An editorial note: I try very hard as a blogger to stay apolitical. However, I do not require this of my guest bloggers. Nancy’s post expresses her personal feelings about some legislative issues affecting agriculture in Ohio and is a legitimate Opinion piece. I invite you to express your own feelings about the legislature in the comments or by contacting Nancy.

– M

–
It makes me laugh how the Wall Street Journal continually posts ads from the state of Ohio suggesting what a great state Ohio is to start a business. In 1999, we relocated from a highly successful vineyard operation in Oregon, in order to prove that great wines could be made in southern Ohio and to revitalize the area with new wineries for agritourism. We personally mentored at least five new wineries, and continue to help more.

I would like to describe several current situations regarding the Ohio Department of Agriculture and wineries, and then two other situations that reflect how they are hurting small farmers. To put finances in perspective: The Ohio wine and grape industry released its 2008 economic impact report, which finds that Ohio’s grape and wine industry has a significant impact of more than $580 million on the state’s economy.
Highlights of the report include:

• In 2008, the Ohio wine and grape industry had an economic impact of $582.8 million.
• The Ohio grape and wine industry employed more than 4,000 people in 2008, providing a payroll of $124.2 million.
• The Ohio grape and wine industry contributed an estimated $62 million back in state, local and federal tax revenue.

Situation #1: Given the fact that the Ohio wine industry contributes so much money to the economy, we are appalled at the latest overreach by the Ohio Department of Agriculture bureaucracy. There is a law on the books that allows them to inspect wineries as food production facilities, something that neither California, Oregon or other huge wine producing states do. Only wineries that wholesale their wine are subject to this annual inspection, which wineries will be charged an annual fee for, ranging from $50 to $300. Wineries that only sell retail will not be inspected. I have actually been in a winery in Ohio that only sold at retail that had dog turds on the floor. Wholesale warehouses that store wine may not be inspected (follow the distributor lobby money).

Nothing harmful to humans can live in wine. We actually had an ODA person suggest that we wash the grapes to eliminate insects, a laughable comment. There was a suggestion to use bleach to clean up black mold, a product that is well known to cause TCA taint in wine. Our only avenue for change is to change the law to exempt wineries. In the meantime, inadequately trained, probably highly paid registered sanitarians will be hitting the road and generating travel expenses to make sure that wineries have hairnets in the building. The maximum amount of money these fees could generate for the state would be $30,000, and it will be much less than that.

The claim is to protect the public, but there are no plans to take samples of wines for testing of any kind, and wineries are already highly regulated by the federal government (TTB) and local health organizations. This is just bureaucratic bloat and a waste of taxpayer money.

We cannot get a straight answer as to what part of the regulatory code will be enforced. On a conference call, I was basically told that wineries could be inspected with different criteria. And imagine if your winery is inspected in January, when everything is cleaned up, or at crush, when bees, fruit flies, etc. fill the winery.

Situation #2. We have been making Cabernet Sauvignon, Syrah, Cabernet Franc, Viognier/Roussanne and Petit Verdot for 10 years. In general these wines are in the 12%-13% alcohol range. A fine vintage from 2008 pushed them all over 14% alcohol. The federal government approves all wine labels. For free. The state of Ohio rubber stamps such labels, at an initial fee of $50 per label. Because these wines went over 14%, I was required to submit “New Label Registrations” and write a check for $250 to the state.

Situation #3: It goes beyond wineries. Last year, Harmony Hill Vineyards had a wonderful farmers market. The Ohio Department of Agriculture has now said that if you want to sell your eggs or meat at a Farmers Market, a cooler with blue ice is no longer good enough to store your food for a couple of hours. “Mechanical refrigeration” is required. So that means you load up a refrigeration, hope you can plug it in somewhere, transfer your food in the cooler, load it in the fridge, and reverse for the trip home.

We use farm fresh eggs in fining, and needed 6 dozen eggs from a small egg producer in Ripley. She is NOT allowed to deliver the eggs to us, a few miles away. We had to pick them up.

Situation #4: The Fizzleville Fair in Adams County has made home made ice cream for over 30 years. Apparently that will no longer be allowed.

