Tuesday, June 22, 2010

Welcome New Member Otis Kenyon Winery

I am pleased to welcome our newest member, Otis Kenyon Winery, to the FWWS. Here is some information on them:

Otis Kenyon Wine is a family owned and managed winery with deep historical ties to the Walla Walla Valley. We handcraft limited quantities of elegantly structured and affordable Bordeaux and Rhone varietal wines from our estate and other proven Walla Walla Valley vineyards.

In tribute to four generations of Otis Kenyons, the family has returned to the Walla Walla Valley with a passion for time-honored winemaking, an unyielding commitment to excellence and a dedication to sustainable and bio-diverse viticultural practices.


Welcome to the org!

Welcome New Member Masquerade Winery

I am pleased to welcome our newest member, Masquerade Winery, to the FWWS. Here is some information on them:

Handcrafting fine Red Mountain Estate and vineyard-designate wines in the heart of Washington Wine Country. Our mission is to make wines that bring enjoyment and celebration to life.

Laissez les bons vins verser!


Welcome to the org!

Friday, June 18, 2010

Feedback to Initiative 1100

Family Wineries of Washington State has received lots of feedback, both positive and negative, from member and non-member wineries about Initiative 1100. Listening to the views of member and non-member wineries is very important to FWWS. We understand that some wineries in Washington State (including a significant minority of FWWS members) believe that there are benefits to wineries under the current legal system -- namely the prohibition on volume discounts and the prohibition on offering credit -- that are worth preserving. We have studied these issues carefully for many years and discussed them with legal and economic experts. Our research and these experts have convinced us that these economic restrictions cause more harm than good.

While some individual wineries may feel they benefit from the ban on discounts and credit, there is no doubt that these restrictions limit innovation and the growth of the Washington wine industry as a whole. The restrictions reduce available capital, favor large distributors, and are unfair to retailers, winegrowers and, most importantly, wine consumers. No other industry in Washington State operates under such a paternalistic system. While I-1100 may not perfectly represent all the best interests of the wine industry, the Board believes that the opportunity presented by this convergence of political, economic, and electoral forces will not occur again and must, when weighing the freedoms and opportunities gained against the special treatments lost, be embraced.

Initiative 1100 presents an extraordinary opportunity for our industry. FWWS, while advocating for a comprehensive separation of economic regulation from public safety regulation under the liquor code, has for three years proposed bills in Olympia which offered either significant compromises on major issues such as credit (example: our Payment Parity bill) or voluntary exemption of wineries from restrictions on trade (example: our Craft Wineries bill). Each and every proposal has been rebuffed, without any offer of compromise, by both the Washington Beer and Wine Wholesalers Association, and the Washington Wine Institute. In light of this sustained and uncompromising opposition, the opportunity posed by Initiative 1100 could not be ignored by FWWS. The drafters of Initiative 1100 chose to achieve the privatization of liquor sales in Washington - a proposal that polls show is extremely popular with voters - by comprehensively removing the state from both the sale of alcohol and the economic regulation of the sale of alcohol on behalf of special interests. For those who believe that the "protections" in the existing law are in their own self interest, the question presented by initiative 1100 is this: Are these features of the current law, on balance, worth preserving if doing so will jeopardize the best chance we may see in our lifetimes for ending the invasive and stifling day to day control of our private economic affairs by the Liquor Board? While I-1100 may not perfectly represent all the perceived interests of every winery, the Board of FWWS believes that the opportunity presented by the convergence of political, economic, and electoral forces in 1100 must be embraced. The freedoms to be gained outweigh the special treatment to be lost.

We believe it is time for the Washington wine industry to loosen the shackles of the past and embrace a new era of fair competition and growth. We firmly believe that small wineries and small retailers have the most to gain from the flexibility that Initiative 1100 will provide. Small wineries and retailers have never been able to fight toe to toe with the big companies and the current law unfairly favors large distributors. Initiative 1100 will provide small wineries and retailers with more flexibility to find the niches of profitability the big companies leave behind and that small wineries and retailers have long exploited by being more nimble and providing better quality, selection and location than the makers and sellers of commodity wines. A free market is the only truly level playing field.

