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TechnographVirginia takes novel approach to wine distribution
By Michael Felberbaum, The Associated Press
Posted: 5/30/08 Section: Diversions
CROZET, Va. - It was on the stone porch of David King's sprawling estate in the foothills of the Blue Ridge Mountains that Virginia's budding wine industry was saved.
There, a select group of lawmakers and industry officials met to craft a unique wine distribution system as a way to overcome legal challenges to decades-old legislation that threatened to strangle the industry on the vine.
Their creation, the state-run, state-funded Virginia Wine Distribution Co., began operations late last month. Now, vintners around the country - looking for cost-effective ways to get their wines from the vine to consumers' glasses - are watching to see how well the Old Dominion's concoction ages.
From a place that counted fewer than a half-dozen wineries in 1980, Virginia has grown into a minor powerhouse, with 130 vintners. Last year, Travel + Leisure magazine named it one of the top five new wine travel destinations in the world, joining Italy, Spain, Chile and New Zealand.
Until recently, all that progress was in jeopardy.
Decades ago, state legislators exempted farm wineries from the three-tier system used by most states following the repeal of Prohibition in 1933, a system that takes the wine from the winery to the wholesaler to the retailer. The result was that wineries could take their products to stores and restaurants without a wholesaler in the middle, orchestrating the transaction.
But a 2005 federal appeals court ruled that the state law violated the laws of interstate commerce. Without the ability to cut out the middle man, many of the small wineries were faced with financial hardships, and many feared they could not bear the costs of independent wholesalers.
"I realized very quickly that self-distribution was dead, that in Virginia we were never going to, in my lifetime, have self-distribution back," said King, who opened his winery in central Virginia in 1998.
Meeting amid the acres of vines and polo greens of the King Family Vineyards, a group of about a dozen hammered out the details that would become the nonprofit distribution company.
There, a select group of lawmakers and industry officials met to craft a unique wine distribution system as a way to overcome legal challenges to decades-old legislation that threatened to strangle the industry on the vine.
Their creation, the state-run, state-funded Virginia Wine Distribution Co., began operations late last month. Now, vintners around the country - looking for cost-effective ways to get their wines from the vine to consumers' glasses - are watching to see how well the Old Dominion's concoction ages.
From a place that counted fewer than a half-dozen wineries in 1980, Virginia has grown into a minor powerhouse, with 130 vintners. Last year, Travel + Leisure magazine named it one of the top five new wine travel destinations in the world, joining Italy, Spain, Chile and New Zealand.
Until recently, all that progress was in jeopardy.
Decades ago, state legislators exempted farm wineries from the three-tier system used by most states following the repeal of Prohibition in 1933, a system that takes the wine from the winery to the wholesaler to the retailer. The result was that wineries could take their products to stores and restaurants without a wholesaler in the middle, orchestrating the transaction.
But a 2005 federal appeals court ruled that the state law violated the laws of interstate commerce. Without the ability to cut out the middle man, many of the small wineries were faced with financial hardships, and many feared they could not bear the costs of independent wholesalers.
"I realized very quickly that self-distribution was dead, that in Virginia we were never going to, in my lifetime, have self-distribution back," said King, who opened his winery in central Virginia in 1998.
Meeting amid the acres of vines and polo greens of the King Family Vineyards, a group of about a dozen hammered out the details that would become the nonprofit distribution company.
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