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June 02, 2010

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Has anyone been able to get Tim Bishops opinion of HR 5034???

Money talks. Calling isn't going to do anything without a formal lobbying arm, this is going to happen.

If this passes, it will be devastating for small wineries like ours. Small wineries depend on being able to ship direct to consumers to drive revenue growth.

When a winery sells direct to a consumer, the winery retains 100% of the revenue. Selling through a distributor, means offering the wine at a 50% discount. A winery selling a $20.00 bottle of wine direct would only receive $10.00 for this bottle from the distributor.

This system can work for wineries with large scale and high volumes. But for small producers losing this much margin means a significant hit in revenue.

Additionally, while there are some fine distributors out there, they are less interested in working with small wineries to promote our products - it simply isn't an efficient use of their time.

Robin: I could be wrong, but I believe that Bishop has signed on as a co-sponsor, which is extremely disturbing given he represents a wine-producing region.

This system can work for wineries with large scale and high volumes. But for small producers losing this much margin means a significant hit in revenue.

Evan,

Thank you for bringing this to our attention.
Where are the various winery organizations on this?
One more time we are disappointed that organizations that exit to promote the wines of NY, do not seem to provide leadership. I have written to Rep. Tim Bishop to fund out what is his position and requested a meeting with him.

The co-sponsors in NY State are:
Tim Bishop (Long Island)
Michael McMahon (Staten Island)
Edolphus Towns (Brooklyn)

There are quite a few in New Jersey, Massachusetts and Pennsylvania too (106 across all states as of last count).

http://www.govtrack.us/congress/bill.xpd?bill=h111-5034

I find it interesting that it appears none of the Washington State delegation has signed on, and only a handful in California have either.

Scott -

Thanks for the additional info. As Charles notes, NY's wine industry is not exactly galvanized, and leadership tends to be lacking on issues like this one. Perhaps that's why the west coast producers are represented in Congress by people who understand the potential impact.

We've interviewed a number of wineries that rely on clubs and direct shipping for a significant portion of their business. The clubs and shipping help to normalize their incomes throughout the year, leaving fewer "slow spells". Changes to the current system would be devastating to most small to mid scale wineries that rely on a dedicated fanbase, whereever they may be.

Hey Evan...have you spoken to anyone at the NYWGF about this? I'd be curious to hear their position and find out if they are doing anything about this.

The good news is, data is everything. The more we get, the stronger our analysis will be.

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