Vintners Association proposes Santa Barbara County Wine Preserve, local wineries oppose
After two years of studying and meeting with vintners, stakeholders and county officials, the Board of Directors of the Santa Barbara Vintners Association proposed forming a new Wine Business Improvement District: the Santa Barbara County Wine Preserve.
The Preserve would be funded by a 1% assessment on Direct-to-Consumer sales, in an effort to provide funding for Santa Barbara County wine, winery and vineyard promotions.
The fee would be charged on all DTC sales that incur state sales tax, including wine, tasting fees, merchandise, food, events and wine clubs. All county wineries and vineyards with DTC sales pay into the assessment, and they’ll be members of the new district without any membership dues.
The Wine Preserve is an attempt to compete with other wine countries in the state, such as Napa Valley, Sonoma and Paso Robles, and to get Santa Barbara County’s name on the map, according to supporters of the assessment. However, it has met intense opposition from a coalition of wineries.
Alison Laslett, CEO of the Santa Barbara Vintners, said the concept is borrowed from the hotel industry’s bed tax to raise funding for the promotion of their area.
“Now we’re looking at a landscape that is very full of festivals — beer festivals, wine festivals, spirit festivals … There’s a lot of competition for that particular space,” she told the News-Press. “What the Wine Preserve does is provide sustainable funding for the wine industry.”
The CEO said any wine region has difficulties getting established and getting people on the same page.
“One of the things Santa Barbara County wines struggles with is the wine itself is fantastic, but the county as a wine region is not as well-known as the reputation of the wine,” Ms. Laslett said. “So part of what we want to do is raise the recognition of the wine and educate people that they have a wine region within a stone’s throw of Los Angeles. It’s about explaining to the consumer that there are wines you can get here that are internationally competitive, available locally.”
The Vintners will enter a petition process, and need at least 51% of the industry in favor of the assessment for it to move forward. From there, the proposal will go to all the city councils in the county, as well as the county Board of Supervisors, for approval.
“Our ambitious hope is the beginning of next year for implementation,” Ms. Laslett said.
Any BID requires all businesses within the specified industry to participate, and each city as well as the county will vote on joining the Wine Preserve. A third-party accounting firm would collect the fee from the wineries and distribute it to the Wine Preserve, all confidentially.
Nicholas Miller is the VP of marketing and sales at The Thornhill Companies, and said having the Wine Preserve will create one unified voice for marketing.
“What this process would give us is finally a solution we’ve never had in this county: a source of funding to have high-level, unified messaging and to have a seat at that table with the top regions in California,” he told the News-Press.
He added that those opposed to the assessment fear it will turn customers away, but he doesn’t share that fear.
“If people are buying a $30 to $60 bottle of wine, will they really care about those extra $3 to $6?” Mr. Miller asked. “These things already exist in so many other sectors. It’s a proven model.”
Stephen Janes, president of the Santa Barbara Vintners Board of Directors, said more people need to be talking about the “rustic, elegant experience” in Santa Barbara County.
“We’re making some of the best wine in the world right now. We’re on the global stage. What’s crazy about this is that nobody knows that,” he told the News-Press. “For the first time ever in Santa Barbara history, we could have very stable and consistent funding.”
Mr. Janes said because the county is “laid back,” it’s also independent-minded, which “breeds a lot of entrepreneurial spirit,” not to mention the fact that the county is fragmented geographically. He said that while those things are positives for the region, collaboration would be beneficial as well.
“We don’t have a lot of unity,” he said. “Think about all the ancillary benefits that are going to happen for all the people who kind of feed off the wine industry. Maybe there’s some short-term effect on the customers, but in the long run, there’s no doubt this will be one of the best things that’s ever happened to Santa Barbara wine country.”
Doug Margerum, owner of Margerum Wine Company, also supports the Wine Preserve to promote the county’s unique nature.
“Santa Barbara’s story is a really difficult story. We have so many wine regions within such a small county where we produce such different styles of wine,” he told the News-Press. “There are so many different microclimates and regions that we don’t have a single, cohesive wine. We have a variety of wines from a variety of different producers.
“This is a great, equitable and fair way to raise money and tell our story and I think it’s an important story to tell,” he continued. “We can’t really tell it unless we have these kinds of promotional funds to work with.”
The Wine Preserve hasn’t convinced the whole county yet, however.
An ad hoc group of wineries are joining together in opposition to the BID, and many say they will refuse to charge their consumers the 1% assessment.
Owners and winemakers from Beckmen Vineyards, Solminer Wine Company, Flying Goat Cellars, Longoria Wines and many more wrote a letter, obtained by the News-Press, to around 300 wineries on behalf of the coalition, outlining 10 reasons they disagree with the idea of implementing this 1% assessment. The letter is signed by more than 50 wineries already.
“We agree that it is important that our wine industry support an organization whose mission is to promote, support and elevate our region’s wine by supporting its members, community and environment,” the letter states. “However this type of forced taxation is unfair and objectionable to those wineries that depend on their good relationship with their loyal customers.
“We know you are all extremely busy during harvest but this proposal affects every winery in Santa Barbara no matter how small your production, whether you have a tasting room or not – you will be assessed 1% of your total CA sales…So we need to hear from those who are concerned about the passing of this law so we can make our voices heard to the Board of Supervisors.”
The reasons these vintners oppose the BID include: “weighted vote is unfair and undemocratic”; “larger wine industry players assessed on less of their total sales”; “the BID law will restrict what the funding can be used for”; “no accountability”; “lack of majority support”; and “completely unproven and complicated funding structure,” among others. The full letter can be viewed on the coalition’s website, sbwinecountrycoalition.org.
David deLaski, owner of Solminer Wine Company and one of the authors of the letter, told the News-Press he believes the BID is, above all, unfair to the consumer.
“Our customers in other parts of the states who buy online or sign up for our wine club remotely don’t deserve to be charged a fee — they never stepped foot in Santa Barbara,” he said. “Our customers, especially locals, who come to our tasting room are supporting us already; they don’t deserve to be charged extra fees to subsidize promoting tourism. The association says the customer won’t mind because it’s only 40 cents a bottle, but I think the whole concept is just unconscionable.”
Michael Roth, owner of Lo-Fi Wines, is also in opposition to the Wine Preserve. He told the News-Press he does not want to be part of it.
“I think it’s a way for people to dig into the pockets of consumers without their knowing it. I don’t think that’s the way to fund an organization,” Mr. Roth said. “If they pass it, I’m not going to pay it. I won’t take money out of people’s pockets to fund this. If you come to Lo-Fi, you won’t get 1% taken out to give to this organization.”
He added, “I don’t know how exactly they’re going to promote Santa Barbara County wine, but I think the best way is to make wine people want to drink and that will promote Santa Barbara County wine.”
The Management District Plan with the county will be finalized this month, beginning the petition drive and education that will occur throughout October. The vote that will decide the county’s and city’s participation in the BID will take place in November.