This post originally appeared in the Nov. 30 Sacramento Report. Get the Sacramento Report delivered to your inbox.
Lawmakers, vineyard owners and other industry experts had a wine session in San Diego Thursday – that is, the Legislature’s Wine and Governmental Organization Committee meeting examined the impact of state and federal regulations on California’s wine industry.
Representatives from the Association of California Vintners and the African American Association of Vintners raised concerns about international trade, rising costs of distribution and a new federal law called the Craft Beverage Modernization and Tax Reform Act.
The measure, implemented last year, lowers the federal excise tax for breweries, wineries and distilled spirits producers. Tim Schmeltzer, vice president of California state regulations at the California Wine Institute, said his group is working to get permanent legislation in place to expand the provisions of the act.
“The unfortunate part of getting that done is that we have to compromise, essentially we take a two-year extension when pushing for permanence,” Schmeltzer said.
Small vineyard owners in the state could face future challenges with distribution and tariffs on imported glass. Glass tariffs, currently at 10 percent, will rise to 25 percent beginning Jan. 1 as a result of the United States’ imposition of tariffs more than $200 billion of various Chinese goods.
Mac McDonald and Phil Long of the African American Vinters Association said inconsistent shipping laws also pose challenges to small vineyards.
“It is actually easier to ship to other countries than it is to ship to other states,” Long said. He proposed a conversation between states to streamline shipping regulations.
McDonald said he created the association when he noticed a lack of black wine industry professionals.
Assemblywoman Cecilia Aguilar-Curry, who chairs the committee, said state regulations and international trade relationships have to keep pace with the growing industry.
“I will continue, as well as my colleagues, to make sure that we help our small businesses and our small farmers thrive,” she said. “I think we’ve made some headway on some of the legislation that we have run this past year with the co-location of breweries and wineries.”
Sen. Bill Dodd said California made up more than 97 percent of the more than 1.5 billion in U.S. wine exports last year.