02.06.2012  
 

New Jersey Lets In Most Wineries

Production cap bars only 146 U.S. wineries from direct shipping

 
by Jane Firstenfeld
 
New Jersey Wine Shipping
 
Last month New Jersey Gov. Chris Christie signed legislation allowing wineries to ship to customers in that state.
Trenton, N.J.—After we published last month the welcome news that New Jersey Gov. Chris Christie had signed into law the long-sought legislation allowing direct-to-consumer wine shipments from within and outside the state, one reader commented that the cost for a permit was too high. At the time, Steve Gross at California’s Wine Institute told Wines & Vines he was disappointed that the new law limited DTC shipments to wineries producing less than 250,000 gallons per year—just under 106,000 cases.

How many wineries are actually prohibited from DTC shipping under the new law? According to WinesVinesDATA, very few. None of New Jersey’s 48 wineries comes close to the production cap: The state’s largest, Tomasello Winery Inc., reports production of 65,000 cases per year. Total annual wine production in the state amounts to 227,750 cases.

In the entire United States, only 146 of 7,396 bonded and virtual wineries produce 106,000 cases or more per year. In California, these range from behemoths including 73 million case E. & J. Gallo Winery and 60 million case The Wine Group, each with dozens of brands, down to 110,000-case Renwood Winery. Seven wineries in Oregon surpass the production cap, as do nine in Washington. New Jersey neighbor New York state has six wineries too prolific to ship direct. Others are scattered about the country. The state-by-state breakdown follows:

State Wineries
Arkansas 1
California 109
Idaho 1
Illinois 1
Indiana 1
Michigan 2
Missouri 2
North Carolina 2
New Mexico 1
New York 6
Oregon 7
Pennsylvania 1
Texas 2
Vermont 1
Washington 9

Gallo has its own distribution company in New Jersey, and, although exact data are not available, a casual online search—and common sense—make it clear that most of these large producers have second-tier distribution in New Jersey, if they want it.

Even much smaller, established wineries have distribution reps in New Jersey. Jason Haas, general manager of 18,000-case Tablas Creek Vineyard in Paso Robles, Calif., commented online that the $938 annual license fee would not deter him from going for DTC shipping in the Garden State. “It’s a no brainer,” he wrote. In a subsequent phone interview, he said, “We’ll be the first in line” for the permits.

Some are priced out of new market
Ted Marks, the original commenter, owns Atwater Estate Vineyards in New York’s Finger Lakes district. He told Wines & Vines today that he still considers New Jersey’s direct-shipping fee too pricey for his budget, although Atwater does ship DTC to seven states, recently adding Illinois and Maryland—themselves relatively new to interstate DTC commerce— to its portfolio.

Texas, which was a good DTC market for Atwater, recently changed its fee scale, requiring a $1,000 bond or a three-year, $1,000 certificate of deposit from out-of-state direct shippers. Atwater declined to renew, after paying a $7.38 tax bill for the previous year, according to Marks.

Marks said Atwater sells some 80% of its 8,000-case annual production consumer direct at the tasting room. He has many loyal customers who drive up from New Jersey, and no distribution in the neighboring state. Ironically, consumers from New Jersey and Pennsylvania are Marks’ best customers outside of New York, and he cannot distribute in either state.

Only six New Jersey wineries do not have tasting rooms. Chestnut Run, a 1,000-case Pilesgrove fruit and berry wine specialist, is one. Owner Robert Clark said Chestnut Run has been making wine for six years and growing produce for almost 30. He said he campaigned for the new law and had postponed opening a tasting room until legislation went through.

He said that, as a farm winery, for an annual fee of about $100 he expects to be able to ship to his clients within New Jersey. Recognizing that each state has its own shipping requirements and fees, he plans to investigate which states might be profitable, and said he hopes to be able to ship to fans in neighboring states who visit New Jersey wine festivals each year and become enamored of his wines; he produces several “varietals” of Asian pear wines, including a bone-dry version he compared to Chardonnay. Now that he is able to ship to his customers, he is poised to expand his orchards and production.

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX ยป