As a kid, I can remember seeing the EF Hutton commercials. They had a group of people in a room and someone would say "EF Hutton says that" and then everyone would go quiet and try to listen. The commercial would end with "When EF Hutton talks, people listen."
When it comes to the world of wine, and especially when you are talking about investing in vineyards, EF Hutton is a good comparison for David Freed. Mr. Freed is a partner in Silverado Partners who own and/or manage a large number of vineyards, as well as own a wine brand. Over the years, Silverado has been one of the major players in vineyard investment and development in all of the major wine producing regions, incluing Santa Barbara County. He is a regular speaker at industry meetings and is highly respected by the members of the industry.
Recently, he was interviewed on the inability of California wines to keep up with demand and to hold their market share. He indicated that this will continue and that California will be unable to hold onto its market share, because there is not enough planting going on to support it. Here is a quote from the article in Wine Business......
"Freed thinks there won’t be much new planting, though. Napa is basically planted out, Sonoma County is basically planted except in marginal areas, new vineyard development has stalled out on the Central Coast. (It’s essentially on hold in Paso Robles because of concerns about ground water levels; Santa Barbara is sewn up in regulatory red tape, and the economics in Monterey are difficult because of fierce competition for land from vegetable growers)." http://www.winebusiness.com/news/?go=getArticle&dataid=121797
I have been a land use lawyer in Santa Barbara County for the past 8 years, and I could not entrely dispute what he was saying about people staying away due to issues with red tape. However, I cannot not help being down right angry about it. Santa Barbara County claims in its right to farm laws and various of its ag rules, that it supports agriculture and wants to promote agriculture in the County. If this is true, then why is Mr. Freed convinced that red tape is what stops him from buying or planting vineyards in Santa Barbara County.
In the other Central Coast Counties, Freed indicates that either land prices, competition, or water issues have put the brakes upon vineyard development. However, here in Santa Barbara where we supposedly support agriculture, it is government red tape that stops development. If this County wants to see more vineyards planted, it had better figure out a way to keep Planning and Development as well as the anti everything agitators out from creating the kind of red tape that stops a man like David Freed from putting his money to work in this County.
Friday, September 20, 2013
Friday, August 30, 2013
Santa Barbara County Winery Development Ordinance
Santa Barbara County Winery Development Ordinance Revisions
Santa Barbara County is still in the middle of a budget crisis. One of its largest industries are the wineries and vineyards. On top of the revenue that this industry creates directly, it is also one of the major attractions for tourist visiting the area. All this being said, one would think that our County would be supporting these businesses, instead of enacting further unnecessary restrictions upon them.
Instead, the County has a proposed new ordinance that does not support the industry. If this is not stopped, it will leave any new winery being permitted severely handicapped with respect to their ability to compete with the existing wineries or to even run a sustainable business. Along with the incredible long and expensive processing times for a winery permit in this county, this inability to compete will simply drive prospective investors to start wineries somewhere else.
Let me tell you just a few of the issues with this proposed ordinance:
Santa Barbara County is still in the middle of a budget crisis. One of its largest industries are the wineries and vineyards. On top of the revenue that this industry creates directly, it is also one of the major attractions for tourist visiting the area. All this being said, one would think that our County would be supporting these businesses, instead of enacting further unnecessary restrictions upon them.
Instead, the County has a proposed new ordinance that does not support the industry. If this is not stopped, it will leave any new winery being permitted severely handicapped with respect to their ability to compete with the existing wineries or to even run a sustainable business. Along with the incredible long and expensive processing times for a winery permit in this county, this inability to compete will simply drive prospective investors to start wineries somewhere else.
Let me tell you just a few of the issues with this proposed ordinance:
- The ordinance reduces the number of allowed visitors from 80 to 50 without triggering the need for a special events permit. This is a dramatic reduction and is being proposed for new wineries that are both 40 acres and 500 acres. Clearly, the impacts of 50 people is different on these two parcels sizes. Thus, the across the board reduction is simply arbitrary and not related in any way to impacts or efforts to balance the industries needs.
- The ordinance allows for wine maker dinners to be hosted on the winery premises. However, it also requires that all guests be off the property prior to 7pm. This early closing time is simply to strict for wine maker dinners or special events that often occur later in the evening. While it is fine to limit the normal tasting room hours to 7pm, wineries need to be allowed to hosts guest into the evenings for events and dinners. Many of these events are held in support of our local charities, and the community and our charities needs this support.
- The ordinance provides an incredibly broad definition of who a winery visitor is. If someone only wants a winery and no tasting rooms, they are not allowed to have any winery visitors at all. This would mean that you could build your winery and never be allowed to show it to your parents and friends. It is broad enough that you would also be prohibited from allowing potential buyers on the property to look at it.
- The ordinance does allow for finger food and prepackaged items to be served in the tasting rooms. This will assist with both the visitor experience, as well as having insuring that only sober drivers on the road. However, for special events, only catered food is allowed. It is not clear whether this implies that the food cannot be made onsite in the wineries kitchen, but to require all food to be made offsite would simply degrade the quality of the food and increase the amount of traffic to the site for little or no apparent reason. It again seems entirely arbitrary to require offsite food production, as this has no impact on the neighbors.
- Lastly, the County has stated that these revisions will not affect the holders of existing permits. However, there are terms being defined in this ordinance that were not clear in the previous ordinance. An example is by appointment tastings. Presently, the County is very coy about whether this is allowed without a tasting room permit Going forward, they have defined this as needing a permit. It is hard to imagine how this could not affect people with an existing permit.
Thursday, April 18, 2013
Repost from Ship Compliant
I am reposting the an email from Ship Compliant. If you are a small winery, you need to be looking at the data in the report.
Posted: 16 Apr 2013 02:28 PM
PDT
Every year, ShipCompliant teams with Wines & Vines to report on the state of the direct-to-consumer wine market. The 2013 Direct Shipping Report is now available! If you are feeling antsy, feel free to click here to download the report! If you’ve got a few minutes, we’ve provided some summary highlights below.
The model, built to project the
totality of winery direct-to-consumer shipments, provides a vivid picture of
this important distribution channel.The report is based on millions of
anonymized transactions in our ShipCompliant Direct software that
ultimately led to direct shipments from January 2012 through December 2012.
Using the comprehensive Wines & Vines database of all 7,400+ wineries
across the United States, these transactions are the basis to project total
shipments from all United States wineries using multiple stratifications
including location of winery, annual production of winery and destination of
shipment.
1. Direct shipping is
growing (in volume and value)
According to our data, American wineries have been
shipping more wine every year. Direct-to-consumer orders reached a new high of
over 3.1 million cases in 2012, representing a 7.7% increase from 2011, and a
17.7% increase from 2010. That equates to over 72 bottles sold per minute, or
1.2 bottles sold every second! It’s not just the volume that’s growing; the
average price of a bottle of directly-shipped wine has also risen over 5% in
the past two years, which leads us to record sales of over $1.465 billion in
2012.
According to our data, American wineries have been
shipping more wine every year. Direct-to-consumer orders reached a new high of
over 3.1 million cases in 2012, representing a 7.7% increase from 2011, and a
17.7% increase from 2010. That equates to over 72 bottles sold per minute, or
1.2 bottles sold every second! It’s not just the volume that’s growing; the
average price of a bottle of directly-shipped wine has also risen over 5% in
the past two years, which leads us to record sales of over $1.465 billion in
2012.
These figures show that the
direct shipping market is quickly becoming a more important (and more
profitable) distribution channel for wineries than in years past.
