The Economics of Wine

Although the Bordello title was kind of kitschy, the article was dead serious. And the response I’ve received about it has been terrific and filled with concern from people who think as I do.

However, I have also had some significant skepticism sent my way. I indicated that our closest, biggest wine neighbor, California, had about $40 Billion contributed to the economy from its wine industry. While that sounded like a lot, I discovered that I was mistaken.

According to the Wine Institute, the economic impact of California’s wine industry was not the $40 Billion that I had originally stated. It’s actually – at least as of 2013, the last year in which there are figures – $61 Billion. Yeah. That’s with a B.

The second largest wine region in the U.S. is Washington State, and according to the latest figures compiled by Washington State Wine Commission, the economic impact of wineries in that state is $8.6 Billion. Considerably less than California by a long shot, but nothing to sneeze at.  In fact, Washington State is not only making an impact on its state coffers, it has contributed about $14.9 Billion into the Federal coffers as well. That’s per annum, by the way, not cumulative. The reason I mention Washington State is because many of its stellar wines come from the eastern part of the state which is similar in climate and geology to northern Nevada.  What happens there could happen in this state as well. But we’ll never know unless the law changes.

Legislative Impact on Growing Industry

As I stated before, the ridiculousness of the wine laws in Nevada is keeping us out of the rapidly growing wine business. Even Michigan for crissakes has a thriving wine industry that is rapidly gaining fans and respect. You can include Idaho, Texas, Colorado, Pennsylvania, New York, Ohio, Virginia, and North Carolina in that number as well. And keep counting. While Alaska doesn’t have vineyards for obvious reasons, there are vineyards in Arizona. And Utah. Really.

Assemblyman Pat Hickey (R-Tahoe) has filed a bill that will get rid of the ill-conceived Nevada winery restrictions and open up the opportunity for real growth in the state. That link, by the way, goes directly to the NRS statutes that quantifies the wine law.  If your county has a population of 700,000,  you can have whorehouses but you can’t have wineries. You have to have a population of less than 100,000 to have a winery. Stupid.

What that means is that not only does that limit larger counties from accessing what could be a potentially valuable asset, but it keeps businesses out of the state.  As I noted in an earlier post, Jackson Family Wines is purchasing quality wineries in order to expand its portfolio.  Guess which state in which they won’t be purchasing winery property? Apparently, all of that money isn’t important to the legislature.

Economic Diversification

Vineyards at Tahoe Ridge.
Vineyards at Tahoe Ridge.

Nevada is a tourist state, and what can be better than diversifying the economy by removing the restrictions for economic growth. While I try to avoid being political whenever possible, this was just too conspicuous to pass by. While the politicians are talking about the possibility increasing taxes, the opportunities for expanded economic growth that will bring in more dollars to the state coffers is right under their noses! What! I mean, I love our Governor and all, but how short-sighted can you get?  The source of an incredible amount of possible revenue is in our hands, but the powers that be just can’t seem to fathom that or figure out the benefits.

While I doubt that we’ll ever reach the levels of California which is responsible for 90% of the wine in the entire United States, that doesn’t mean that because of our proximity we can’t get a piece of that rapidly growing, lucrative pie.

This is not a topic that I’ll let go. I think that it’s important enough to make the legislature see that we have the chance to grow, bring in a sizable revenue to the state, and see the genesis of a great industry in a state that’s ready for the opportunity.  And, just perhaps, keeping some of the millions of wine dollars here in the Silver State instead of sending it to California.

So What’s Next?

The hearing on the bill, of course.  And you can bet that I will be there to testify for the amendment to that law and for the diversification of the Nevada economy.  I’ve opted to take the opportunity and will literally have “my day in court.” I will be using the impact of the considerable research that I have done, including statistics, wine facts, the economic realities of having a thriving wine industry, and Nevada’s place behind its nearest neighbors.  I’m loaded for bear and ready for battle.

If you are a Nevadan and want to see economic freedom restored for the wine industry in this state, then be sure to contact your legislator/Assemblyman to let him or her know of your concerns.  It can only help.

In case you haven’t seen it, here is a copy of Rep. Hickey’s proposed legislation (give a few seconds to load):

Assembly Bill No. 4


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