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Is Napa Regulating Out Small, “Startup” Wineries?

Walter Olson at Overlawyered wrote about an article on Napa Wineries.  His lead in got me:

Regulation is helping make the Napa Valley “a weird museum for rich people” …

Naturally, I was intrigued.

napa winery wine country

He linked to an article on Coyote Blog that talks about the different regulations new wineries have to face, and how they’ll drop a lot on properties sight-unseen, just to get around regulations.

Coyote Blog writes:

I have no idea what the public justification of all these rules and laws are, but the consistent theme of them is that they all serve to make it very hard for small competitors or new entrants to do business in the county.  There is a board, likely populated by the largest and most powerful entrenched wine makers, that seems to control the whole regulatory structure, making this a classic case of an industry where you have to ask permission of your competitors to compete against them.

He goes on to describe some of the regulations.  For example, you must have dozens of acres to build one structure on the property, and hundreds to build two structures.  If you already had structures, you are “grandfathered in,” even if you “renovate” one of those structures to be more than 10x its original size.

Some startups have had to lease land from other wineries, then open up non-traditional tasting rooms that are more like wine bars just for specific labels.

Napa is currently looking into more regulations to reign in the number of wineries to help prevent the region from becoming an “Adult Disneyland,” but according to that same article in the Press Democrat:

The wine industry is a crucial funding source for Napa County and its cities, bringing in $51.7 million in tax revenue in 2012 with a total payroll of $300 million and 10,500 jobs. Visitor taxes provided 66 percent of the town of Yountville’s budget and 49 percent of the city of Calistoga’s budget.

“If there were no visitors to Napa Valley, locals would have to spend $10,000 more per year to keep the economy of Napa County as it is now,” said Larry Florin, director of housing and intergovernmental affairs for the county. He added that each household would pay an additional $1,000 in taxes under such a scenario.

I’ve mostly moved on from Napa wines.  While they tend to be consistently tasty, they are also consistently pricier than comparable wines in other US regions.  I’ve been a Sonoma girl–but those wines are starting to get up there in price too.

What do you think?  Is Napa a “weird museum for rich people”?

About Jeanne Marie Hoffman

Former bartender, still a geek. One equal part each cookies, liberty, football, music, travel, libations. Stir vigorously. +Jeanne Marie Hoffman Jeanne on Twitter

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