Expand your direct shipping
footprint; order licenses for new states here!
2. Direct shipping is
outpacing other sales channels
If we compare the annual sales of
the direct shipping market to the U.S. Export figures released in February by
the Wine Institute, we
find that the 2012 value of domestic direct shipping ($1.465 Billion) exceeded
the value of wines exported from the United States to Europe, Asia and the rest
of the world. In addition, the average price of a direct shipped wine is 26%
more than the average bottle of wine exported from the the U.S.
3. More reliance on the fall
and winter seasons
The fall and winter rush at
wineries is showing no signs of slowing down. Our data from 2012 shows a
remarkable skew towards the last four months of the year, and is approaching a
level of dependence that usually is only seen by the inflatable Santa Claus lawn
ornament industry.
Our research has also shown that
the last quarter of the year saw 37% of total sales in 2012, and September
sales of direct wine jumped 26% year over year. This should be a call to action
for your business– if you aren’t focusing the majority of your energy into fall
and holiday season, you should be.
This is just a sample of our
findings. We’ll be analyzing additional elements of the report in the coming
days. In the meantime, check out the entire report by clicking the link below.
Monday, June 18, 2012
Wine Club Contracts
I recently taught a class to a group of present and aspiring tasting room managers. Many of them were not aware that there wine club contracts were regulated by the state. With the abuses of recurring contracts by health clubs and CD of the month clubs, the State stepped in to regulate these types of recurring contracts, including your wine clubs.
California Business & Professions Code §17600:
• Effective
beginning on December 1, 2010;
• Regulates
an offer which includes an automatic renewal provision;
• Offer must
include a clear and conspicuous disclosure; and
• Clear and
conspicuous = larger type than the surrounding text, or in contrasting type,
font, or color to the surrounding text of the same size, or set off from the
surrounding text of the same size by symbols or other marks, in a manner that
clearly calls attention to the language.
What Must All Wine Club Contracts Include:
- The subscription
will continue until the customer terminates the contract;
- The
cancellation policy for the offer;
- The
amount of the recurring charges that the customer's credit card will be
charged, and, if the amount will change, the amount that the charge will
be changed by;
- The
duration of the automatic renewal term or that the subscription is
continuous; and
- If
there is any minimum purchase requirement.
I know that many wine clubs only have a small form where they
collect contact information. You can add
this information to the form, or you can post terms for your wine club
membership on your site. Lastly, you could
include this information in your club shipment.
Thursday, November 17, 2011
Ranch Insurance and Operating Companies
When I read articles like these, I questions whether my clients maintain enough insurance and have proper operating companies in place to protect their personal assetts from these types of claims:
$17 million Zaca Fire costs repaid
La Laguna Ranch LLC, Rancho La Laguna LLC, La Laguna Cattle Company LLC and Rancho Reata LLC made the final $5.5 million payment Tuesday to the U.S. Treasury in a $14 million federal settlement over the 2007 Zaca Fire, according to the U.S. Attorney’s Office in Los Angeles
The companies, which agreed to the settlement without admitting fault, also paid $3 million to the California Department of Forestry and Fire Prevention, the U.S. Attorney said.
The Zaca Fire ignited on July 4, 2007, when employees of La Laguna Cattle Company were using a grinder to repair a section of metal pipe.
Sparks from the grinder ignited dry vegetation, which started the fire.
It quickly spread from the ranch property to state and then federal land in Los Padres National Forest, where it burned 228,000 acres until it was fully controlled months later, on Oct. 28, 2007.
The Zaca Fire was the second largest wildfire in California history. At its peak, thousands of fire personnel were assigned to the blaze, which injured 43 people and destroyed one outbuilding.
However, no one was killed and no major structures were lost as the fire was steered away from communities and into Los Padres National Forest.
The companies, which agreed to the settlement without admitting fault, also paid $3 million to the California Department of Forestry and Fire Prevention, the U.S. Attorney said.
The Zaca Fire ignited on July 4, 2007, when employees of La Laguna Cattle Company were using a grinder to repair a section of metal pipe.
Sparks from the grinder ignited dry vegetation, which started the fire.
It quickly spread from the ranch property to state and then federal land in Los Padres National Forest, where it burned 228,000 acres until it was fully controlled months later, on Oct. 28, 2007.
The Zaca Fire was the second largest wildfire in California history. At its peak, thousands of fire personnel were assigned to the blaze, which injured 43 people and destroyed one outbuilding.
However, no one was killed and no major structures were lost as the fire was steered away from communities and into Los Padres National Forest.
Friday, August 26, 2011
Wine Snobbery
I read an article on food snobbery in the New York Times. http://www.nytimes.com/2011/08/25/opinion/bruni-unsavory-culinary-elitism.html?em&exprod=myyahoo It struck a cord with me, partly because of the fact that Gary Vanerchuck, a guy that I have always associated with bringing a distinctly unsnobbish view to the wine industry, retired from reviewing wine on line. I am wondering if any readers know of people out there that are doing a good job of bringing wine out of the aura of high scores and high prices and down to talking about how to get good wine at really reasonable prices.
Please comment and let me know(comments would allow me to assume that someone actually reads this stuff.)
Please comment and let me know(comments would allow me to assume that someone actually reads this stuff.)
Friday, July 22, 2011
Dropping a Million Dollars Worth of Wine
When was the last time you reviewed your insurance policy to determine if you have coverage for dropping a pallete of wine? Does your policy cover you for replacement costs? What about lost profits?
Million dollar drop as wine tumbles
- Staff writer
- From:Herald Sun
- July 22, 201112:00AM
IT was certainly an expensive drop - more than $1 million worth of shiraz wine has gone down the drain after it was dropped by a malfunctioning forklift.
The 462 cases of 2010 Mollydooker Velvet Glove shiraz - at $185 a bottle - fell more than 6m to the ground as it was being loaded for export from Adelaide to the US.
The drop was so forceful, the bottles punched through the top of the cartons. Winemaker Sparky Marquis said the accident had cost him a third of his annual production.
"We just couldn't believe it," Mr Marquis said.
"This wine is our pride and joy, so to see it accidentally destroyed, and not consumed, has left us all a bit numb."
Mr Marquis now is working with insurance agencies to help recoup the losses.
Friday, July 15, 2011
Signs in Los Olivos
It appears that one of our neighbors has complained about signs in Los Olivos and some 40 property/business owners have received notices about their signs. One of my favorite things about living in Los Olivos is that my neighbors are incredibly helpful, whenever I have needed something. Thus, I am posting what I know abut properly having a sign approved in Los Olivos. As always, if you have questions, please feel free to give me a call. Also, I hope this will inspire whoever filed the complaints to seek other means of resolving their issues the next time.
For Sign approval:
1. Do an overall sign plan for the entire building – based on building size, etc, and then board of architectural review 35.82.150 - Overall Sign Plans – p494 of LUDC
2. Submit the sign to theBoard of Architectural Review for approval. 35.82.070 - Design Review
-In the Santa Ynez Valley the regional BAR is the Central County Board of Architectural Review
(CBAR) see pg201 SYV Community plan (pdf p211 of 260).
-Board of Architectural Review in compliance with Section 35.82.070 (Design Review) see Appendix A SYV Community Plan.
