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Bottled Up

Oklahoma grape growers and wine makers say a recent court ruling has bottled up their future.
Bottled Up

Wine

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Show Dates

Show 0805: Bottled Up

Air date: February 3, 2008

 

Transcript

Rob: As Oklahoma lawmakers reconvene at our state capitol, one of the issues

they will consider this session could well determine the future of

Oklahoma's burgeoning wine industry.

In 2006, Oklahomans voted to allow direct shipments from local wineries to

retail stores and restaurants.

But the amendment was later ruled unconstitutional because

it allowed in-state wineries to sell direct, while out-of-state

operators could not.

A ruling that grape growers say could bottle up the future of

Oklahoma's wine industry.

Our Alisa Hines reports.

Alisa: For Marty Hazelwood, opening the Winery of the Wichitas was

the cork in the bottle.

Marty Hazelwood: I love grapes, love wine, and it just seemed like a natural

thing to do when I retired, because I love wine, and I wanted to be a

winemaker and own a winery.

Alisa: But there's a hiccup in the way Marty can sell her wine.

Hazelwood: It does not make any sense at all to me, why; why, me, as a

winemaker, and an Oklahoman, can send my product out of state to

anyone who wants to buy it, anyone of age who wants to buy it,

in certain states; but I can't even send it to my fellow

Oklahomans who want to buy it.

Alisa: She's referring to a U S Supreme Court ruling that invalidates an

Oklahoma law that allows wineries to ship directly to their customers.

Forcing growers, like Hazelwood, to now sell their wine through

established liquor distributors.

Hazelwood: When you have to give your profit to someone else, just to

distribute your product, it affects your business.

We're fortunate here, in that we're in a tourist area, so we didn't really

expect that distributing was going to be a large part of our market.

But it was definitely, the plan was for it to be part of our market, and now

that's a moot point.

Alisa: And for many rural producers, like Andrew Snyder of Sand Hill

Vineyard, being able to self-distribute would be helpful.

Andrew Snyder: We're so small; there are fifty small boutique wineries

out there, that it's very difficult for us to distribute our product.

And we've actually been handcuffed since that June 15th ruling where now we

can only sell through our tasting rooms which are

remotely located or at festivals.

Alisa: A limitation that could affect entire communities.

According to Gene Clifton, owner of Canadian River Vineyard, wineries are

giving a boost to rural economies.

Gene Clifton: There's been businesses pop up all around us, just because

we're there; to say nothing of the tax base

going up in the local communities.

Economically, tourism and agriculture, that's what this is all about.

Alisa: And lawmakers are listening.

What are the other challenges that, as legislators,

we can help you with?

Alisa: At a recent hearing, wine producers

were able to voice their concerns.

Wine Producer: I live ten miles from Hobart.

Right now, I have a store that sells a little bit for me, a small mom and

pop situation.

I have to drive my case of wine to Oklahoma City.

Then they, here recently, I'm selling my wine for six dollars a bottle.

They delivered that same bottle of wine back to Hobart, Oklahoma, seven

miles from me for eight o five.

Well, I have to go make that sale.

They're not going to sell it for me.

So I have to drive up there and sell it to him,

and then drive it to Oklahoma City.

That's the issue.

That's the gap.

Alisa: A gap that the president of Oklahoma's Grape Growers Association,

Gary Butler, says needs closing.

Gary Butler: There is a gap between the

wholesale system and the small winery.

And because we're such a small volume, and we market differently than

the big wineries, if you're distributing your wine through the wholesale

system nationwide, you've got people out there selling your wine.

You've got people working on building the demand on the consumer side.

Wineries really depend on that personal contact and building relationships, so

when you're doing, you're selling it directly, and you're visiting with those

wineries and making deliveries and finding out what the consumers are

saying and what products are selling and not saying.

There's instant feedback mechanism that's kind of critical for those small

wineries to build their business.

Customer: Let me have the big bottle.

Snyder: Before this June 15th ruling, I myself, just a small, 2,000 case

winery, was in about forty stores in the Oklahoma City area.

I'm about twenty-five miles west of Oklahoma City in El Reno.

And so being in those stores, and that's just a pittance of what I could

if I worked on it, would be able, I'd be able to distribute my product,

sell my product in a way those customers who wanted those products even in

other areas of the state, when I appear at festivals, I could

establish new connections with other retail liquor stores.

So, being able to self-distribute would really help the Oklahoma

grape and wine industry.

Alisa: But because of the federal court ruling, allowing small Oklahoma

wineries to self-distribute would open the door for large

national distributors to bypass state wholesalers

which would hurt their business.

It's no different than the car business or any other business.

If you come at them with some kind of a threat, they're going to react and

all the legislators here will tell you the same thing, if they're really

being honest, they're going to make sure that their business is not

encroached upon.

So I think the challenge, as I see it for wine producers and wineries,

and for the entire industry, is to figure out how to get you up a step

or two without encroaching on them.

Alisa: While also letting a home grown industry thrive.

Snyder: It contributes to the sales tax.

We employ people.

We're doing good things for the state by growing those grapes here,

producing the product here, and then supplying it to consumers who more

and more want to drink wine with their meals.

Alisa: A trend grape growers say will only flourish by the

legislature pruning Oklahoma liquor laws.