|
State
wineries feel all bottled up
With direct shipping open to others,
some Texas producers want the right, too
10:14 PM
CDT on Saturday, September 20, 2003
By MATT STILES / The Dallas Morning News FREDERICKSBURG, Texas
– No
fan of conventional wisdom, Cord Switzer isn't afraid to express
his opinions, especially about his small winery business in
the heart of this quaint tourist destination in the Hill Country.
He dismisses people he calls "wine snobs," the kind
of folks who just don't understand his special "sweet"
Cabernet Sauvignon dessert wine – a twist on the more
common "dry" style made with the same grape.
What's got Mr. Switzer talking these days is a recent federal
court decision that allows adult Texans who live in "wet"
areas to buy wine directly from out-of-state wineries –
or from Web sites such as wine .com – and have the bottles
shipped to their doorsteps.
But under Texas law, his growing company, Fredericksburg Winery,
can't sell his wine the same way. If customers seek to buy
from him over the phone or on the Internet, he must ship his
wine to a participating package store in their area where
they can pick it up – an extra step he and others say
is unfair to Texas' budding wine industry because it's an
added burden for consumers.
"Is there a problem with that? Yes," said Mr. Switzer,
60.
At issue, Mr. Switzer and others say, is whether the Legislature
should allow Texans to bypass the "three-tier" system
of wine traveling from the producer to a wholesaler to a package
store, then to the consumer.
They believe doing so would help many of Texas' approximately
50 wineries, especially those like Mr. Switzer's that don't
sell enough to effectively enter the statewide distribution
stream.
Fredericksburg Winery sold only about 6,000 cases last year
from its spacious shop on Main Street.
"It's totally a level-playing-field issue," said
state Agriculture Commissioner Susan Combs, an advocate of
Texas grape growers and winery owners. "We should not
be disadvantaged."
Critics of direct shipments say it could make it easier for
children to get alcohol and perhaps take the decision of where
alcohol can be sold away from local voters.
Alan Gray, a spokesman for the wholesaler trade group Licensed
Beverage Distributors, said his group opposes direct shipments
to consumers by wineries from both inside and outside the
state.
"We do our best to see that alcohol is only sold to people
who are the legal drinking age," he said, adding that
distributors also are concerned that such shipments could
allow people in dry areas to buy wine, and that they could
cost retailers business.
Unconstitutional ban
Mr. Switzer's fight is similar to a larger national debate
in federal courts about whether states can restrict shipments
of wine coming into their state.
Texas' current situation arose this summer when the 5th U.S.
Circuit Court of Appeals decided in June that the state's
ban on wine shipments from out of state was unconstitutional.
The Texas Alcoholic Beverage Commission chose last month not
to appeal the ruling to the Supreme Court, effectively changing
state policy. Lou Bright, the commission's general counsel,
said the high cost of such an appeal figured in the decision.
The state now must decide how to deal with the new policy,
which is complicated legally and practically. How do shippers,
such as FedEx, which delivers shipments from wine.com, know
what areas of the state are "wet"?
And what, exactly, is "wet"? In some areas of the
state, retail alcohol sales aren't allowed. In other areas,
such as Arlington, beer is sold in stores, but not wine and
spirits.
"What you'll find is that there is no black and white,
there's lots of gray," said Dianna Offutt, executive
director of the Texas Wine and Grape Growers Association.
The direct-shipment issue is not affected by a constitutional
amendment approved by Texas voters this month allowing wineries
in "dry" areas to hold tastings and sell wine.
Some aren't sure whether direct shipments from wineries to
customers, in whatever form they are ever allowed, will have
a huge effect on the average $10-a-bottle consumers.
"I don't think that, at this point, it has that big of
an economic impact," said Paul Bonarrigo, co-founder
and co-owner of Messina Hof in Bryan, Texas, a wine brand
distributed to stores across the state. "I think consumers
would rather go to the store and pick it up right now."
A bill that would have allowed direct sales failed this year
in the state House after passing the Senate.
Tim H. Dodd, director of Texas Tech University's Texas Wine
Marketing Research Institute, said he doesn't believe that
direct shipment would have an immediate positive effect on
the Texas market. But he said Texans would have more choice,
which eventually could help boost an industry that employs
about 1,800 people and has an annual economic impact on the
state of about $130 million.
"The majority of people who purchase wine are not interested
in using the Internet as a vehicle for buying it," he
said. "This will mainly be for people who can't find
a particular wine from a small winery ... and want to be able
to purchase them directly."
He said such shipments could help the industry nationally,
too, depending on what the federal courts – and perhaps
eventually the Supreme Court – decide. There are still
about two dozen states that restrict out-of-state shipments.
"It is going to change the way that the wine industry
operates, and it's going to change the way consumers have
access to wine," Dr. Dodd said.
5th in nation
Texas is fifth in the country in production of wine, but only
5 percent or 6 percent of Texans drink wine made in the state.
Leading wine-producing states are California, New York, Washington
and Oregon.
Meanwhile, the number of wineries in the state has doubled
in the last 10 years, leaving some wineries clamoring for
a piece of the market.
"Why do we have this problem at all?" asked Mr.
Bright, the TABC counsel. "Over the last decade or two,
maybe, our per-capita consumption of wine has not gone up.
But production has gone up," as has the number of producers.
Nichole Bendele, public relations coordinator for Becker Vineyards
– one of a handful of larger, established wineries in
the state with wide distribution – said the Becker operation
wouldn't immediately benefit from shipping because the demand
isn't great.
Still, she believes it's important.
"These different laws making it easier to ship ... will
definitely help out all the wineries," she said.
Mr. Switzer said he believes it would help him. Given the
option, he would tell every customer who comes in his shop
about direct shipping. He said he thinks his sales would increase
by 50 percent, especially during the holidays.
As it stands, he has a form letter he sends people who e-mail
him about shipments. It's too much of a hassle, he tells them,
trying to find a package store – many of which are miles
away from the customer – to ship to.
"Does that hurt my sales? Drastically," he said.
"Does it harm the industry? Yeah."
E-mail mstiles@dallasnews.com
|