So, in summary, this is a bureaucracy out of control. We need new leaders who will get out of the way and let Ohio small business do what they do best without excessive and stupid regulations. Ohio is hurting and driving small business out of Ohio, not encouraging it.

- Nancy Bentley

There was much celebrating on Dec 5, 1933, as seen in this fantastic newsreel:

You now have another reason to officially celebrate today. Get out there and drink some wine!

You see, I just got back from BlogHer, where I was disappointed in a lot of things. In particular, I was a bit floored to find all these women wanting to have sponsored posts. Now, in all fairness, it wasn't everybody, but it was enough to turn me off. In session after session, this topic came up and well, I just don't understand it.

You see, pay for post or sponsored posts mean that someone is being paid (in either product or money or both) to write a positive review post about the product. In my mind, this compromises credibility.  I simply cannot comprehend why anyone would want to do that. With that in mind, I've signed the Blog with Integrity pledge, just to reinforce the Disclaimer & Sample Policy I already have for this blog.

And just so you all know exactly where I'm coming from, here are the key points of my review policy:

I'm also a pretty big supporter of Creative Commons. That means that my blog is licensed under Creative Commons – Non Commercial. Aside from the Enquirer, to which I've granted special permission, you can use my content but you cannot edit it and you must credit me with the creation.

I use Creative Commons photos all the time. Previously I used any and all images licensed under CC, but since the Enquirer deal, I'll only use photos licensed for Commercial use. I will always provide attribution to the photographer as required under the license.

This all boils down to Don't Steal and Give Credit where Credit is Due.

Finally, you all are pretty timid in the comments, often preferring to email me. I've never really had any trouble. "Gentle readers" is a phrase that truly applies to you, and I appreciate that. But just in case, a quick reminder that we live by the Bill & Ted Rule here: Be Excellent to Each Other.

Sigh. Even if you did, apparently they didn't listen. The Alcohol Tax increase – 6% – was passed by the House and then this morning, the Senate. Now it just goes to Gov Beshear who already thinks it's a jolly good idea.

Here's the deal folks – Ky already has one of the highest alcohol taxes in the country. We pay 53% in taxes every time we buy a bottle of wine or a bottle of bourbon or beer. Now that number has been hiked to 59% and prices are going to increase.

Effects? Well, less people will cross from Ohio to buy alcohol over here. The liquor stores will feel the pain, but so will the restaurants, gas stations, and other small businesses that benefit from the influx of people.

Oh, but the 90 dry counties in Kentucky get to benefit from this tax even though they won't be feeling any of the pain.

Sorry folks, but my eloquence deserts me here. Kentucky pisses me off. I tried. I wrote every Representative and Senator. I heard back from only one. If you ask me, this is a bit of a Justice FAIL.

Ed. Note: I've updated the post to note that Kentucky currently has one of the highest tax rates in the country. I should not, by the way, have believed everything I read. Thanks to Kevin Keith for the clarification in the comments below.

We all enjoy buying wine in Kentucky, as the prices certainly can't be beat. Well, HB 166 proposes raising the liquor tax by 6%, to an overall total of 17%.  A distributor told me today that right now, before this tax increase, we are already paying 53% in taxes – whether on a bottle of wine or a bottle of beer. 53% !  That's crazy!  In fact, it's one of the highest in the nation. So imagine adding another 6% on to that. In order to make money, our favorite retailers are going to have to raise prices.

Take that one step further – a tax increase like this is going to greatly hurt all of our favorite retailers here in Northern Kentucky. Border stores, like those here and in Louisville, will feel the pain of having to raise prices. It's bad enough that everyone is being forced to raise prices here and there because the dollar is bad and imports are now more expensive. Now we're going force them to raise prices from within the state?

I've long known Kentucky's wine and liquor laws were a bit backwards and, in many cases, appear to be left over from Prohibition. Heaven knows, it's next to impossible to ship anything in or out of this state. This is just one more example of hurting ourselves and employing the 1930s-era mentality of taxing the sinners.

