Virginia’s 110 wineries have lost the right to sell their products directly to retailers such as restaurants, wine shops and grocery stores, the Richmond Times-Dispatch has reported. A letter from the state ABC board last week confirmed that the wineries, after a lengthy lobbying and legal duel with wine wholesalers, were limited to selling their wares directly from their farms. Reports Greg Edwards:
The loss of self-distribution is a bitter turn for the wineries. Some say the loss could end what has become a welcome success story for Virginia agriculture — three decades of growth by the state’s wine industry.
The regulatory issues are too complex to summarize here. I would refer readers to Edwards’ story. But the bottom line is this: The wine-and-beer wholesalers have upheld their state-sanctioned monopoly control over wine distribution in Virginia, preserving their monopolistic profit margins. The most immediate losers are the small wineries who can’t afford to hire wholesale distributors to handle their products. Other losers are wine lovers, such as myself, who enjoy buying local wines and now will be faced with a diminished selection.
If Virginia wineries go out of business, the roster of losers will expand to include everyone who appreciates the beauty of Virginia’s farmscapes. Farming is an endangered activity in Virginia. When farmers give up on farming, their land generally reverts to woodland or gets sold to developers. A consequence of upholding the wholesalers’ monopoly could be the loss of more picturesque fields, meadows, fences and farmsteads.
“There is no winner except the wholesalers,” said Mitzi Batterson, of James River Cellars, a Hanover County farmer who added that she expects to lose 25 percent of her business. Not quite true. There is one other winner: Virginia’s political class. By protecting the privileges of Virginia wine-and-beer wholesalers, legislators ensure a steady flow of campaign contributions. Anyone who thinks of Virginia as a commonwealth committed to free market principles is living in la-la land.
