Friendlier Legislation for New York State Farm Wineries

As a New York resident—and a very strong advocate for both New York wineries and the development of the state’s wine law—I am excited to announce that the New York State Governor, Andrew Cuomo, signed a bill, entitled the Fine Winery Bill, on Friday that significantly reduces the regulatory burdens for New York farm wineries. Farm wineries in New York State, as defined by Article I, § 3 of the Alcoholic Beverage Control Act, are “any place or premises, located on a farm in New York state, in which wine is manufactured and sold.” Currently, the New York State Liquor Authority (“NYSLA”) strongly regulates farm wineries with respect to direct shipment reports, branch store operations, and custom crush skills. (Current New York State liquor laws are accessible by viewing the consolidated alcoholic beverage control laws of New York State at Alcoholic Beverage Control.)

The Fine Winery Bills executes several of the suggestions presented by the New York State Grape Task Force in its December 2008 report to the Commissioner of the Department of Agriculture and Markets. The bill includes the following changes:

• Brand Store Capability: the bill allows farm wineries to manage up to five branch stores. Existing New York law allows for farm wineries to operate up to five satellite stores, but said stores much acquire separate licenses and are bound by the same restrictions as package/liquor stores. The Fine Winery Bill allows the branches of farm wineries to be classified as extensions of the farm winery as opposed to separate entities, which grants greater ease for farm wineries with respect to opening satellites around New York state.
• Custom Crush Capability: “[t]he bill clarifies the ability of farm wineries to provide and/or utilize custom crush services for purchasers of New York grapes, thereby encouraging smaller vineyards to enter in the industry, which in turn will foster rural economic growth.” (See Governor Signs Legislation Boosting Wine Industry.)
• Direct Shipper’s Reports: with respect to direct shipment, farm wineries are now permitted to keep records detailing their direct shipments to other states on the premises of the farm winery for NYSLA to review if requested. Previously, New York State wineries were required to produce detailed and time-consuming reports for NYSLA that outlined their direct shipments to outside states. These reports were underutilized by the NYSLA and, it is maintained, that the new Fine Winery Bill will greatly reduce the time constraints required for the prior provisions of direct shipment reports.
• License Consolidation: the new bill no longer requires farm wineries that produce less than 1,500 gallons annually to apply annually for a separate micro-winery license; instead, all farm wineries will maintain the same license with a micro-winery license costing $50 annually.
• Charitable Events: “New York wineries seeking to participate in charitable events are no longer restricted to five per year. Now, wineries will have to obtain an annual permit and notify [NY]SLA of the event, greatly reducing the amount of burden on both wineries and [NY]SLA, while ensuring the same oversight.” (Id.)

This bill, which is a great sign for New York wineries, confirms the continual positive legislative development for New York State wineries. For a state that currently boasts the placement as the third largest producer of wine in the United States, behind California and Washington states, its laws can be deemed restrictive and nonessential. In the future years, it is hoped that additional legislative and regulatory measures will be developed, maintained, and executed such to encourage the auxiliary growth of the New York State wine industry. In the last twenty years alone, wine production increased in New York by over 50% to include the production of nearly 200 million bottles annually and generated about $420 million in sales per year. (Id.) Additionally, the wine agricultural industry is one of the–if not the–fastest growing industries in New York State. In fact, presently, “[t]he New York wine and grape industry has a $3.76 billion economic impact from the production of wine and grapes grown on nearly 1,400 vineyards statewide. Since the passage of the Farm Winery Law in 1976, the number of New York’s farm wineries has grown from under twenty to nearly 306 today.” (Id.) With continued legal measures like the above, it is only rational the wine industry of New York will continue to grow at a healthy pace.

For more information on New York wine or alcohol law, or forming a winery, brewery, or distillery in New York, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.