I wanted to get the perspective of one of the farm wineries that the Watkins-Saxman legislation would impact. Danny Johnson, from Peaks of Otter Winery, agreed to be interviewed. I want to extend my thanks to Danny for providing this very insightful information. Hopefully, this helps further demonstrate why this bill is so important:

1. How has the change in self distribution laws affected your winery and your business?
   
   We have grown our business slowly, mostly paying for improvements as we grew. We had grown to the point that we needed some one part time help to help sell and deliver our wines. The young man that we hired not only did this put helped out with other things on the farm. We had also doubled our winery sq. footage by building a new building that we had started in November of 2005. After July 1, without our wholesale sales we had to lay off our new person. Our building is at the present just an added expense that we really do not need. We had stocked all of our wine shops before July, and every day I get calls because they are running out. From this time forward is when we will start feeling the impact.
   


2. Can you break down the cost differences between self distribution and distribution through a wholesaler?
   
   It is very simple.
   You have a wine that retails for $15
   We would wholesale it to the retailer for $10 or 1/3 off. The retailer could then put his percentage on the wine bringing it back up to around $15. This same bottle would have to be sold to a distributor (if they would take it) for $7.50 they then add their markup and other charges and sell it to the retailer.
   
   Most small wineries are not making the volume to be able to take that off the bottom line so if it was sold to a distributor for $10 and he sold it to the retailer for $15 then the consumer would have to pay $22.50.
   
   Maybe it is not so simple.
   


3. Wholesalers have claimed that all of the festivals around Virginia give wineries ample opportunity to sell their wines, what is your take on that argument?
   
   We had festivals around Virginia before July 1 2006.
   We could wholesale our wine before July 1 2006.
   We had sales in our tasting rooms before July 1 2006.
   Would the distributors or any other business like to lose one of the above lines?
   


4. Along the same lines, the argument has been made that wineries can simply set up their own wholesalers, is there any reason why this is not practical?
   
   This is called the "mother-in-law" act.
   I would only hope that a distributor has a great marriage when he turns all of their business over to his mother-in-law.
   No one in their right mind is going to form a business and put it in someone else's name. Winery stockholders, owners, partners cannot get this license. You will have double insurance, double trust and probably double trouble not counting the costs. I have heard around 10 grand.
   


5. I realize the text of the legislation has not been released, but based on what you have read, what is your opinion of the bill Senator Watkins and Delegate Saxman are planning to introduce?
   
   I would have like to have seen some other things added but as it stands I think it is a fair bill to all parties.
   The way I understand it. Any winery can sell up to 3000 cases per year to licensed Virginia retailers. The wine must be delivered by a winery employee in a winery vehicle.
   
   We think that it is do or die for a lot of small wineries this year. We will survive but a lot of our friends can not make it. Our Delegate had hopes that the distributors and wineries could work out a solution before session. It would be beneficial to all parties if the distributors could come on board with the Saxman-Watkins law and in return the wineries could stand united with them if and when the three tier system and the wine franchise law comes under attack.