For too long, every time a winery thinks of a new way to sell Washington wine, the winery has had to go to the legislature for an exception from the existing law. We respect that others may have different opinions but we think that passage of Initiative 1100 will be the best legal development since the California Wine Act was passed by the legislature in 1968. The California Wine Act created the modern Washington wine industry by allowing the sale of California wine in Washington State stores and restaurants. The passage of Initiative 1100 represents a similar watershed opportunity for Washington State wineries (and breweries and distilleries). We hope all of you will come to share our view that the passage of Initiative 1100 is a huge opportunity to take all of our wineries to the next level.

Again, we thank those of you who have taken the time to express your views.

How Initiative 1100 Helps Wineries

1)Initiative 1100 is unique among the current proposals for liquor store privatization in that it comprehensively removes the state from not only the business of selling alcohol, but of regulating the economic aspects of alcohol trade as well. As such it is arguably the most fundamentally important and positive change in Washington state liquor law since the repeal of Prohibition. 1100 will get state bureaucrats out of winery front offices and re-focus the Liquor Board's limited resources on public safety and tax collection.

2) "Money's Worth Restrictions." Current law prevents a winery from giving any money or thing of monetary value to its customers, including credit (a loan of money), joint advertising, personal gifts and many ordinary customer service functions. 1100 removes these restrictions.
  • Credit. 1100 would end the current preferential treatment for wholesalers (allowed to ask wineries for credit terms) and allow wineries to set their own credit policies for all their licensed customers. Wineries will be able to, at their discretion, use their valuable inventories as readymade credit facilities which are bank free, application free, and cost free to the winery. The availability of additional credit will expand economic activity in the Washington wine business exactly the way it does in every other business. Even wineries who choose to extend only short-term credit will be able avoid the current hassle of standing around waiting for a check from a trusted client.

  • Advertising. Under 1100 wineries will no longer be prevented from engaging in targeted win-win co-promotions with their retail customers to showcase their wines. No longer will wineries have to go to the legislature to ask for permission to take advantage of every new idea or development in advertising and promotion that comes along.

  • Gifts. Under 1100 wineries will no longer be prevented from exploiting the strength of their personal relationships with clients. It will no longer be illegal for you to give someone who sells your wine a book, a dinner, or a special bottle of wine. Excessive gifts will still be subject to the commercial trade laws against bribery.

  • Customer service. Under 1100 you will be allowed to direct customers to specific stores, perhaps for a special sale event or to find sold out wines. Likewise such stores could advertise availability of long sold out wines on your website and unclutter their shelves. These are just a few of countless examples of ordinary and customary business practices prohibited under the current law that would be allowed under 1100.

3) 1100 will eliminate the extremely limited exceptions to tied house ownership rules passed into law in 2009, exceptions that require separate companies and stock ownership as the only acceptable forms of investment.

4) Opponents of 1100 argue that it will increase pressure for wine giveaways such as sales incentives, underwriting of advertising, promotional material giveaways etc. Asking for those items is not fundamentally different from the bargaining that already goes on. Whether a retailer asks for a lower bottle price or the cost of some advertisement, it is the same to the winery.

5) Opponents of 1100 argue that it will lead to uncompetitive strong-arm practices such as coercion, threats of product withdrawal, exclusive marketing etc. The current state and national legal system already contains safeguards under the antitrust, fair trade, and consumer protection laws that make illegal the egregious economic activities that opponents claim will be allowed.

6) Passage of 1100 would give Washington the best wine laws in the country and thereby make available a competitive advantage to Washington wineries not available to other states until they revise their own laws. California’s laws have many of the benefits of 1100 already and small wineries are doing fine there.

7) Without hindering public safety, 1100 would make it easier for wineries by themselves and with other members of the industry to market their wine. This will increase wine sales.

