Livin’ the Dream, Part One…
There are nearly 100 licensed wineries in Arizona. The impetus to set up shop and live the winemaking dream utilizing the state’s Series 13 license is a seductive notion that could have easily been the design of Morpheus and Dionysis themselves. This license does however come with a great deal of responsibility and obligations to not only the governing bodies that regulate the industry, but to the purchasing public as well.
For its thirty odd years, our industry is still in its infancy and is feeling some expected growing pains. The governing bodies are only now beginning to address the previously unforeseen needs of a rapidly progressing industry. Arizona’s Farm Wineries and vineyards moving into their second, third and even fourth decades of growing are experiencing challenges and expressing a desire to create legitimacy and integrity within the industry.
In this two part article, we will describe first, the privileges given to Arizona grape growers and Arizona wine producers. Recent legislation mandates that these privileges are contingent upon a licensed winery’s commitment to grow grapes in Arizona soil and or produce Arizona wine in house. The second article will describe a licensed winery’s responsibilities, its obligations and how the new legislation will play a key role in the preservation and strengthening of a legitimate state wine industry.
To retain the privileges of Farm Winery, production must stay below 20,000 gallons, (8,400 cases) annually. Comparatively speaking, a single tank sitting at a Mondavi tank farm will hold 2-3 times this amount. Because we produce a limited amount, we are given privileges that allow AZ winemakers to compete in the wine industry on a more level playing field.
For example, an AZ winery has the unique privilege to self-distribute. This enables sales to be made directly to restaurants, liquor stores, wine bars, box stores, and each other.
Wineries are allowed to participate in wine festivals and sell directly to the public at events such as art festivals, county fairs and charity events.
AZ farm wineries can have a tasting room and retail location separate from the production facility. This is a key privilege because generally the grapes aren’t grown in highly populated or well trafficked areas.
A winery may custom crush and ferment wines for another winery that may not have the ability at its start-up to process grapes and produce wine for itself.
Wine clubs are an essential component to a winery’s sustainability with in-state shipments occurring two to four times per year. Another unique privilege. However, shipping out of state requires the permission of 49 other state agencies which in itself is a logistical and licensing conundrum.
A winery may obtain a restaurant license which allows beer and spirits to be sold, yet its percentage of alcohol sales must stay within the allowable percentage of liquor to food sales percentages allowed by the state.
Most recently, wineries were granted the privilege to distill grape products, ie Grappa, brandy and grape spirit. This opens a new door for Arizona wineries to produce products such as vodka, herbed spirit, (gin, agave, rum-spiced spirit, whiskey style products, etc.)
Arizona wineries have a comfortable set of privileges that allow healthy competition, sustainable growth and that encourage future investment in the industry. With privilege comes great responsibility and accountability. In April, we will describe in detail some of the challenges and the cost of accountability.