Notes:
I) Need frontage of lot to be 125’ or longer to have 2 signs (realestate style)
II) Property owner needs to overall sign plan, each tenant needs to get an SCC (sign cert of conformance)
Sign Permitting (256)
35.38.090 - Signs Allowed in Commercial and Industrial Zones Outside of Shopping Centers (p256)
C. Wall signs.
1. For each enterprise, one on each street frontage.
a. The sign area on each frontage shall not exceed one-eighth of the square footage of the structure façade of that portion of the floor occupied by the enterprise and upon which façade the wall sign is to be located.
b. In the case where an enterprise occupies more than one floor of a structure, then the sign area shall not exceed one-eighth of the structure façade of that portion of one floor occupied by the enterprise.
D. Under canopy signs.
1. One for each enterprise having entrance under or offering service under the canopy.
2. Not exceeding six square feet in sign area.
3. Lower edge of the sign shall be at least eight feet above finished ground level.
E. Projecting signs.
1. One projecting sign on each street frontage consisting of only a symbol with or without words relating to the activity on the premises.
2. Shall not project more than three feet beyond the structure façade.
3. Shall not exceed three square feet in sign area.
4. The lower edge of the sign shall be at least eight feet above finished ground level.
5. Shall not be lighted
H. Freestanding signs.
1. One on each lot occupied by an enterprise, if the lot has a street frontage of at least 125 feet.
a. Not more than two separate signs may be placed on each freestanding sign structure.
b. If only one sign is placed on a freestanding sign structure, it shall not exceed 100 square feet in sign area.
c. If two signs are placed on a freestanding structure, the lower sign shall not exceed 20 square feet in sign area, and the total area of both signs shall not exceed 100 square feet. The lower sign area may be a changeable copy sign or a multiple copy sign.
d. The height of a freestanding sign shall not exceed 30 feet. Height shall be measured from the centerline of the improved portion of the public right-of-way to which the property has access and more specifically, from that point in the centerline that is closest to the sign. If the sign is located an equal distance from several centerlines, the 30 feet shall be measured from the highest of these centerlines.
e. A part of the sign or supporting structure shall not project over the street right-of-way.
f. The base of the supporting structure shall comply with the front setback of the applicable zone and shall be set back at least five feet from the street right-of-way.
Design Review (p473)
35.82.070 - Design Review
B. Applicability.
2. Design Review action required. Design Review action shall be required for all of the following:
b. Any structure or sign requiring Design Review as specifically provided under Article 35.3 (Site Planning and Other Project Standards).
E. Processing.
1. Applications for Preliminary and Final review by the Board of Architectural Review shall be accepted only if the application is accompanied by a development application or if the Department is processing an existing development application for the proposed project.
2. The Board of Architectural Review shall hold as least one noticed public hearing on an application for Preliminary or Final Approval and approve, conditionally approve or deny the request in compliance with Section 2-33.15 of Chapter 2, Article V of the County Code and this Section.
F. Findings required for approval.
1. Findings required for all Design Review applications. A Design Review application shall be approved or conditionally approved only if the Board of Architectural Review first makes all of the following findings:
a. Overall structure shapes, as well as parts of any structure (buildings, fences, screens, signs, towers, or walls) are in proportion to and in scale with other existing or permitted structures on the same site and in the area surrounding the subject property.
h. Signs, including associated lighting, are well designed and will be appropriate in size and location.
G. Local design standards. Additional design standards for a particular geographic area or zone may be developed as part of or independently of a Community Plan. Such standards serve to provide further guidance in the review of projects for the geographic area beyond those standards or findings contained in this Section.
Overall Sign Plan (p494)
35.82.150 - Overall Sign Plans
A. Purpose and intent. This Section establishes procedures and findings for the approval of Overall Sign Plans that regulate signs located within a shopping center. The intent is to ensure that signs within a shopping center are visually attractive and are in a harmonious relationship to one another.
B. Applicability. The provisions of this Section shall apply to all proposed signs located within shopping centers.
C. Allowed modifications. The review authority may allow the following sign modifications as part of the approval of an Overall Sign Plan:
1. Freestanding signs. An increase in the height, number and size limitations on freestanding signs.
3. Under canopy sign. An increase in the area limitation of under canopy signs.
4. Wall sign. An increase in the area limitation of wall signs.
D. Contents of application. An application for an Overall Sign Plan shall be submitted in compliance with Chapter 35.80 (Permit Application Filing and Processing).
E. Processing.
1. An application for an Overall Sign Plan shall be submitted concurrently with an application for a Development Plan for a shopping center and shall be processed in conjunction with such Development Plan application, except as provided below.
a. An application for an Overall Sign Plan may be submitted independently if the Overall Sign Plan is for an existing shopping center and the processing of a new or revised Development Plan is not required.
2. Review authority.
a. The review authority for the application for the Development Plan for the shopping center shall be the review authority for the application for the Overall Sign Plan.
b. The review authority for an application for an Overall Sign Plan submitted in compliance with Subsection 1.a, above, shall be the Zoning Administrator.
3. After receipt of an application for an Overall Sign Plan, the Department shall review the application in compliance with the requirements of the California Environmental Quality Act.
4. The Overall Sign Plan shall be subject to Design Review in compliance with Section 35.82.070 (Design Review).
a. The Board of Architectural Review shall provide a recommendation to the review authority on:
(1) The effect of the proposed Overall Sign Plan on:
(a) The various parts of and commercial enterprises within the shopping center.
(b) The streets and properties surrounding the shopping center.
(c) The overall continuity of design and signs within the shopping center.
(2) The number, type, height, location, size, design, color, materials, and lighting of signs contained within the Overall Sign Plan.
b. If the area of menu boards for drive-through restaurants, under canopy signs, or wall signs, or the area, height, or number of freestanding signs is proposed to be in excess of that otherwise allowed in compliance with this Development Code, then the Board of Architectural Review shall make specific recommendations to the review authority on any such modification.
5. The review authority shall hold at least one noticed public hearing on the requested Overall Sign Plan and approve, conditionally approve, or deny the request. The review authority shall consider the effect of the proposed Overall Sign Plan upon:
a. The various parts of and commercial enterprises within the shopping center.
b. The streets and properties surrounding the shopping center.
c. The overall continuity of design and signs within the shopping center.
6. Notice of the hearing shall be given and the hearing shall be conducted in compliance with Chapter 35.106 (Noticing and Public Hearings).
a. In addition to mailed notice required in compliance with Chapter 35.106 (Noticing and Public Hearings) notice shall also be mailed a minimum of 10 days prior to the public hearing to all tenants within the shopping center.
7. The action of the review authority is final subject to appeal in compliance with Chapter 35.102 (Appeals).
F. Findings required for approval. If an Overall Sign Plan includes any modifications in compliance with Subsection C. (Allowed modifications) above, then the Overall Sign Plan application shall be approved or conditionally approved only if the review authority first makes all of the following findings, as applicable:
1. Freestanding signs. The proposed area, height, or number of freestanding signs is architecturally harmonious in relation to the size and location of the shopping center.
3. Under-canopy signs. The proposed area of the under-canopy sign is architecturally harmonious in relation to the size and location of the building area occupied by the enterprise proposing the sign.
4. Wall signs.
a. The proposed area of the wall sign is architecturally harmonious in relation to the size and location of the structure on which it will be placed.
b. The proposed area of the wall sign is architecturally harmonious in relation to the size and location of the area on which the structure is constructed.
Friday, June 10, 2011
TTB Streamlines Cola Review Process
In an effort to streamline the COLA application process and use their resources more efficiently, the TTB has announced that they will no longer evaluate labels for legibility and type size requirements. Alcoholic beverage industry members will be required to continue to comply with the current regulations; however the TTB will not review labels for type size, characters per inch or contrasting background. More information can be found in the TTB industry circular Number 2011-04 at http://ttb.gov/industry_circulars/archives/2011/11-04.html.
