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New Rules For Oregon Wineries Are Criticized For Favoring Bigger Players

August 9, 2011

Oregon winemakers are divided over a law that sets new rules on what commercial activities they can conduct at their wineries, according to a report in Wine Spectator. The new law permits wineries to operate tasting rooms and host events on properties zoned as exclusive farm-use land. Vintners estimate that 60% of Oregon wineries are in that category. While it doesn’t affect existing wineries in non-exclusive farm-use areas, winemakers within the designated zones may have to change how they run their businesses.

Signed by Oregon Governor John Kitzhaber August 2, the measure allows wineries to conduct unlimited events, such as wine tours and tastings, and sell promotional merchandise. Wineries can also hold non-marketing events like weddings and concerts but are limited to 25 days of events annually. One stipulation is that revenue from events and merchandise cannot exceed 25% of the winery’s total on-site profits. The law also allows large wineries to have a full-service restaurant on farmland if they own at least 160 acres with 50 acres under vine, and produce 63,000 cases a year or more. The restaurant can only be open for 25 days a year unless the winery acquires a county permit as well.

Some winemakers aren’t happy with the new law. The bill establishes separate rules for wineries according to how many acres of vineyards they own, with larger wineries getting more leeway than smaller ones to host events and operate tasting rooms. “It’s making it harder for smaller wineries to establish themselves,” said Mohamad Ayoub, owner of Ayoub wines in the Dundee Hills. Wineries that own at least 15 acres of contiguous vineyards on their property can have a tasting room and host events. Those with less than 15 acres have to obtain a conditional-use permit from the county to open a tasting room and are limited to tastings by appointment only.

Sam Tannahill, co-owner of A to Z Wineworks in Dundee and president of the Oregon Wine Growers Association, is a supporter but admits that the bill isn’t perfect. “Did everybody get what they wanted? No,” he said. But winemakers may still have a chance to change the law, because rules for small and medium-size wineries expire January 1, 2014. “We’re certainly going to go back to the drawing board when the law sunsets,” said Tannahill. “I consider this a work in progress.”

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