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There are unfair business and restraint of trade practices against California wine producers who do not own their own grape-into-wine processing equipment. (They are called Type 17/20 license holders and often referred to as "Virtual Wineries")

These 17/20 wine producers are only allowed to sell their wine on the Internet, not even through the use of mail, telephone or fax. These producers represent about 35% (1018) of the total wine licenses granted in California during the past year of 2006.

Their CABC license restricts them from having direct face-to-face contact with the wine consumer, including their own mailing list/wine club members. That means the wine consumer cannot visit them at their home or storage space and the wine producer cannot visit the consumers' home nor a nearby restaurant or anywhere to pour a tasting. These wine producers can use brokers and wholesalers to sell their product but these representatives cannot directly pour or sell to the wine consumer. So, the wine consumer is generally unable to taste these wines before deciding to purchase them.

However, wine producers who own their own processing equipment, individually or on a shared basis, (called CABC Type 2 license holders) are allowed to pour and sell directly to the wine consumer. They can also sell their wine via mail, phone, fax and the Internet.

The Governor of California recently signed a change to the wine laws which now allows both the Type 17/20 and Type 2 license holders to donate and pour wine at charity events. To me this is precedent setting.

1. How can one segment of the wine consumer be disallowed the opportunity to taste a legally produced wine just because that consumer did not attend the charity function?

2. If it’s ok for the Type 17/20 to pour at charity why isn't it also true it should be allowed to pour at non-charity events. How can you call the two licenses alike for charity but not alike for non-charity? That's discrimination.

It's unfair business and restraint of trade being practiced against differing wine consumer segments as well as the Type 17/20 wine producers.

Should the California laws be changed to eliminate double standards among wine consumers as well as wine producers?
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Although I'm in favor of allowing type 17/20 permit holders the same opportunitues as type 2 holders, your posting is a little over dramatic.

These rules are not new, we all knew them when we applied for the type of permits we hold.

Type 17/20 permit holders can have thier wines tasted in both barrel and bottle at the type 2 facilty in which they are produced. Legally that tasting must be done by the type 2 permit holder or their representitive. This 'loop hole' is allowed because technically the wine does not come into legal possesion of the type 17/20 permit holder until after tax is paid and a bill of lading transfer made to the type 17/20 permit holder.

After transfer tasting can take place, with the type 17/20 permit holder 'face to face', but the permit holder can not, pour the wine, or offer the wine for sale. This must be done with the holder of a valid retail permit. The retailer can pour the wine and offer it for sale. I did a number of events like this in the past.

At no time can a type 17/20 permit holder sell wine, meet customers or deliver wine from the location of thier permit. No big deal there, I don't want 350 cases in my office anyway, nor do I want people pulling into my driveway on a winetasting day out.

Again we knew this when we started out. The greatest limitation in the past had been that type 17/20 holders could not pour at public events, like charity events. California law has now been changed to allow 17/20 holders to pour at charity events. Most other large events (Family WInemakers, Rhone Rangers) have made arraingements with qualified retailers to pour for type 17/20 holders at their events.

I continue to hold my type 17/20 permit as well as my C.B.W Type 2 permit. Holding both allows me some shipping opportunities not available to holders of only one set of permits.
quote:
Originally posted by Dave Tong BBP:
So what you're saying is that wineries that use facilities such as Crushpad to make their wines aren't allowed to market their wines to mailing lists?

I just hope that nobody tells Dain, AP Vin, Stefania Wine...

ASSUMING THE MAILING LIST WAS TECHNICALLY DERIVED VIA THE INTERNET, THEN A TYPE 17/20 CAN INDEED SELL ITS WINE TO THOSE ON THE MAILING LIST WHEN ORDERS ARE CONSUMATED VIA THE INTERNET.
quote:
Originally posted by thewinecntryclub:
[QUOTE]Originally posted by Stefania Wine:
Although I'm in favor of allowing type 17/20 permit holders the same opportunitues as type 2 holders, your posting is a little over dramatic.
I DON’T BELIEVE I AM, BUT YOU’RE CERTAINLY ENTITLED TO YOUR OPINION. MY COMMENTS IN REPLY FOLLOW:

