Same questions that I posed to Peaks of Otter Winery, but this time the answers are from Dave Gibbs from Virginia Mountain Vineyards a new winery that produces 400 cases a year.

1. How has the change in self distribution laws affected your winery and your business?
   
   As a new winery (July 1, 2006) that produced 400 case of wine last year, I have been unable to get my wines into any local restaurants and stores. No distributor will market my wines. Even if they were willing, there is no way the winery could afford a 35% markup that the distributors want.
   


2. Can you break down the cost differences between self distribution and distribution through a wholesaler?
   
   Local market delivery costs for me are negligible versus the cost involved by using a distributor. I can market wine valued at $1000 retail for less than $50 versus the approximate $350 a distributor would cost.
   


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?
   
   A festival is a very expensive one or at most two day event for the winery to participate in. It does provide a good opportunity to introduce our wines into a new location and helps, in most cases, a noteworthy charity or benefit. This is however, an extremely limited situation to get our wine to new and distant locations. After the event is over, we have no local retail outlet for new customers. People who buy the wines at these festival locations 50 to 200 miles from the winery want to know what local retail outlets are near them for wine availability. We have to tell them that they have to travel to the winery for any purchases. The limited number of festivals are no replacement for everyday shelf presence in wine shops, convenience stores or other retail outlets.
   


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?
   
   Wineries and their owners are prohibited by Virginia law from from setting up a wholesale company. A totally unconnected individual must form a distributorship. Once contracted, the wine franchise act basically locks the winery into a lifetime agreement with little, if any recourse should the relationship turn bad.
   


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?
   
   The proposed Watkins/Saxman bill is a fair approach for all concerned. It allows limited equal market access for all wineries, no matter size and preserves the three-tier system for distributors. It allows the small or new farm winery a chance to get their wines into the market where no chance realistically exists today. This is not the ideal solution for an archaic and state mandated monopoly for wine distribution which is long overdue for abolishment, but is a significant compromise.