8) The independent state auditor’s report concludes that 1100 will raise revenue for the state, putting less pressure on the legislature to raise taxes on wine for revenue.

Passage of 1100 will allow Washington wineries to unleash their full competitive strength and innovative creativity. FWWS truly believes that 1100 will greatly increase the long term potential for success in our industry. Embrace the future and fair competition by supporting I-1100!

How Initiative 1100 Helps Consumers

• The State of Washington should not be in the liquor sales business – it’s the only consumer product the state sells. Passage of I-1100 will provide wineries with a free and fair market for wine in Washington State for the first time in history.

• I-1000 would allow consumers to make decisions regarding the spirits, beer and wine they buy instead of state bureaucrats. It would repeal blue laws which remain on the books only as a throwback to a century ago when prohibition was the order of the day: we have gone way beyond that as a population.

• We would have better wines at lower prices – with private businesses able to offer bargains for larger orders. There are only 18 states remaining that have liquor controlled by their states – 32 have privatized sales of liquor.

• Currently there is a three- tiered system of liquor in Washington; the people who make the wine must be separated from the customer at the retail level by an additional middle man who is the distributor. These large distributors have built a legal system based on their own economic self interest rather than the interests of consumers. This initiative would take out that mandatory middle man and remove the complex restrictions on the way wineries sell wine that are contained in the current special interest driven liquor code, allowing the industry to move forward under a more open and fair system.

• I-1100 does not reduce state liquor taxes; the state will not lose money under I-1100, in fact it will reduce expenditures by the state at a time when the state budget is strapped.

• I-1100 does not change the public safety provisions of the liquor code at all. The state will still control all the public safety aspects of liquor, something that all of us agree is of utmost importance.

• Wineries are restricted in hundreds of ways that interfere with the marketing of wine – from limitations on advertising and promotion of wine; to bans on volume discounts and extension of credit to their wholesale customers (distributors are exempted from this ban). These restrictions are so broad that they prevent things as simple as re-filling recycled containers and printing wine lists for restaurants. The current regulations prohibit many business practices that are perfectly legal for other products and have nothing to do with public safety.

• For years family wineries have been working with the state legislature and the Washington Liquor Control Board to change these laws. To date the progress has been frustrating and time-consuming with little real change; we are still living with Prohibition-era mentality where protectionism rules and the free market do not apply. People may tell you that Initiative 1100 will hurt the protections built into the law for smaller wineries and breweries, but nothing could be further from the truth. Our small wineries will flourish when they can finally put their creativity, marketing and consumer relationships to work directly with the people who are doing the buying.

Response to the WWI on Initiative 1100

First and foremost, Initiative 1100 will repeal outdated laws that don’t pertain to any other industry. Here in Washington, forestry, aeronautics, software, and even other agricultural products thrive without such “protections” from competition.

  • Being able to sell wine on credit is a good thing. There is a reason why every other consumer good in this state is sold on the credit principle. A reputable retailer or restaurant isn’t going to default on its credit otherwise it will lose out on all of the other business credit that it uses. A questionable retailer or restaurant doesn’t have the bargaining power to not pay on delivery. Having credit as an option gives more opportunity for a wine seller to increase their output as there will be more capital available for retailers to buy wine. The availability of credit also allows for more efficient billing and delivery, i.e. no waiting for a check unless you want to. Furthermore, allowing wineries to extend credit to customers other than wholesalers will allow those wineries to tap the equity in their inventories as a credit facility without having to go through a bank.


  • Being able to make volume discounts is a good thing. Many companies operate on this principle because it increases their volume of sales as well as cutting other marginal costs like transportation. Wineries often give a case discount to their wine club customers to encourage larger sales. They should be able to do the same with retailers and sell more wine to them. This is based on the law of supply and demand.

  • Retailers can’t run an advertisement and send a winery a bill for the cost under the initiative. What Initiative 1100 does is give producers more of an ability to advertise if they want to.