This does not mean that your COLAs will be approved any faster, as it appears to be still taking in excess of 30 days to get your COLA reviewed by the TTB.
This does not mean that your COLAs will be approved any faster, as it appears to be still taking in excess of 30 days to get your COLA reviewed by the TTB.
Wednesday, March 23, 2011
HR 1161
It seems that everywhere you turn these days, people are fighting and arguing over entitlements. HR 1161 is a perfect example. This bill is sponsored by the alcoholic beverage wholesalers and would allow states to shut down out of state wineries from shipping directly to consumers, while allowing in state wineries to ship to consumers. In my opinion, this is a battle over their belief that they are entitled to protection of their government enforced monopoly on a distribution network. One that exempts local winery shipments to consumers, because their lobbyists tell that they will never get support for that in the state legislatures.
First, do not let anyone tell you that this bill has anything to do with protecting individuals from receiving alcohol.(I think they actually had the guts to call it the Care Act.) The only thing that has changed on that front is that the Supreme Court has ruled that you cannot allow in state wineries to ship wine to consumers and then ban out of state wineries from shipping wine to consumers. If there actually was a problem with direct shipment of wine, both in state and out of state shipments can be shut down right now. This is what Utah does, and so do nine other states.
Second, I do not have a problem with distributors. They provide a service to wineries that is not going away any time soon. In fact, I wish that there were more distributors, as I believe that they do an excellent job of getting wines into retail storesa nd restaurants throughout the country. Most small to midsize wineries do not have the ability to market their wines on a national level and would never reach these consumers in their local stores without a distribtor to help them.
What I can't stand is that the distributors feel entitled to protection of this plan from direct wine shipments to consumers. In many ways, it is similar to so many other examples of entitlements. We hear about Teacher's entitled to tenure after only a few years of teaching. I regularly hear about citizens feeling entitled to tell people what they can do with their property and what types of businesses they can rent that property to, even though the zoning law allows the owners proposed use. Finally, our President, adn the majority of the Republicans in Congress, feel entitled to unilaterally decide to enter a civil war in Libya without so much as as a real explanation to the Country, which I find incredibly disappointing as one of his supporters. (This is the best post I have read on the Lybia situation. http://www.colonyinc.com/chairmanscornerblog.htm?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tombarrackchairmanscorner+%28Tom+Barrack+-+Chairman%27s+Corner%29&utm_content=Google+Reader#spicecontinues)
Going back to our friends the Wholesalers and HR 1161, I would urge everyone to write their Congressmen and ask them not to support this bill. There is no moral basis for the entitlement program urged by the wholesalers. Further, they are not going away and still serve a very important role in the marketing and sale of wine. If we create this entitlement program, we set up yet another lobbying group that will distract our representatives from doing their jobs.
First, do not let anyone tell you that this bill has anything to do with protecting individuals from receiving alcohol.(I think they actually had the guts to call it the Care Act.) The only thing that has changed on that front is that the Supreme Court has ruled that you cannot allow in state wineries to ship wine to consumers and then ban out of state wineries from shipping wine to consumers. If there actually was a problem with direct shipment of wine, both in state and out of state shipments can be shut down right now. This is what Utah does, and so do nine other states.
Second, I do not have a problem with distributors. They provide a service to wineries that is not going away any time soon. In fact, I wish that there were more distributors, as I believe that they do an excellent job of getting wines into retail storesa nd restaurants throughout the country. Most small to midsize wineries do not have the ability to market their wines on a national level and would never reach these consumers in their local stores without a distribtor to help them.
What I can't stand is that the distributors feel entitled to protection of this plan from direct wine shipments to consumers. In many ways, it is similar to so many other examples of entitlements. We hear about Teacher's entitled to tenure after only a few years of teaching. I regularly hear about citizens feeling entitled to tell people what they can do with their property and what types of businesses they can rent that property to, even though the zoning law allows the owners proposed use. Finally, our President, adn the majority of the Republicans in Congress, feel entitled to unilaterally decide to enter a civil war in Libya without so much as as a real explanation to the Country, which I find incredibly disappointing as one of his supporters. (This is the best post I have read on the Lybia situation. http://www.colonyinc.com/chairmanscornerblog.htm?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tombarrackchairmanscorner+%28Tom+Barrack+-+Chairman%27s+Corner%29&utm_content=Google+Reader#spicecontinues)
Going back to our friends the Wholesalers and HR 1161, I would urge everyone to write their Congressmen and ask them not to support this bill. There is no moral basis for the entitlement program urged by the wholesalers. Further, they are not going away and still serve a very important role in the marketing and sale of wine. If we create this entitlement program, we set up yet another lobbying group that will distract our representatives from doing their jobs.
Sunday, March 6, 2011
AB No. 1356 - Tasting Room Regulation
In a move to require Tasting Rooms to be treated more like bars and nightclubs, Assembly Member Mike Eng has proposed AB No. 1356. This bill is being sponsored by Santa Barbara County. It will require that any application for an off-site tasting room be denied, if it would result in an undue concentration of licenses.
In fact, many tasting rooms are located in rural communities in and around the wine country. As an example, Los Olivos contains more than 20 tasting rooms and has become known for its tasting room row on Grand Ave. This group of tasting rooms would constitute an undue concentration, as we have only 800 people in this town.
If denied due to undue concentration of licenses, a Winery could request a finding of Public Convenience of Necessity (PCN) from the local governing jurisdiction. This is the same procedure that bars and nightclubs go through now. This proposed law would provide a powerful tool to communities that want to restrict the number of off-site tasting rooms that can open in the small communities through out wine country.
Link to the proposed law: http://www.aroundthecapitol.com/Bills/AB_1356/20112012/
In fact, many tasting rooms are located in rural communities in and around the wine country. As an example, Los Olivos contains more than 20 tasting rooms and has become known for its tasting room row on Grand Ave. This group of tasting rooms would constitute an undue concentration, as we have only 800 people in this town.
If denied due to undue concentration of licenses, a Winery could request a finding of Public Convenience of Necessity (PCN) from the local governing jurisdiction. This is the same procedure that bars and nightclubs go through now. This proposed law would provide a powerful tool to communities that want to restrict the number of off-site tasting rooms that can open in the small communities through out wine country.
Link to the proposed law: http://www.aroundthecapitol.com/Bills/AB_1356/20112012/
Friday, February 11, 2011
Thanks Robert Parker
Many of us have heard the news that Robert Parker is no longer going to be reviewing California wines. As a person that makes a goog portion of his living working with California wineries, I want to thank Mr. Parker for his incredible support. I am not sure that there is any single person that brought greater recognition to such a broad array of California wines as Mr. Parker.
That being said, Mr. Parker is just one man with a particular pallete. There are many serious wine drinkers that disagree with his taste and the particular styles of wine that he lauded high scores upon. However, no other critic or publication came close to his sway over the high end wine buyer.
Without a doubt, many wineries created wines specifically for these scores. This is neither Mr. Paker's fault nor do I blame the wineries. For both Mr. Parker and the wineries that got the high scores, this made economic sense. While a vast wave of consumers enjoyed the styles of wine that Mr. Parker lauded, many wines did not fit this style and some consumers palletes did not match with his.
