I know -- our government
organization group -- in
so we're glad that you all could
join us today -- I am really
pleased by the of the of turn
out today -- sometimes we have
a lot of people come to these
benefits or very honored to be
here in San Diego I first want
to thank -- Steven hill Mister
Gloria's district directors
only member does thank you so
much for putting this together
for us -- we wanted to come
down here to do when these for
a while and -- based upon the
attendance like I would imagine
we'll do it again -- I my name
is Cecilia Aguiar-Curry I am the
assembly member for the fourth
district I represent -- a lot
of the wine country done napa
county Lake County a cinema
county as well as Solano yellow
and I'm missing Colusa -- so
everybody has a little bit of
wine in my district as you can
imagine -- we have had numerous
-- committee hearings we have
been honored to have so many of
our farmers and wine makers come
and visit with us and give us
some great ideas on legislation
what they do and don't like
the challenges they have in
the vision for the industry so
with that I'd like to pass the
microphone down and will that
each one of the is senators and
assembly members -- introduced
themselves I also am honored
today to have -- assembly member
Waldron with this -- as she
has just been elected as the
assembly pro Republican leader
and we're honored that she
was here to join with us today
so thank you very much for
joining okay go ahead Mike
well good morning and thank
you so much -- madam chairman
it's Michael choir minor to
be to be here I represented
at the state Senate district
that runs from the Golden Gate
Bridge the Oregon border --
we are known for amazing wine
or oysters are grown in that
deserve anywhere else and sixty
percent of the marijuana in
America so watch out -- very
very grateful for all the hard
work they miss Aguiar-Curry is
put into this and her team along
with -- co chair at the state
Senate select committee on wine
and senator Dodd a fantastic
partner and could not do what
we do without juicer and love
working with you very grateful
to miss a Gloria and his team
for hosting us today and thank
you so much for all of your
systems in a big congratulations
to our new Republican leader in
the state assembly -- and well
deserved and very happy that
you're here as well this is the
first time at the committees
have come together in our in
San Diego and we couldn't be
more excited -- we're gonna be
focusing a lot on regulation
to day -- and the challenges
that the industry faces along
with market space since my
winery issues as well as state
and federal regulations and
especially with the new reform
that we seen at the federal
level how that's going to impact
California's wine industry which
is a top tier agricultural crop
we also want to say thank you
at to the wine institute for all
of their assistance on getting
today's event organized begin
to the chairwoman Aguiar-Curry
thank you so much for all
of your work in your team to
the co chair Mister bill died
thank you Mister Gloria and
sweltering thank you so much
and grateful to be here with you
thank you senator -- my name's
Todd Gloria -- aye in December
for the separate district we're
all sitting right now -- once
right off the top apologize
for the weather -- this is an
embarrassment to a native city a
dad it is seventy degrees
partly cloudy and and sunshine
-- but we also need rain here
to write so we're gonna be
welcome -- this -- precipitation
a welcome to the seven eight
assembly district I said most
beautiful district I'm going to
send require has the most fun
district apparently -- add and
I welcome you to our fabulous
new central library it's --
actually not so new anymore it's
about five years old -- but it's
one of the -- as cheap as I had
for my time I served on the city
council here in San Diego we
welcome you to this is a crown
jewel of our public library
system encourage everyone to who
I may not be from San Diego or
not here often to explore this
beautiful facility -- is truly
is a monument public education
-- to -- -- on a number of
other I sort innovative things
including high school that's in
this building -- job training
center and a number social
services -- far communities
homeless so please check it
out we're very proud of it I
think you to -- chair Aguilar
curry and co chair dot for
bringing this to San Diego we
were chatting at ed's going to
flee in a minute but we're proud
of what we have here in San
Diego I know -- leader Waldron
aye ayes extremely pad many of
those wineries are her district
-- but we certainly enjoy of
those winds here in my district
so -- thinking for a shining a
spotlight on the industry that
we have here in our community
we're very proud of it -- and
hope -- and we have a successful
hearing that -- results
and -- hopefully some good
legislation in the year had to
make sure that we're supporting
this industry is so point to
California thank you very much
a good morning -- my name is
senator bill died and I'm from
this third Senate district
which includes all of doubt
but the bottom third of Sonoma
county Solano county yolo county
a little bit Contra Costa a
little bit of Sacramento -- I'd
like to say that -- I do have
the best district but -- with
that's always up for debate
so no I know we don't
have to go park in napa
I'd like to thank the co chairs
and like thank for all of you
for coming to you know as we
know state federal actions
have a dramatic impact on
California's wine industry
its ability to be successful
for example earlier this year
China retaliated to two hundred
fifty billion dollars worth
of terrorists imposed by the
U. S. by slapping its own
retaliatory tariffs including
an additional ten percent tariff
on wine this action place
wines are produced in the
United States at a price
disadvantage unfortunately
this affect California the
most as ninety percent of
white shipped around the
ship the bride is produced
right here in this state