  • Printing menus is just a cost of doing business that already exists. If the restaurant pays the cost, they increase the price of the wines on their list to compensate. If the winery pays the cost, it increases the cost of its wine to compensate, and in turn the restaurant increases the cost of its services to compensate. In the end it comes out the same. A winery should be allowed to help retailers with menus if they want to.

  • Providing branded promotional items is currently legal in all other industries and how often does it happen? The wineries just fought for and received the right to provide such items to their wholesale customers. Retailers don’t have the power to make ridiculous demands on wine makers anymore than they do in any other industry. A winery should be allowed to provide a promotional item to a retailer if they want to.

The bottom line is that removing these restrictions will only help to give the Washington wine industry more options and opportunities to make money, get our wine out to more people, increase the demand for wine, and innovate. How much benefit do you derive from these so called “protections” and how many great ideas do you have to give up on every year because you are not allowed to give “anything of monetary value” to your customers?

The examples that the WWI provides are blown out of proportion to create an atmosphere of unreasonable fear. 1100 offers us the best opportunity to fix the wine laws in Washington State and take control of our own business destiny. We should embrace the future and support I-1100!

Monday, June 14, 2010

Regarding Members-Only Wine Event at Ray's Boathouse July 29th - Important Changes

Dear FWWS member,

Following our announcement of the Ray's event and blog posting, we were contacted by Captain Jennifer Skoda of the Washington State Liquor Control Board in regard to the $50 table fee we set for the event. She has indicated that this fee is an illegal extension of money from distributors (you) to a retailer (FWWS, who will be selling your wines at the wine store). Rather than trying to create a complicated work-around we have decided to concentrate our efforts on passage of initiative 1100 which would eliminate these silly "money's worth" restrictions from the statutes.

The Good News for you is that registration for the event will now be free to all member wineries. At the present time, we still have a few spaces available but we suggest you register immediately as the fee elimination should make entry even more attractive. As part of the reason for the table fee was for place-holding, please do not register for the event and reserve a space if you are not committed to being there.

One final note, many of you had agreed to provide a volunteer in lieu of your registration fee. We still need the help so please let us know if elimination of the fee will change your willingness to bring help. We will be contacting you soon with details on ticket sales so we can start advertising the event.

Thank you.

The Board

Initiative 1100 Update

Dear FWWS Member,

Family Wineries of Washington State supports Initiative 1100 and urges you and your winery to do so as well. We are trying to collect as many signatures for the initiative as possible by the July 2nd deadline. Many wineries have no doubt run into questions from their patrons regarding this initiative and we have produced several documents that help to answer these questions.

This one lets consumers know how the initiative will benefit them and the small wineries they love.

This one highlights the benefits for you and your winery.

This one rebuts points raised in the email from the Washington Wine Institute that many of you have received.

Many wineries have already decided to have petitions at their tasting room but we still need more wineries on board. If you have access to a printer that can print 11"x17" then feel free to print the petition directly here. Please note: smaller formats are not acceptable to the Secretary of State, also it must be printed on both sides. You can mail it to us at 600 Stewart St Suite 1300, Seattle, WA 98101 . If you need us to send you petition forms, please let us know as soon as possible how many signatures you estimate your winery could gather in the coming weeks and we will send you the appropriate number of official Initiative 1100 petitions.

We urge you to do everything you can to support Initiative 1100.

The Board of Family Wineries of Washington State

Wednesday, June 9, 2010

Welcome New Member Knight Hill Winery

I am pleased to welcome our newest member, Knight Hill Winery, to the FWWS. Here is some information on them:

In 2010 we will release a varietal Mourvedre, a varietal Syrah, a Bordeaux style Red Blend and the second edition of Roundtable Red. We will also complement our Dry Riesling and Chardonnay with a 2009 Sauvignon Blanc.

Our picnic area and patio will be ready for your al fresco folicking. The view remains the same: Fabulous!!

We are walking distance to a vineyard cottage rental and also to a first class hilltop B & B.


Welcome to the org!