With the changing of the guard at e bob, it is a great opportunity for wineries, other critics and wine drinkers. It is an opportunity for wineries to step back from having to create wines for Mr. Parker and to create wines that may be more appropriate for the vineyards and the type of grapes that grow there. It is an opportunity for critics to revise their expectations and to allow for this variation. Finally, it is a chance for wine drinkers to seek out critics that have a similar pallete to their own and to rely upon good local wine shops, online retailers and their favorits wineries to source these types of wines.
Thank you Mr. Parker for doing so much for California wine, for your love of wine in general and for brining so many great wines to the attention of the world. We will miss you, but change is good, and I look forward to the industry's and the consumers' next phase.
That being said, Mr. Parker is just one man with a particular pallete. There are many serious wine drinkers that disagree with his taste and the particular styles of wine that he lauded high scores upon. However, no other critic or publication came close to his sway over the high end wine buyer.
Without a doubt, many wineries created wines specifically for these scores. This is neither Mr. Paker's fault nor do I blame the wineries. For both Mr. Parker and the wineries that got the high scores, this made economic sense. While a vast wave of consumers enjoyed the styles of wine that Mr. Parker lauded, many wines did not fit this style and some consumers palletes did not match with his.
With the changing of the guard at e bob, it is a great opportunity for wineries, other critics and wine drinkers. It is an opportunity for wineries to step back from having to create wines for Mr. Parker and to create wines that may be more appropriate for the vineyards and the type of grapes that grow there. It is an opportunity for critics to revise their expectations and to allow for this variation. Finally, it is a chance for wine drinkers to seek out critics that have a similar pallete to their own and to rely upon good local wine shops, online retailers and their favorits wineries to source these types of wines.
Thank you Mr. Parker for doing so much for California wine, for your love of wine in general and for brining so many great wines to the attention of the world. We will miss you, but change is good, and I look forward to the industry's and the consumers' next phase.
Tuesday, February 8, 2011
Mediation in the Wine Business
I really want to echo the sentimenets of a recent Wines & Vines article. http://www.winesandvines.com/template.cfm?section=news&content=83772&htitle=Mediation%20for%20Wine%20Industry%20Disputes The winery and vineyard industry has undergone some dramatic changes in the past few years. With the demand for grapes and bulk wine dropping, there have been a handful of winery failures and a lot of reductions in volume. This has invetiably lead to some disputes.
As a lawyer, I often counsel my client's to try and resolve their claims as quickly as possible. If you have not taken part in litigation, it is often eye opening as to both the sheer cost and the time that it takes. While it is often the only sure way to get a resolution, it is generally not a productive use of time and money.
If you find yourself with a handful of disputes with your suppliers or customers, try and resolve these matters before they wind up in litigation. If you can't, try and get them into a mediation as soon as you can.
As a lawyer, I often counsel my client's to try and resolve their claims as quickly as possible. If you have not taken part in litigation, it is often eye opening as to both the sheer cost and the time that it takes. While it is often the only sure way to get a resolution, it is generally not a productive use of time and money.
If you find yourself with a handful of disputes with your suppliers or customers, try and resolve these matters before they wind up in litigation. If you can't, try and get them into a mediation as soon as you can.
Friday, January 14, 2011
Prediction for 2011 - Mr. Toads Wild and Crazy Ride
I am still reading all of the predictions about the wine industry for 2011. The only good thing that I can say about them so far is that there are at least more of them than my already broken New Years Resolutions. As you can tell by the title, I am predicting some massive instability and here is why.
In the last month, I have watched as yet another billionare has swooped into the California wine market and paid top dollar for an "almost" blue chip winery. I say almost, because, while the winery has a great reputation, it is not from an area that most would consider to be blue chip on the world market.
In the meantime, I have watched as it appears our large corporate wineries are basically dumping their Australian assets. I realize that some of this has to do with the Ausie dollar and some with unfortunate marketing and style of many Aussie Shiraz's. However, a few years back, everyone was worried that these Aussie wines would rule the market place, and this is not the only baffling issue.
On the local scene (Central Coast of California), I have watched retailers and wineries dive head long into discounting wine.(My inbox yesterday contained an offer for six single vineyard pinots which claim to retail for $230 on sale for $99 with tax and shipping included.) I have seen incredible producers shift production away from the high end vineyard designated wines to create wonderful and affordable blends. Clearly, the price pressure being felt by the average winery is intense.
Finally, I was shocked when I read this morning about the sale of a Bourdeaux Chateau for a record high sale price. I have some knowledge of Bourdeaux wines and have been lucky enough to drink a few, but I am not even close to the level of an aficianodo. Thus, maybe I have simply missed all of the hub bub about this Chateaus in the past, but I had never heard of it. While I do not doubt that it produces nice wines, a little known Chateau sold for a record price.
"Its vines today cover 4.7ha, with a further 3 hectares of parkland. This means the sale price equates to €3.8m per hectare – which according to local paper Sud Ouest is the highest amount ever paid per hectare for a vineyard in Bordeaux, even taking into account that some of that price will have been paid for the adjoining park, and attractive 19th century chateau." I realize that the Far East Market is driving crazy prices for high end Bourdeaux wines, but I still do not get this purchase. I think we are in for a new era.
Our World economy seems to be seperating between the top and the bottom. If you are considered a rare luxury good, there appears to be strong demand and no pricing pressure. However, below that, there appears to be massive pressure for value. This pressure is supported by the fact that the wine market is awash in quality wines from all over the world at very reasonable price points.
When new owners pay records prices, I have to assume that they are shooting to be in the luxury brand. Otherwise, I just do not see the margins for those in the value catagory that would justify these record prices. Justin and Chateau Carmes may prove their purchasers right, and they may transcend the boundary between value and luxury status, I simply do not know how much room for growth exists in the luxury arena. However, I no longer believe that simply putting Napa on the label or Haut Brion will guaruntee you that status. As the title, inspired by a recent trip to Disneyland with my children states, I think that this is part of the wild ride that the wine industry is about to take. In the meantime, I am enjoying picking up some wonderful wines at prices that seem very reasonable.
Cheers
Matt
In the last month, I have watched as yet another billionare has swooped into the California wine market and paid top dollar for an "almost" blue chip winery. I say almost, because, while the winery has a great reputation, it is not from an area that most would consider to be blue chip on the world market.
In the meantime, I have watched as it appears our large corporate wineries are basically dumping their Australian assets. I realize that some of this has to do with the Ausie dollar and some with unfortunate marketing and style of many Aussie Shiraz's. However, a few years back, everyone was worried that these Aussie wines would rule the market place, and this is not the only baffling issue.
On the local scene (Central Coast of California), I have watched retailers and wineries dive head long into discounting wine.(My inbox yesterday contained an offer for six single vineyard pinots which claim to retail for $230 on sale for $99 with tax and shipping included.) I have seen incredible producers shift production away from the high end vineyard designated wines to create wonderful and affordable blends. Clearly, the price pressure being felt by the average winery is intense.
Finally, I was shocked when I read this morning about the sale of a Bourdeaux Chateau for a record high sale price. I have some knowledge of Bourdeaux wines and have been lucky enough to drink a few, but I am not even close to the level of an aficianodo. Thus, maybe I have simply missed all of the hub bub about this Chateaus in the past, but I had never heard of it. While I do not doubt that it produces nice wines, a little known Chateau sold for a record price.
"Its vines today cover 4.7ha, with a further 3 hectares of parkland. This means the sale price equates to €3.8m per hectare – which according to local paper Sud Ouest is the highest amount ever paid per hectare for a vineyard in Bordeaux, even taking into account that some of that price will have been paid for the adjoining park, and attractive 19th century chateau." I realize that the Far East Market is driving crazy prices for high end Bourdeaux wines, but I still do not get this purchase. I think we are in for a new era.
