Winetasting ban surprises boutique vintners, nonprofits

NAPA, Sept. 26, 2006 ? The widespread practice of small wineries donating their custom vintages to fund-raising events is suddenly in doubt with the Alcoholic Beverage Control Board moving to temporarily suspend the licenses of three Napa labels.

The Alcoholic Beverage Control Board's license-violation action against AlphaWolf Ranch, Elkhorn Peak Cellars and StoneFly Vineyard has surprised other such vintners that don't have their own winemaking facilities as well as wine industry trade associations and nonprofit groups. The latter say "undiscovered" wines can be a main draw for charity events and auctions that bring in millions of dollars each year for a variety of causes.

The license violation allegation stems from the Tiburon Wine Festival, put on by that Marin County town's chamber of commerce in May, according to testimony at the hearing. AlphaWolf, which has the Eagle Eye brand, Elkhorn and StoneFly were among 70 wineries invited to participate in the 23rd annual event. Those three have type 17 beer and wine wholesaler licenses and type 20 licenses, which allow them to sell beer or wine to consumers as long as it isn't consumed onsite.

Holders of those types of licenses, amounting to several hundred in the North Coast, can't donate wine to a nonprofit group, sell it to them for less than cost plus 6 percent or pour their wines for consumers, according to Michael Mann, manager of the board's Santa Rosa district, which covers Sonoma, Napa, Marin, Mendocino and Lake counties. Winetasting privileges are reserved for holders of type 02 licenses, which include vintners with their own wineries and winegrape growers.

That prohibition surprised the chamber, the vintners who were cited for the violation and the Napa Valley Vintners Association when they were contacted about the citation in June. The association since has researched the license types of its 280 members and told them to which association-sponsored events they can legally contribute wine, according to Industry Relations Director Rex Stults.

The Santa Rosa district office has received a handful of complaints from wineries with type 02 licenses about vintners with type 17 and 20 licenses conducting winetasting at events, Mr. Mann testified. He added that the Santa Rosa office's seven investigators hadn't started focusing on such violations until the past year because of short staffing.

Most of the three dozen people who overflowed the small Napa County Public Works conference room for an appeal hearing on the license suspensions today were representatives of nonprofit groups concerned about the impact of enforcement of the virtual vintner donation ban on their fund-raisers.

Tiburon Peninsula Chamber Executive Manager Georgia Kirchmaier testified that a major draw for the Tiburon Wine Festival was the many boutique wine producers who pour their wines.

Michelle Pearson, development director for the 175-student private Blue Oak School in Napa, said a May wine auction, which involved small wineries, raised $475,000 to fund scholarships for 40 percent of the student body.

Matthew Botting, a staff council who represented the board in the hearing, said an option for conversion for virtual vintners not wanting to invest in their own facilities as an alternating proprietorship, or a type 02-AP license. An example of that is Napa Wine Co.

Administrative law judge Robert Kaufman will have 30 days to submit his decision on the recommended 15-day suspension of the three vintners' licenses to the board. The board will have 100 days to decide whether to accept it but typically determines its action more quickly, according to Mr. Botting.