(Image Credit)

Let's look at coal for a minute. We don't mine coal here in Northern Ky, but we don't see the money from the coal taxes either. About half of the money from coal taxes stay in the counties that mine the coal. Do the work, reap the benefits. Representative Steve Riggs believes it should work this way with alcohol taxes as well. Last year, alcohol taxes provided $115 million in state revenue. Riggs has proposed an amendment to HB 166 that keeps the money from the tax increase in the wet counties. After all, if HB 166 passes – without the amendment – then those dry counties reap the benefits from the money we're all spending.

Of course, ideally, the bill won't pass at all. Maybe the dry counties will be so upset by the amendment that they'll vote against the bill. My fear is that they'll get rid of the amendment, pass the bill, and the dry counties will reap the benefits of my – and your – dollars. We don't want the bill to pass in any form.

There are so many other ways to raise money other than taxing something that is a) already overtaxed,  b) brings in business from neighboring states, and c) singles out certain people within the state.

Hey, I know! Why don't we build a casino in one of the buildings Columbia Sussex has bought, waiting for a casino. We're constantly losing that money to Indiana. Instead of continuing to tax the rest of us, how about finally passing a casino bill and making money that way.

I'm not really cheering on 59% in taxes on a bottle of $14 wine.

Feel free to write our local congressmen. Happily you can just send them an email – I did. You can also view the letter from Liquor Direct's Kevin Keith. Finally, you can just call our legislature at 1-800-372-7181. My own letter is after the jump.

Sal.Santoro@lrc.ky.gov

Thomas.Kerr@lrc.ky.gov

Arnold.Simpson@lrc.ky.gov

Joe.Fischer@lrc.ky.gov

alecia.webb-edgington@lrc.ky.gov

Adam.Koenig@lrc.ky.gov

Jack.Westwood@lrc.ky.gov

Here is the email I sent to all of the above (who represent Kenton, Boone, and Campbell counties). Feel free to improve upon it and change it (obviously) for your own purposes, but please, send a quick email expressing your displeasure.

Note: I received a positive and personal response almost immediately from Rep. Webb-Edgington.

Dear Representative [NAME]:

I'm writing in regards to HB 166. We already pay 53% in taxes on each individual bottle of wine. Our current taxes go to help those across the state, despite our unique dry/wet county setup. I run a high traffic regional wine blog and have done my best to make sure my readers know about this additional 6% tax that has been proposed. (Read here: http://www.wine-girl.net/2009/02/taxing-the-sinners-hb-166.html)

I feel like we're not only being punished for choosing to drink – but that we're forced to carry the rest of the state as well. Is the $115 million in current alcohol tax revenue (per the Cincinnati Enquirer) not enough?

Michelle Lentz

But one of them caught my eye today, as I’m sure my friend who sent it intended. I verified it before publishing (as all good bloggers do), so now I’m sharing.

For a while, I’ve been following the story of trying to get wine into Ky grocery stores, similar to Ohio. Having lived in Ohio for a good deal of time, I was accustomed to this. When I moved to Ky, I learned that it’s sort of a pain to go put all my groceries in the car, esp in the summer heat, and run back to the separate liquor store to buy wine. My methods changed – I started shopping at the larger stores, such as Party Town and Party Source, and making trips specifically geared towards wine and liquor.

As you can read in this article from the Louisville Courier-Journal, these types of stores aren’t at all happy with the bill. Based on my personal example, I understand why. It would definitely hurt their business. However, I know that I can always get better prices at Party Source than I can the Kroger Liquor Store. I also know that Liquor Direct, Party Town, and Party Source all have much better and broader selections in just about everything than my local Kroger liquor store. So why go to Kroger?

The argument being used by the Food & Wine Coalition is a bit weak. They say it will help sell Ky Wines. I’m not so sure about that and I think they need to change their tact. I admit that in stores like Remke, where there is a Kentucky-Proud area of the store with local products, Ky wine would get a nice feature. But I can’t exactly see that happening in Kroger or other larger chain stores.

But if this bill does past, grocery stores would get a big boost. Women are the fastest growing segment of the wine-buying market. Who does most of the grocery shopping in a family? Right, the girls. Grocery stores know that gearing the right wines towards women in their store is a boon – once you’re buying dinner, why not pick up a bottle of that Mad Housewife Cab to go with your steak?