Our World economy seems to be seperating between the top and the bottom. If you are considered a rare luxury good, there appears to be strong demand and no pricing pressure. However, below that, there appears to be massive pressure for value. This pressure is supported by the fact that the wine market is awash in quality wines from all over the world at very reasonable price points.
When new owners pay records prices, I have to assume that they are shooting to be in the luxury brand. Otherwise, I just do not see the margins for those in the value catagory that would justify these record prices. Justin and Chateau Carmes may prove their purchasers right, and they may transcend the boundary between value and luxury status, I simply do not know how much room for growth exists in the luxury arena. However, I no longer believe that simply putting Napa on the label or Haut Brion will guaruntee you that status. As the title, inspired by a recent trip to Disneyland with my children states, I think that this is part of the wild ride that the wine industry is about to take. In the meantime, I am enjoying picking up some wonderful wines at prices that seem very reasonable.
Cheers
Matt
Monday, January 10, 2011
Gabrielle Giffords Shooting
This post is seemingly way off topic to the world of wine law. However, with the fact that wineries/retailers and distributors are in a political dispute over HR 5034, I for one think that anyone involved in politics needs to sit back and think about the shootings in Arizona. The events in Arizona are a tragedy that will be made worse, if we do not learn from them.
In reading about the events, I wanted to quote from Marty Kaplan's blog, as it resonated with me for two reasons. "If you're worried that violent video games may make kids prone to bad behavior; if you think that misogynic and homophobic rap lyrics are dangerous to society; if you believe that a nipple in a Superbowl halftime show is a threat to our moral fabric - then surely you should also fear that the way public and media figures have framed political participation with shooting gallery imagery is just as potentially lethal." http://www.huffingtonpost.com/marty-kaplan/gabrielle-giffords-shooting_b_806232.html Marty is specifically refering to the Palin Pac ads with gunsights on Ms. Giffords district, and the fund raising efforts of Ms. Giffords opponent that included the opportunity to shoot a fully automatic M 16. This resonated with me for two reasons. The first is that rhetoric does matter. The second is that there is no way to correlate these events with any rhetoric, as opposed to the mental imbalance of the shooter. Finally, I am not advocating the we regulate anybody but ourselves in the face of this tragedy.
When we look back at history, we see the strong effect that rhetoric has had. I do not think anyone in England during the World War II era would doubt the part that Winston Churchills speaches played in keeping England strong and unified. The civil rights and politics of the 60s immediately bring up images and language of Martin Luther King and John F. Kennedy in my mind. Words have power, and I am not just saying that as a lawyer.
Back on the issues of winelaw, I have not seen any sort of incendiary language used to describe the battle between wholesalers and those that wish to ship wine from out of state. However, I do know that the two sides are very polarized and assume that both sides want to ruin the other. Last fall, I attended an event in Chicago, where I was very excited to see a debate on HR 5034, as I know that I have strong opinions about the motivations of the two sides.(The true debate did not occur, because the representative for the wholesalers could not make it.) Going forward, we need to remain mindful of the force and affect our choice of lanuage may have and continue to remember these events in Arizona. We need to remember that we can disagree on issues, without using the symbolism and rhetoric that links the issues with war. Finally, we do not need to waste any time trying to change anyone but ourselves.
God Bless and keep all of those harmed in the recent shootings in Arizona.
In reading about the events, I wanted to quote from Marty Kaplan's blog, as it resonated with me for two reasons. "If you're worried that violent video games may make kids prone to bad behavior; if you think that misogynic and homophobic rap lyrics are dangerous to society; if you believe that a nipple in a Superbowl halftime show is a threat to our moral fabric - then surely you should also fear that the way public and media figures have framed political participation with shooting gallery imagery is just as potentially lethal." http://www.huffingtonpost.com/marty-kaplan/gabrielle-giffords-shooting_b_806232.html Marty is specifically refering to the Palin Pac ads with gunsights on Ms. Giffords district, and the fund raising efforts of Ms. Giffords opponent that included the opportunity to shoot a fully automatic M 16. This resonated with me for two reasons. The first is that rhetoric does matter. The second is that there is no way to correlate these events with any rhetoric, as opposed to the mental imbalance of the shooter. Finally, I am not advocating the we regulate anybody but ourselves in the face of this tragedy.
When we look back at history, we see the strong effect that rhetoric has had. I do not think anyone in England during the World War II era would doubt the part that Winston Churchills speaches played in keeping England strong and unified. The civil rights and politics of the 60s immediately bring up images and language of Martin Luther King and John F. Kennedy in my mind. Words have power, and I am not just saying that as a lawyer.
Back on the issues of winelaw, I have not seen any sort of incendiary language used to describe the battle between wholesalers and those that wish to ship wine from out of state. However, I do know that the two sides are very polarized and assume that both sides want to ruin the other. Last fall, I attended an event in Chicago, where I was very excited to see a debate on HR 5034, as I know that I have strong opinions about the motivations of the two sides.(The true debate did not occur, because the representative for the wholesalers could not make it.) Going forward, we need to remain mindful of the force and affect our choice of lanuage may have and continue to remember these events in Arizona. We need to remember that we can disagree on issues, without using the symbolism and rhetoric that links the issues with war. Finally, we do not need to waste any time trying to change anyone but ourselves.
God Bless and keep all of those harmed in the recent shootings in Arizona.
Wednesday, January 5, 2011
Getting Paid for Grapes
I hear it all the time; the wine industry is so small that people can still make agreements on a handshake. They go on to say that reputation is so important in this industry and there is no need to worry. However, I also get calls every year at about this time from growers wondering how they can enforce their sales agreements.
Grapes Sales Contracts do not need to be lengthy, but they do need to be more than a handshake. The industry is growing rapidly and the economy has put a big strain on wineries ability to pay. Thus, more and more growers are finding themselves in a position where they have to enforce these agreements.
In California, you can enforce a "Growers Lien" that is an automatic lien placed upon the grapes sold. This will allow you to go to court and seize the wine made from your grapes or the funds received from the sale of the grapes. The growers lien is not canceled by the filing of a bankruptcy and will give the grower priority over all but wages or a warehouse lien claims.
The Growers lien is in addition to the normal contract remedies. If the winery has the funds, a grower could also recover damages beyond the value of the wine, as this economy has left bulk wine worth less then many grape contracts, and attorney fees if provided for in the agreement. This is one very strong reason to have a grape sales agreement.
A grower can also file a complaint with the California Department of Food and Agriculture. The CDFA market enforcement branch will investigate your complaint and issue a finding. The CDFA can also provide arbitration proceedings for the parties. The CDFA can utilize license revocation and/or criminal proceedings to enforce your sales agreement.
While we may all wish that our tight knit industry will insure that all parties comply with their agreements, this is not always the case. Further, the economy in some instances has simply left parties unable to comply with their agreements. Good grape purchase agreements and knowing your rights as a grower are essential.
Grapes Sales Contracts do not need to be lengthy, but they do need to be more than a handshake. The industry is growing rapidly and the economy has put a big strain on wineries ability to pay. Thus, more and more growers are finding themselves in a position where they have to enforce these agreements.
In California, you can enforce a "Growers Lien" that is an automatic lien placed upon the grapes sold. This will allow you to go to court and seize the wine made from your grapes or the funds received from the sale of the grapes. The growers lien is not canceled by the filing of a bankruptcy and will give the grower priority over all but wages or a warehouse lien claims.
