Without Assembly vote, vintners fear wine industry will wither on the vine

July 05. 2011 1:21PM

Without Assembly vote, vintners fear wine industry will wither on the vine

Garden State winemakers are voicing new frustrations after a legislative setback last week that effectively keeps the industry in legal limbo.

The state Assembly last week failed to vote on a bill, passed by the state Senate, to allow small wineries to ship their product directly to customers, and also would have let wineries open off-site tasting rooms to sell their wines. The bill had the backing of Senate President Stephen Sweeney (D-West Deptford).

Ollie Tomasello, who owns Plagido's Winery, in Hammontown, and serves as president of the Garden State Wine Growers Association, said he was optimistic Wednesday after the bill cleared the Senate. That excitement turned to frustration when the bill withered in the Assembly.

"When it got to the Assembly and stalled, then we became disappointed," Tomasello said. "It's just very disheartening."

In December, a federal appeals court struck down a New Jersey law that would have allowed in-state wineries to open off-site sales rooms, while banning out-of-state wineries from doing the same. The court ruled that distinguishing between in-state and out-of-state wineries violates the Commerce Clause of the U.S. Constitution.

Paul Loriquet, a spokesman for the state attorney general's office, said in light of the court's decision, the Division of Alcoholic Beverage Control has stopped issuing licenses to wineries, though it already allows wineries to continue operating if their licenses expire. He said the division must await court or legislative action to remedy the legal issues before it can resume issuing licenses.

Tomasello said 15 new wineries are ready to open as soon as the state resumes granting licenses.

For now, those new wineries can make wine. They just can't sell it.

"All these wineries that have money invested are waiting," he said. "It's a shame."

Currently, wineries like Tomasello's can sell their wines at on-site tasting rooms, at wine shows, and through direct relationships with retailers and restaurants. They also have the option of distributing wines through a wholesale distributor, but Tomasello said wholesalers typically demand massive discounts small wineries can't afford.

Tomasello said the hiccup in the Assembly seemed to center around the provision allowing wineries to ship directly to customers. Assemblyman Joseph Cryan (D-Union) sponsored a bill to allow for off-site showrooms, but didn't include the shipping provision. That bill was amended to match Sweeney's Senate version, but it failed to gain traction in the Assembly after the Sweeney amendment.

Tomasello said shipping would provide one more avenue for Garden State wineries to get their product to customers. He said wineries are stuck in a difficult box. On the one hand, the state's wines are growing in reputation. On the other hand, the state's legal framework makes it difficult to capitalize on that reputation.

Tomasello knows this firsthand: Earlier this year, his cranberry wine won double-gold and Best in Class at the San Francisco Chronicle Wine Competition.

"Once we won that award, we had people from different states calling and asking us to ship them wine," Tomasello said. But mailing his prize-winning wine to those would-be customers is currently illegal.

The Garden State Wine Growers Association fears without legislative action, the court could be forced to impose a remedy — one they fear might tighten state laws and force wineries to go through wholesale distributors.

Tomasello is hoping for legislative action soon, before the state's burgeoning wine industry dies on the vine.

"We're fighting to keep our wineries open," he said.