as co chair of the Senate select
committee on California's wine
industry and chair of the Senate
governmental organizations
committee I want to make sure
that California's actions
don't result in such negative
impacts in that we take every
opportunity to listen to those
that will be affected by any
such decisions as such I'm
excited to be here today with
all of you to discuss what the
state can do to help ensure
that the wind industry is
thriving I one of things I
wanted to mention -- my partner
over in the state assembly
-- assembly member Adam gray
is ill today he was planning
on being here he could not
make it -- but I'm sure he's
at home watching this streaming
live from his -- from his
yes from his bet -- but with
that -- have a Republican
leader assembly member --
Waldron which I say a few words
thank you and I'm so excited
to have this meeting here
because you know how I'm always
talking about our wineries and
our great growers down in San
Diego and also to macula and
we've got our the San Diego
can even there's association
he's sitting over there in
a lonely table but he'll be
-- speaking to us -- shortly
but I am so excited because
I do represent the healthiest
district in the state because
not only do we grow grapes and
have wonderful wineries but we
also known for avocados and are
all of oil in our citrus and
our sunshine so you can't beat
that for the healthy district
-- Temecula wine country --
is I I have the whole city
of Temecula in my district
they're celebrating fifty years
-- as a wine country this year
and as we know San Diego has
been -- doing whining growing
grapes for over a hundred
years in Escondido one of the
other cities in my community
has a special day every year
call great day recognizing
the grape growers from going
back well over a hundred years
so I'm very excited and we can
you know keep highlighting the
economic positive -- impacts
of great growing and the mind
is the industry in not only this
region but California thank you
what grades so we'll move on and
get to the actual meat of why
you're all here today -- first
I would like to introduce and
welcome -- ed Embley -- he
is -- with the San Diego wine
industry I got to chat with
them a little bit before we
started and we have a lot of in
common -- particularly farming
and he -- at one time is family
raised chickens and -- X. they
did the egg industry and that's
a tough industry to be in but
he's moved on to bigger and
better things and to work with
the plain industry -- and he's
-- worked on -- he grew up
with the farming background
involved in agriculture his
entire life in state animal
science at Cal Poly Pomona I'm
sorry was at cal Polly Seles
Obispo we'll talk about that
later and -- with that without
further ado -- welcome at
thank you very much for
that introduction -- and I
would like to welcome those
senators and assembly members
-- to this hearing today
and to our beautiful skyline
of San Diego and the wonderful
rain that the you brought
with you from up north --
I'd like to state that --
send you county actually was
the location of the first one
read it was established in
California in seventeen sixty
nine by the Spanish mission
system and -- that's something
that's always overlooked many
times but we are very proud
of that in even the logo of
-- Sania county inventors
association -- we kind of put
that in there too that this is
will wind began in the state
-- and really and tell the
gold rush southern California
was really the the center of
warning great growing in the
state and -- this continued
for many years and even as
late as eighteen seventy -- the
city of Los Angeles was noted
its nickname was the city of
vines and -- kind of represents
can water background in
southern California is
what really change the the
landscape of San Diego county
one of the the landscapers
Inyo county warning industry
was prohibition in nineteen
twenty -- probation --
it affected the southern
California industry especially
to the extent that there were
only two wineries that really
exist today that were there
at that time or prior to
probation and -- they they
survived by making sacramental
wine and also producing wine
grapes that people could
buy and you know make it and
make one in a bathtub but --
due to one reason tenure with
county that did manage to
survive today as the burn are
wondering in Rancho Bernardo
and also the for one week now
named -- the forgotten bill
winery in in -- Escondido
-- as far as one industry
we could fast forward to two
thousand and ten -- that's with
that's with the county of
San Diego adopted the turn
one new ordinance by the board
of supervisors of this ordinance
reach me generated the entire
industry in San Diego county --
the the orders were spearheaded
by our local supervisor Diane
Jacobs -- she led the whole
industry with this led to a
whole new industry of boutique
wineries in the county --
my next line
yeah --
this slide represents
the number of --
one gorgeous this is the way
more licenses that are issued
in the different counties
of the state are you can see
that same day -- actually has
a hundred and seventy four
license to one growing --
a permits in the state
and we exchanged -- to make
it -- by almost a hundred
percent -- of these
hundred and seventy four of
Lysons winegrowers tied to
Lysons -- hunt one hundred
and fifteen of the more
active wineries in the county
for and you can
see by this slide that up until
two thousand four we had a
a real low issuances of new
licenses -- ran from one to
to actually here
and end with the anticipation
because that one is was and
was worked on for many years
but with the anticipation
of -- that one is coming
to affect the world more
applications for you --
applied for and you can tell
that in two thousand and ten
it really took off because
of the application rate --
exit ended up I think in two
thousand seventeen we had a
a twelve a two thousand sixteen
we had a total of -- twenty
six licenses issued in the