There are other reasons, but I suspect that’s at the heart of it.

For me, well, it would occasionally just be convenient to drive right down the street and still pay less than the high prices usually (but not always) found at the local Cork and Bottle.

More information on how you can help make this happen is after the jump.

From that Email Forward I recieved (vetted, verified, and grammatically fixed by me, folks – it’s legit):

Send a "Get Active" message directly to YOUR
Kentucky House of Representatives member. Click here to visit a new "Get Active" campaign and simply enter your name,
email, and address. A pre-written email supporting a change in
Kentucky law to allow the sale of wine in food stores will be sent
directly to your legislator.

It takes less than
a minute to participate and even if you can’t recall your legislators
name, the system will send the message to your legislator based on your
address information.  (Of course, your information is NOT shared or used
outside of the Food with Wine Coalition team.)

Harmony Hill, one of our favorite Ohio wineries, is no longer shipping wine to consumers in any state due to Ohio’s new shipping laws. Post your comments and support for Harmony Hill. I find it sad that Ohio’s laws are not only hurting consumers, but hurting small winemakers in its own state.

UPDATE: Nancy Bentley, from Kinkead Ridge, posted information in the comments section of this post on how to contact your congresspeople. She also mentioned that Kinkead Ridge has stopped shipping wine as well.

Here is the letter from Harmony Hill:

Dear Friends of Harmony.
As of Monday, October 1, Harmony Hill Vineyards & Estate Winery
will no longer ship wine to consumers, in ANY State. This
regretful decision is based on a new law passed by our legislators that
bans direct shipment of out-of-state wine to Ohio consumers from wineries that
produce more than 150,000 gallons. That, alone, would not be an issue (Harmony
Hill produces less than 3000 gallons) except that the law limits the
purchase per household to no more than 24 cases.
Sec. 4303.233. No family household shall purchase more than twenty-
four cases of nine-liter bottles of wine in one year.

Our fear is the winery’s liability for shipping that illegal 25th case to
an Ohio household, since we are not able to track how much wine each
household has already purchased.

I could easily turn this into a five page email touting my opinions of
how this could have possibly happened in this day and age, but instead ask that
you check the "Legislative Alert"
link on our web site to see how many
of Ohio citizens’ rights have been rescinded by this ridiculous
legislation. I will only share one letter from a loyal Harmony Hill customer who
summarizes these limitations very well, and ask that you visit our
Legislative Alert page and form your own opinions based on what others around
the country are stating.

With regrets,
Bill & Patti

Protectionism

Recently, the Ohio Legislature enacted a law
that, depending on how it is interpreted and enforced, may effectively ban
direct sales of wine from producer to consumer, except what is bought at the
actual winery. This ban is already effecting sales both within and without the
state.  People who are in wine clubs that ship a bottle or two every month
were abruptly cut off by this legislation.  The law was enacted in near
secret and was quietly attached to a budget bill.  I think we can prudently
ask what the source of urgency was to so pass such legislation.

The Ohio Wine Producers Association is fond of passing off that the Ohio wine import ban is all about protecting Ohio jobs.  The OWPA does not specify who’s or how many.  This concept is expressed in sound bytes and other brief, unqualified, statements that imply more than they say.

For this argument to have merit, at least three things need to be considered.  First, is the assertion about jobs true or provable and does the legislation NET more jobs than it eliminates? Secondly, if the first assertion lacks enough evidence to be compelling, how can we justify the government stepping in and smashing the free market?  And lastly, is this notion of government enforced jobs protection consistent with other actions, or lack thereof, by the state?

First, I would challenge the Ohio Wine Producers Association to produce economic studies indicating what jobs have been lost because of direct shipment and where and over what period of time these jobs were lost.  I would caution them to also include an unbiased prediction of jobs lost in wineries here in Ohio because of the ban.  We already know that wineries INSIDE Ohio are now afraid to ship wine, even within the state, because of the Ohio Liquor Control Board’s ambiguous and potentially far reaching interpretations of the law.  Further, jobs will be lost as other states ban the import of Ohio wines also because of the ambiguity in the law.  And lastly, Ohio wines are on the rise in quality and national respect, can we get a handle on the potential future markets lost because of this protectionism?  I suspect the OWPA has no such studies.