The Growers lien is in addition to the normal contract remedies. If the winery has the funds, a grower could also recover damages beyond the value of the wine, as this economy has left bulk wine worth less then many grape contracts, and attorney fees if provided for in the agreement. This is one very strong reason to have a grape sales agreement.
A grower can also file a complaint with the California Department of Food and Agriculture. The CDFA market enforcement branch will investigate your complaint and issue a finding. The CDFA can also provide arbitration proceedings for the parties. The CDFA can utilize license revocation and/or criminal proceedings to enforce your sales agreement.
While we may all wish that our tight knit industry will insure that all parties comply with their agreements, this is not always the case. Further, the economy in some instances has simply left parties unable to comply with their agreements. Good grape purchase agreements and knowing your rights as a grower are essential.
Saturday, December 18, 2010
ABC Minor Decoy Grants Are Back On The Central Coast
"The California Alcoholic Beverage Control (ABC) today announced that it has been awarded a $500,000 Minor Decoy and Shoulder Tap Grant to combat underage drinking in California. " What does this mean for Central Coast Wineries? Well, according the the imbiblog ( http://strikeandtechel.com/imbiblog/) this money will be awarded to local law enforcement and the stings will begin to occur starting February 1, 2011. That gives all employers the month of January to make sure that their employees have adequate training to spote minors and decoys.
Instructional Tasting Licenses
Effective January 1, 2011, off-sale retail licenses will be able to apply for a type 86 Instructional Tasitng License from the California Alcoholic Beverage Commission. This will allow the instructional tasting of alcoholic beverages by certain suppliers on premises. The tastings will still need to be conducted by a qualified supplier in a manner similar to those presently permitted for consumer instruction. More information can be found about these licenses in the recent ABC advisory. http://www.abc.ca.gov/trade/Advisory-Type%2086.pdf
Sunday, December 12, 2010
Central Coast Regional Water Quality Control Board Ag Order
The Central Coast Regional Water Quality Control Board has proposed a new ag order. The key aspect of this new order is that it will do away with or limit waivers and group monitoring in favor of individual monitoring. Along with this, comes a confusing leveled of tiered monitoring that will attempt to place the most stringent monitoring restrictions on the largest and most problematic water users. None of this is sitting well with the agricultural community.
Ag Working Group, led by the California Farm Bureau Federation is proposing its own Ag Order in an effort to create a less onerous system. Numerous members of the agricultural community have expressed concerns over the lack of input that they have had so far and that the RWQCB does not understand their issues.
For now, the waiver program which has been in place for the past few years has been continued. However, it is apparent that some level of additional regulation will be placed upon central coast irragators.
Ag Working Group, led by the California Farm Bureau Federation is proposing its own Ag Order in an effort to create a less onerous system. Numerous members of the agricultural community have expressed concerns over the lack of input that they have had so far and that the RWQCB does not understand their issues.
For now, the waiver program which has been in place for the past few years has been continued. However, it is apparent that some level of additional regulation will be placed upon central coast irragators.
Winery and Vineyard Land Use Issues
Land Use: Land Use: the pattern of construction and activity permitted on ones land. California land use laws divide the state into a patchwork of zones; commercial, residential, industrial and agricultural zones. Each of these zones has its own set of differing rules and regulations with regard to permissible land uses. Wineries and vineyards are frequently located in agricultural zones sometimes referred to as the AG Preserve. Additionally, along the Central Coast, wineries and tasting rooms may be located in commercial or industrial zones. The ability to sight a winery or vineyard on your property will defer depending upon the zone in which it is located.
Issues Surrounding Land Use Regulations
• Can I plant a vineyard?
• Can I site my winery on this property?
• Can I build one or more homes?
• Can I have a tasting room or do onsite sales?
• Can I host events such as weddings?
• Is the property under a Williamson Act Contract?
• Do I have adequate access or easements to my property?
• Do I need permits to build structures or roads?
• How many Certificates of Compliance (CC) does my property have?
• Can I divide my property?
• What is the process to obtain another CC for my property?
Critical Land Use Issues
1. Three Tiered Permitting for Wineries, Tasting Rooms and Events
Wineries are permitted in the Agricultural zones of Santa Barbara County. Since July of 2004, the permit process for the siting of wineries has been streamlined. This process has become know as the Three Tiered Process. This is because it divides wineries into three tiers or categories based upon their size. For the first two tiers of facilities, owners are no longer required to go in front of the planning commission.
Tier I Winery: For a Tier I winery, the county staff is directed to give a permit to wineries that have no tasting rooms and produce fewer than 20,000 cases of wine in less than 20,000 square feet of building space. Wineries within this category are eligible to hold four special events with up to 150 attendees. However, wineries within all of these tiers are still regulated by the planning and development land use plan requirements. These require the obtaining of a Land Use Permit prior to building a winery. Further, the issue of compliance with any overlying Uniform Rules for Agricultural Preserves will be addressed below.
Tier II Winery: A Tier II winery is a winery producing between 20,000 and 50,000 cases. Tier II wineries must apply to the county zoning administrator for a permit, as well as obtaining the same Land Use Permit and complying with applicable Agricultural Preserve rules. This permit will allow for 8 special events per year and a tasting room of up to 400 square feet or within an area of the winery structure that is no more than 10% of the winery structure.
Tier III Winery: A Tier III winery produces more than 50,000 cases per year. Tier III wineries must submit a development plan to the Planning Commission. A tasting room may be included. These wineries would be allowed to hold 12 events with up to 200 people. They can seek conditional use permits for up to 40 events per year. Note that they are only eligible and not entitled.
2. On-Site & Internet Sales in Santa Barbara County
Sales of wine produced at the winery or by the winery owner are allowed in the tasting rooms. Further, the sale of souvenirs, clothing bearing the wineries logo and other wine related products are allowed. Along with the sale of wine over the internet, these on site sales of winery products can be some of the most profitable, because they remove the middle man between the winery and the consumer.
The Supreme Court recently decided the case of Granholm v. Heald. In this decision, the Court struck down the laws of the states of Michigan and New York, due to their restrictions on the direct sale of wine by out of state producers. While this landmark decision bodes well for winemakers hoping to sell directly to all states, it does not remove the ability of individual states to regulate the direct sale of wine. Adequate and up to date analysis of each states regulations are required, prior to attempting to ship wine directly to purchasers in other states. This can often be found on the website for the Wine Institute. http://www.wineinstitute.org/
3. Williamson Act Contracts
In order to reduce taxes upon their lands, many owners of agriculturally zoned lands enter into land conservation contracts regulated by state legislation named the Williamson Act. These contracts require that the lands use be compatible with its agricultural surroundings and limit the development of the land under the Uniform Rules for Agricultural Preserves. If a property is under a Williamson Act Contract, it will subject to the Agricultural Preserve Rules, as well as the agricultural zoning rules.
4. Dwellings under the Santa Barbara County Agricultural Preserve Rules
Although a few vineyards may be located within incorporated cities, most are located in the unincorporated county areas. Because these areas are also predominantly agricultural lands, the land is often under an agricultural preserve contract or Williamson Act Contract. The siting of dwellings on land covered by an agricultural preserve contract is subject to a host of limitations.
A principal dwelling is the primary inhabited structure and may generally be built upon the land. However, the dwelling, the access roads and any landscaping may not occupy more than 2 acres or, if smaller, 3% of the property. These 2 acres are also considered the building envelope.