county of San Diego --
the F. thirty the in I I will
explain a little bit the dip
in the end of the graft that
was only up until -- July
of this year so it it kind of
construed that crafted shouldn't
take that sharp did because
we have had quite a few a
licenses issued since that --
in two thousand and we did an
economics impact study -- of
the -- warning growing and
-- or grape growing and wine
industry and saying you county
two thousand sixteen and we
read -- fresh that
study in two thousand
seventeen in a couple of the --
-- numbers that we came up
with on the two thousand
and seventeen study our
industry -- generated twenty
six million dollars in
sales -- for in the county
and it had a fifty million
dollar a year impact
-- economic impact in the area
in this represented a forty
and forty percent increase
from the previous study
-- just in one year which
really the dynamics of the
industry is really growing --
okay dish map shows the
county of San Diego and
also the -- three ABA use
the represented in the county
and -- so San Diego county
is home to three AB aids the
light green door which
covers most of this map is
actually the south coast --
ABA and it stretches from our
room all the way down to --
the Mexican border and it
covers most of the county -- we
have a a little bit darker
-- well it's almost a rectangle
-- there on the center of the
map and that is the scene you
know I mean that is a remote
valley ABA and you can
not quite make it out but
between with the Ramona Valley
aviators in Escondido there's
a small were it's almost a more
yellowish tented area and
that's the samples call Valley
eighty eight and actually the
simple call valley AVA is one
of the oldest -- eighties in
the country I think it ranks
third or fourth grade behind
napa and though it might
be one Ohio I think there's
actually the first one but --
so we were pretty proud about
that and -- actually most of
the warnings in the county
-- do Kerry that -- south
coast eighty eight although
it does get confused a lot of
times with to macula because
Temecula actions in the same
but -- since it encompasses
rural area we we share
that with them --
let me back up to the slide
once again I one thing I
would like to point out of
the black dots on the map
that represents -- each dot
represents a different winery
in the county in our industry
is very diverse -- it stretches
from the north the county to
the south the county to the east
county and along the coast --
so as opposed to some other
is that were wineries are very
concentrated -- we're really
spread out throughout the county
a one thing this does do this
allows for many variations in
the the growing environment of
grapes -- which is really --
-- a good thing for San Diego
because really if you come to
San Diego county -- you do get
a a it you can taste a lot of
different types of wine --
slide five represents the
increase of a production
in the county and
and -- also the increase of
acreage in the county anything
will come of that amount of
a correction of the incomes
harvested -- our average
production runs about two
tons per acre and this remains
-- represents how the with
the grapes and the one or the
one in the in the produced
in the county -- change a
very -- concentration of
flavors and complexity with
low production yields --
slide six service the
different varieties and
how they're distributed
in accounting -- Cabernet
Sauvignon being the the most --
slanted but -- really there's
not a lot of difference
between -- the ten top
of righties here --
as far as some of the concerns
with some of the gross in the
county -- one of the concerns
is the state water
board investor là discharge
permit that is a -- permit this
required of any -- commercial
agricultural processor a
producer in the state -- no
matter what the size and we
found that the the small
boutique wineries really have
very minimal effect on the
watershed in the county but you
know we're really treated like
-- somebody that has a thirty
thousand acre farm that might
use a large amount of irrigation
might have more impact -- and
that's an issue that I know the
can't Sania county farm bureau
has been working with -- the
local of water board of
to see if -- we can maybe come
to some interest understanding
and some recognition that
the impact that we have
on our ecosystem is not as
large as as what of the
permit might think it is
-- also all wrapped up
and a few comments about
myself eight did have a nice
introduction but I am the
president of the case Sandia
counties veterans association
which represents over half of
the wineries in the state in the
in the county excuse me of
this association is composed of
urban -- book teeth
Jose wineries and small wineries
are and they are located in
the unincorporated areas of
the county and also several
cities within the county
-- as stated I I have
ever control my life
growing up in a business
with cal poly promoter wearing
graduated there I serve time
in a nice lunch marine corps
during the Vietnam era and
more recently along with my wife
and son we started hungry hawk
vineyards in Escondido and --
actually the adoption of the two
thousand and ten -- boutique
winery órdenes in the county
was one of the main -- points
the promised to starting the
winery because if this had
not happened -- the economic
to cross before the enactment
of this -- legislation --
would have been the application
of major management and general
accounting goes will run up
to a quarter million dollars
which will ages does away with
the small forming aspect of the
boutique winery industry of
just to sum up my should in
the San Diego county jury grand
jury from two thousand seven
two thousand eight as a the
committee chair of the Auburn
at auto in the ministration
committee and I also served on
the house of accountable for
six years since I wasn't have
called industry for a period of
time -- thank you for everybody
listening to what I had to say
and -- welcome and I really
