|
Legislation intended to help small vintners passed unanimously in the House April 6. With strong support in the Senate, it is a bill House lawmakers hope will bear fruit for Lewes’s Nassau Valley Vineyards.
The bill is intended to resolve a dispute on wine distribution in Delaware, but it also addresses a national debate on controlling alcohol distribution.
HB 379 is a companion piece of legislation to HB 336, a bill lawmakers say is mandated by federal law.
Passing HB 336 alone would have put Nassau Vineyards out of business, said Rep. Joe Booth, R-Georgetown. “There are too many legislators with respect and compassion for small business owners to watch that happen,” he said.
Faced with a federal lawsuit and intense lobbying by state liquor distributors, House legislators passed HB 336, which will require that Delaware farm wineries sell their product to wholesalers who will distribute it to retailers, a process with which all other manufacturers or suppliers must comply.
Recognizing that Nassau Valley Vineyards, Delaware’s first and for now only winery, would be severely affected by the new law, several legislators and Alcohol Beverage Control Commissioner Jack Cordrey investigated possibilities of exempting small vineyards who have long sold directly to the public and to providers such as restaurants.
The result is HB 379, written by Cordrey and sponsored by Booth and Sen. Pro Tem Thurman Adams, D-Bridgeville.
HB 379 would create a new class of wine wholesalers that would ship or sell only limited amounts - less than 1,000 cases of wine annually - and pay a reduced fee for that privilege. Vineyards such as Nassau would have to adhere to the constraints of federal law by using a wholesaler but could do so independently and at a nominal fee.
Nassau Valley’s Peggy Raley said, “I don’t understand why small vineyards don’t have the same God-given right to prosper as other businesses. I do, however, feel blessed that so many lawmakers and officials are looking to resolve this.”
A U.S. Supreme Court ruling struck down a long-standing ban in Michigan on direct shipments of alcohol to residents by out-of-state providers.
That ruling allows unregulated sales of alcohol in the state, including internet and phone sales. Thirty-six states filed support cases, requesting the Supreme Court uphold individual state rights to police alcohol distribution.
Still, Delaware would be subject to a federal lawsuit if laws such as HB 336 were not in place and enforced.
Delaware has a three-tiered policy requiring producers, bottlers and distributors to be separate entities, but that policy makes Nassau’s current practice of direct sales questionable.
“The state will be sued if we don’t move, but I want to make sure we don’t put small wineries at a disadvantage,” said Sen. George H. Bunting, D-Bethany Beach. “This is a homegrown company. It should have the ability to compete.”
Bunting said he has stayed a vote on HB 336 in the Senate while House members, liquor distributor lobbyists and Cordrey ironed out HB 379. It is currently awaiting consideration in the Senate Agriculture Committee.
“When I saw HB 336 come across, I’m said going to hold this until we find a compromise on the second bill. This is the hammer to make that legislation on the other side go,” said Bunting.
Even if the legislation passes, however, hopes of continuing as an independent operator may die on the vine this season. Raley said the most likely scenario would be temporarily partnering with an established distributor, specifically NKS Distributors.
“The legislators have done a remarkable job of addressing this but the federal process is long and cumbersome. It is not just about paying for a license,” said Raley, predicting it would take up to two years to complete the process for a limited wine wholesaler license.
“In that time, I want to assure my clients, restaurants and liquor stores that they will have our products. Chris [NKS President Chris Tigani] and I are in agreement on that, and I believe he will be extremely fair and helpful,” said Raley.
Tigani said he looks forward to working with Raley on distribution. “We want any instate winery to have access to the market. I would like to see all Delaware business grow, it is vital to our economy,” said Tigani.
Executives of Delaware distributorships such as NKS spent weeks with legislators and Cordrey to complete and strike compromise on the two bills.
“This shows what success there is in working together. In this case, consumers are protected, the law is adhered to, and Delaware’s first winery is respected,” said Tigani. Cordrey said, “ This allows small vineyards to thrive, to concentrate on winemaking and wholesalers to concentrate on distribution.”
As of April 6, the legislation is on the Senate ready list. It is expected to pass in the Senate this week under Adam’s leadership with support from Bunting and Sen. Gary Simpson, R-Milford.
“We are going to win this winery bill,” said Booth. Small vineyards are “a unique situation,” he said. “There are many positives including preserving open space, bolstering tourism and the economy and a real aspect of local pride.”
|