In lots bigger than 40 acres, a residential agricultural unit may be allowed. While a residential agricultural unit may not be sold, it can consist of another free standing structure used for rental income or housing of family or employees. On some properties of more than 100 acres, this unit may be placed outside of the building envelope.
Owners are permitted to build agricultural employee housing. This is subject to the issuance of a land use permit or conditional use permit. Further, the owner must affirm that the housing will be occupied by agricultural employees, and must be removed or converted to another permitted use, if it is not used to house agricultural employees.
5. Governing Entities
Santa Barbara County Planning and Development:
South Coast North County
123 East Anapamu St. 624 W. Foster Rd.
Santa Barbara, CA 93101 Santa Maria, CA 93455
Phone: (805) 568-2000 Phone: (805) 934-6250
Valley Plan Advisory Committee:
Santa Barbara County Supervisors:
Board of Architectural Review: 123 East Anapuma St., Santa Barbara, CA 93101
Phone (805) 568-2000 or 934-6250
Planning Commission: Cintia Mendoza, Board Assistant Supervisor
(805) 568-2058
California State Regional Water Quality Control Board: (805) 549-3147
Army Corp of Engineers: (805) 641-1127
CA Department of Fish & Game: (310) 590-5132
Public Works: Roads Division
123 E. Anapamu Street, Santa Barbara, CA 93101. (805) 568-3030.
Public Works: Flood Control, (805) 568-3440.
Environmental Health Services: 120 Cremona Drive, Suite C, Goleta, CA 93117. (805) 681-4900.
Air Pollution Control District: 26 Castilian Dr., Suite B-23,
Goleta 93117.
(805) 961-8800.
County Fire Department: 4410 Cathedral Oaks Road,
Santa Barbara, CA 93110.
(805) 681-5528.
Park Department: 610 Mission Canyon Road,
Santa Barbara, CA 93105.
(805) 568-2469.
Issues Surrounding Land Use Regulations
• Can I plant a vineyard?
• Can I site my winery on this property?
• Can I build one or more homes?
• Can I have a tasting room or do onsite sales?
• Can I host events such as weddings?
• Is the property under a Williamson Act Contract?
• Do I have adequate access or easements to my property?
• Do I need permits to build structures or roads?
• How many Certificates of Compliance (CC) does my property have?
• Can I divide my property?
• What is the process to obtain another CC for my property?
Critical Land Use Issues
1. Three Tiered Permitting for Wineries, Tasting Rooms and Events
Wineries are permitted in the Agricultural zones of Santa Barbara County. Since July of 2004, the permit process for the siting of wineries has been streamlined. This process has become know as the Three Tiered Process. This is because it divides wineries into three tiers or categories based upon their size. For the first two tiers of facilities, owners are no longer required to go in front of the planning commission.
Tier I Winery: For a Tier I winery, the county staff is directed to give a permit to wineries that have no tasting rooms and produce fewer than 20,000 cases of wine in less than 20,000 square feet of building space. Wineries within this category are eligible to hold four special events with up to 150 attendees. However, wineries within all of these tiers are still regulated by the planning and development land use plan requirements. These require the obtaining of a Land Use Permit prior to building a winery. Further, the issue of compliance with any overlying Uniform Rules for Agricultural Preserves will be addressed below.
Tier II Winery: A Tier II winery is a winery producing between 20,000 and 50,000 cases. Tier II wineries must apply to the county zoning administrator for a permit, as well as obtaining the same Land Use Permit and complying with applicable Agricultural Preserve rules. This permit will allow for 8 special events per year and a tasting room of up to 400 square feet or within an area of the winery structure that is no more than 10% of the winery structure.
Tier III Winery: A Tier III winery produces more than 50,000 cases per year. Tier III wineries must submit a development plan to the Planning Commission. A tasting room may be included. These wineries would be allowed to hold 12 events with up to 200 people. They can seek conditional use permits for up to 40 events per year. Note that they are only eligible and not entitled.
2. On-Site & Internet Sales in Santa Barbara County
Sales of wine produced at the winery or by the winery owner are allowed in the tasting rooms. Further, the sale of souvenirs, clothing bearing the wineries logo and other wine related products are allowed. Along with the sale of wine over the internet, these on site sales of winery products can be some of the most profitable, because they remove the middle man between the winery and the consumer.
The Supreme Court recently decided the case of Granholm v. Heald. In this decision, the Court struck down the laws of the states of Michigan and New York, due to their restrictions on the direct sale of wine by out of state producers. While this landmark decision bodes well for winemakers hoping to sell directly to all states, it does not remove the ability of individual states to regulate the direct sale of wine. Adequate and up to date analysis of each states regulations are required, prior to attempting to ship wine directly to purchasers in other states. This can often be found on the website for the Wine Institute. http://www.wineinstitute.org/
3. Williamson Act Contracts
In order to reduce taxes upon their lands, many owners of agriculturally zoned lands enter into land conservation contracts regulated by state legislation named the Williamson Act. These contracts require that the lands use be compatible with its agricultural surroundings and limit the development of the land under the Uniform Rules for Agricultural Preserves. If a property is under a Williamson Act Contract, it will subject to the Agricultural Preserve Rules, as well as the agricultural zoning rules.
4. Dwellings under the Santa Barbara County Agricultural Preserve Rules
Although a few vineyards may be located within incorporated cities, most are located in the unincorporated county areas. Because these areas are also predominantly agricultural lands, the land is often under an agricultural preserve contract or Williamson Act Contract. The siting of dwellings on land covered by an agricultural preserve contract is subject to a host of limitations.
A principal dwelling is the primary inhabited structure and may generally be built upon the land. However, the dwelling, the access roads and any landscaping may not occupy more than 2 acres or, if smaller, 3% of the property. These 2 acres are also considered the building envelope.
In lots bigger than 40 acres, a residential agricultural unit may be allowed. While a residential agricultural unit may not be sold, it can consist of another free standing structure used for rental income or housing of family or employees. On some properties of more than 100 acres, this unit may be placed outside of the building envelope.
Owners are permitted to build agricultural employee housing. This is subject to the issuance of a land use permit or conditional use permit. Further, the owner must affirm that the housing will be occupied by agricultural employees, and must be removed or converted to another permitted use, if it is not used to house agricultural employees.
5. Governing Entities
Santa Barbara County Planning and Development:
South Coast North County
123 East Anapamu St. 624 W. Foster Rd.
Santa Barbara, CA 93101 Santa Maria, CA 93455
Phone: (805) 568-2000 Phone: (805) 934-6250
Valley Plan Advisory Committee:
Santa Barbara County Supervisors:
Board of Architectural Review: 123 East Anapuma St., Santa Barbara, CA 93101
Phone (805) 568-2000 or 934-6250
Planning Commission: Cintia Mendoza, Board Assistant Supervisor
(805) 568-2058
California State Regional Water Quality Control Board: (805) 549-3147
Army Corp of Engineers: (805) 641-1127
CA Department of Fish & Game: (310) 590-5132
Public Works: Roads Division
123 E. Anapamu Street, Santa Barbara, CA 93101. (805) 568-3030.
Public Works: Flood Control, (805) 568-3440.
Environmental Health Services: 120 Cremona Drive, Suite C, Goleta, CA 93117. (805) 681-4900.
Air Pollution Control District: 26 Castilian Dr., Suite B-23,
Goleta 93117.
(805) 961-8800.
County Fire Department: 4410 Cathedral Oaks Road,
Santa Barbara, CA 93110.
(805) 681-5528.
Park Department: 610 Mission Canyon Road,
Santa Barbara, CA 93105.
(805) 568-2469.
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