Och! for Virginia Wineries

Filed in archive Wine Making on November 6, 2006

Wineries in Virginia are struggling like never before due to a Supreme Court decision which now requires them to use a wholesaler to distribute their wines.

This is tough when you consider that, really, Virginia wines are all pretty small-time operations. Most wineries are privately own and operated by small businesses.

I'm not sure I really understand the reason for this change, but her are the details from "Wineries fell the pinch:"

"The concept behind it was that we wanted to promote Virginia wines, not just Virginia wines but our wines as a whole," said King Family Vineyards owner David King.

King, also used to own VaVino on the downtown mall, says his profits shrunk after the self distribution law began on July first, forcing him to sell the wine bar. VaVino only sold Virginia wines, most of which were delivered by hand from wineries around the state. When wineries could not deliver them personally, King says it became to expensive to operate.

"It increased the costs anywhere between 30 and 40 percent overnight. That makes it very difficult economically so we took that opportunity to get out of the wine bar business," he said.

"It took it about three months to throw it all together as soon as we found out for sure the distributor law was coming down basically cutting out 90 percent of our business," said Keswick Vineyards Tasting Room Manager kris Schornberg.

Keswick Vineyards also felt the pinch from the new law. They self distributed 90 percent of their wines to area restaurants and grocery stores. When the law went into affect, it forced them to change their philosophy. In response, they opened up a new tasting room to try and counteract the profit losses.

"It was either build the tasting room now or close. Those were pretty much our options," Schornberg said.

Their business model has now reversed. Keswick now sells most of their wines out of their tasting room with only a small percentage going to local establishments through a wholesaler. The philosophy has worked so far, but everyone says the future is unclear.