the amount of time to produce it -- thus the associated cost -- we decline at this time to make it available to anyone else.

Please go to our latest efforts to see what we are doing to change Califoenia laws and to develop a TRADE ASSOCIATION of CABC Type 17/20 wine producers >>>

12:25 PM  

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