These rules


“These rules are not new, we all knew them when we applied for the type of permits we hold.”
THIS IS NO TRUE JUST ASK THE THE NAPA WINE PRODUCERS WHO WERE CITED FOR DONATING AND POURING AT CHARITY IN TIBURON IN 2006. (http://www.napavalleyregister.com/articles/2006/09/24/news/local_top_story/iq_3608023.prt )
“Type 17/20 permit holders can have thier wines tasted in both barrel and bottle at the type 2 facilty in which they are produced. Legally that tasting must be done by the type 2 permit holder or their representitive. This 'loop hole' is allowed because technically the wine does not come into legal possesion of the type 17/20 permit holder until after tax is paid and a bill of lading transfer made to the type 17/20 permit holder.
YOU PROVE MY POINT! YOU MAY NOT HAVE DIRECT FACE-TO-FACE CONTACT AND DISCUSS YOUR WINE WITH THE PEOPLE TASTING YOUR WINE. LIKE YOU SAID, “LEGALLY,” WHICH MEANS YOU HAVE TO RISK GETTING CAUGHT, IF DO TALKA ABOUT THE WINE, WHICH IF YOU DID, YOU COULD SERIOUSLY HURT YOUR BUSINESS IF YOUR LICENSE WAS SUSPENDED/REVOKED..

“After transfer tasting can take place, with the type 17/20 permit holder 'face to face', but the permit holder can not, pour the wine, or offer the wine for sale. This must be done with the holder of a valid retail permit. The retailer can pour the wine and offer it for sale. I did a number of events like this in the past.”
BUT AT THE MEETING HELD IN NAPA IN 2006 WHERE DISCUSSION ABOUT CHARITY DONATIONS WAS MADE, THE CABC REPRESENTATIVE CAUTIONED THAT THE IF THE WINE PRODUCER WAS TO BE CAUGHT TALKING ABOUT HIS WINES WITH THE WINE CONSUMER EVEN IF THE RETAIL PERMIT PERSON DID THE POURING, IT WOULD BE AN INFRACTION BY THE TYPE 17/20 SUBJECT TO LICENSE SUSPENSION/REVOKATION. YOU HAVE BEEN LUCKY SO FAR!
“At no time can a type 17/20 permit holder sell wine, meet customers or deliver wine from the location of thier permit. No big deal there, I don't want 350 cases in my office anyway, nor do I want people pulling into my driveway on a winetasting day out.”
BUT MAYBE SOMEBODY ELSE WITH A TYPE 17/20 DOES WANT THAT, BUT AS THINGS STAND NOW THEY CANNOT LEGALLY DO THAT.

“Again we knew this when we started out. The greatest limitation in the past had been that type 17/20 holders could not pour at public events, like charity events. California law has now been changed to allow 17/20 holders to pour at charity events. Most other large events (Family WInemakers, Rhone Rangers) have made arraingements with qualified retailers to pour for type 17/20 holders at their events.”
AGAIN YOU MAKE MY CASE, “ARRANGEMENTS” HAVE TO BE MADE IN ORDER TO POUR AT THESE EVENTS. BY THE WAY, JUST AWHILE BACK TYPE 17/20 HOLDERS COULD NOT BE MEMBERS OF FAMILY WINEMAKERS BUT RECENTLY THEY CHANGED THEIR MEMBERSHIP RULES TO ALLOW TYPE 17/20 MEMBERSHIP BUT ONLY IF THEY OWN VINEYARD LANDS.
John, your point by point was interesting, but I don't think I disagreed with anything you said in the first place.

The people who got fined in Napa where breaking the law, everyone knew they were breaking the law, it just had not been enforced before then, the law has now been changed. When you got your permit, the paperwork clearly said you could not pour at charity events.


I went and read your blog, and figured out you're just now going through this process. It' painfull. I'd be happy to offer help and advice though, call me anytime.
quote:
Originally posted by Stefania Wine:
John, your point by point was interesting, but I don't think I disagreed with anything you said in the first place.

The people who got fined in Napa where breaking the law, everyone knew they were breaking the law, it just had not been enforced before then, the law has now been changed. When you got your permit, the paperwork clearly said you could not pour at charity events.


I went and read your blog, and figured out you're just now going through this process. It' painfull. I'd be happy to offer help and advice though, call me anytime.


PauL:
I have e-mailed you separately to see if we can get together. I have a comment about the charity issue.

The Governor recently signed into law a change to the wine laws which now allows both the Type 17/20 and Type 2 license holders to donate and pour wine at charity events. To me this is precedent setting.

1. How can one segment of the wine consumer be disallowed the opportunity to taste a legally produced wine just because that consumer did or could not attend the charity function? This is discrimination!

2. If its ok for the Type 17/20 to pour at charity why isn't it also true it should be allowed to pour at non-charity events. That is to say how can one call the two licenses alike for charity but not alike for non-charity. That's discrimination!

It's unfair business and probably restraint of trade being practiced against differing wine consumer segments as well as the Type 17/20 wine producers.
John sends

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