Secondly, is it appropriate for the government
to step in at this stage and risk smashing the direct sales market for Ohio
wines?  Some economists believe that government interference is always
wrong and always damages the free market.  Although I have some sympathy
for that notion, I do not necessarily agree with it.  But thinking about
that does point us in an interesting direction.  The only place I think
regulation might be needed, and I think most would agree with me,  is in
the case of rogue monopolies or groups that function like monopolies.  If
we look at all sides of this debate we see that, on one side we have the Ohio
Wine Producers Association, the Beer and Wine Distributers, and retail wine
interests.  On the other side we have small Ohio farms who grow grapes and
make wine.  Clearly, this legislation was not designed to regulate
monopolies, this legislation was designed to protect monopolies.

Lastly, we need to consider if this action is
somehow consistent with other actions taken to protect Ohio jobs in the wine
industry. I cannot imagine wineries in Ohio, most of whom are small, have
lost jobs by shipments from out of state wineries directly to consumers. 
Ohio wineries use the direct sales approach to circumvent the rigid mark up
structure used if they go through the distributer-retail system.  In that
system they get perhaps 33% of what they do if they sell direct to the
consumer. Most Ohio wineries are barely surviving, they simply cannot do
so if they have to loose 66% of every sale. In fact, the direct sales
model will help our wineries as people both in Ohio and outside it try our
wines. Direct sales is a potential way for the small winery to be rewarded
for crafting excellent wine. Direct sales is a great tool to get our
fledgling wine industry to add jobs in agriculture. We know this to be possible,
for nearly a century Ohio was the number one national exporter of wine, and in
fact the American Wine Industry was founded in Cincinnati in the 1820′s by
Nicholas Longworth. Ohio could do this again because we indeed have the
climate and soil.  This could net 1,000′s of jobs if it was allowed to take
place. If our state government was interested in jobs they would take a
look at retailers who discount daily under $4 per bottle, prices that are close
to the cost of the label, cork, glass, and trucking.  Such retailers are
using wine as a loss leader, something I cannot imagine is good for jobs in
Ohio. This legislation was obviously not part of a consistent approach to
jobs protectionism at all, nor is it clear any action was needed on such an
urgent basis.

Wineries do not need our state’s interference
under the guise of “protectionism”.  The scariest words of all are “trust
me, I am from the government…”.  Wineries need the state off their backs
so they can continue to farm grapes and make excellent wine. We need to call on
our legislators to repeal the ban.

Jim Fearing
Cincinnati

We have been working diligently to insure Ohio has a fair and constitutional solution to the direct shipping issue.
Last
Tuesday June 5th, over the objections of our Senator Tom Niehaus and
Senate Finance Chair Carey, Senate President Harris attached a wine
amendment to the budget bill.

The amendment, if
implemented, will eliminate your ability to order wine from medium and
large wineries. Orders from small wineries are permitted, but with many
"only in Ohio" restrictions and such bureaucratic excess that in fact
little wine will likely be shipped.

The bill’s
amendment has been reviewed by WineAmerica, a national winery trade
organization. We were told that at least some of their recommendations
had been implemented. They were not.

The
budget bill (HB119) is due to be voted on Wednesday the 13th of June.
After that it will go to conference where changes can be made.

Now
is the time to make your views known to your elected representatives.
At a minimum, all of WineAmerica’s recommendations should be inserted
into the amendment in conference. At best, the amendment should be
pulled and submitted as standard legislation.

The
wholesalers, a few Ohio wineries, and the Senate President have
demonstrated a disregard for wine consumers and the legislative process
which should not go unchallenged.

Your Senators can be contacted using the information here.

It’s not just happening in Ohio. There are wine laws in Illinois, Indiana, and Kentucky, just to name a few, that do not favor the consumer. We actually had a wine club in California drop us last year because of our state. It’s getting harder to get the wines you want, from the the places you want, at the prices you want to pay.

Need more information for your own state? Check out FreetheGrapes.org and Wine America.