look forward to the rest of
this question today thank you
so thank you very much Mister
Emily and I'm going to first
ask if any of the -- committee
members have questions
the summer Waldron okay
thank you -- since my son
is -- right now is looking
to going to college is a
senior in high school so I
heard about -- your
Vince viticulture technician
apprenticeship program and
-- you know helps address the
labor gap could you tell us
more about that and how that
got set up and how it works
all we do have one member
-- or actually the chairman
of that committee here
to the hearing today and
she was going to go into
depth on that but -- that
is a program that was really
started -- to help provide
-- competent and trained --
people to grow up
into the industry --
we do everything manually and
by hand and our wineries in our
vineyards -- because there's
the small small size we can't
really afford mechanized
methods of pruning or harvesting
so it does get back to do
manual labor -- it does
require a skill set a
sales a to properly to that
and the bill to cultural
program was really bad on to
help provide a basic course
to people in the in the
the room wanting
to get into the industry --
and it also educate
them on -- how when we operates
in sales -- taste hero so
it's a very broad based --
room -- something that I'm
very happy to be involved
with I serve on the board
of directors for that
organization and -- I am
proud to be in that position
yeah Mister Emily -- as you know
each state has different wind
shipping regulations can you
discuss the impact that this
may have on your members
and what you do to educate
them on the different --
shipping regulations yeah
that's a real can of worms --
the wine institute has been a
great purveyor of information
on that subject and it really
gets down to a point for
vault small when Reyes to
ship out of state it's almost
impossible on your own --
each day normally requires a
license and a permit -- to be
renewed each year at sometimes
preserve central rates --
the bookkeeping so without
some -- other industries
that help support us in that
it would be almost impossible
-- personally we use a company
name sharper and I'm not trying
to make a promotion here but
actually we sell one to them
they do all the paperwork --
they ship us being sent us a
label -- the ship
and -- they collect all the
money in it for the money
minus their and expenses
to us and they have all
with the state permits -- and
they take care of the book
worked -- Adam well I find
it quite reasonable fee which
-- before we don't have been
with that company maybe nine
months prior to that we had
individual lessons for the
state of -- Michigan Colorado
in I believe Arizona even just
three states really made a
pretty it impacted office work
you asked one question
right now I'm sure someone's
going to have more questions
afterwards -- please
contribute as we move forward
okay thank you very much
thank you so much Sir in a
wonderful job okay thank you
as you all know today we're
gonna be focusing on regulations
-- both on the federal and state
level in this next panel we
have brought together a true all
star group to be able to have
different perspectives ensure
those perspectives with you
first of all we'd like to go
to bring up Linda make Williams
she's a wine maker and owner San
Pasqual winery to small urban
winery here in San Diego county
we're grateful that she's can
be providing her perspective --
coming from a director producer
-- but wine here in San Diego
county we're truly appreciated
the Jacob Jacob apple Smith
director of California
department of alcohol beverage
control is here today he's been
with the brown administration
since he was Attorney General
-- in head does a fantastic
job of regulating all alcoholic
beverages across the state he's
going to providing the state
by perspective the last person
we're gonna be hearing from
from this panel's mac McDonald
president of the association
of African American vintners an
owner in wine maker that vision
sellers we hear so much about
the fruit -- in the wind in the
stories behind it really where
there's a lot of work is on the
regulations -- and being able to
comply and we welcome all three
of you to the panel of five to
seven minutes -- give you thirty
second warning in the floor
is yours and good morning
my name is Lynn heavy use the
Mike if you don't mind good
morning up my name is Linda make
Williams my husband and I own
Santa squall winery where local
urban winery just outside of San
Diego in the city of la mesa and
also the wine maker one of the
almost twenty women wine makers
in San Diego county yeah
about ten years ago now when it
was located in a small warehouse
producing a few hundred cases
of wine a year I was a middle
school speech therapist and
my husband was and continues
his full time employment as a
research psychologist we had
plenty of experience with wine
drinking but no experience
with wine making similarly
the vast majority of San Diego
county vendors and wine grape
growers are first generation
taking down the challenges
enjoys a vineyard and winery
ownership while keeping their
day jobs or after retirement
our goal had been to open a wine
bar we signed urban winery for
sale just after the regulations
changed that allowed wineries
to also sell wine by the glass
instead of just a wine tasting
it seems that it could be the
wine bar without the middle
man if we could make our own
wine we bought the winery and
when I wine maker was no longer
available I went back to school
nights in Somers while taking on
wine making duties I completed
one production class at a
local community college during
our first production season
and then the online winemaker
certificate program from UC
Davis now we produce about
four thousand cases of whining
year and we have won numerous
awards from the county state and
international wine competitions
yeah we're excited thank you
we now currently employs
sixteen people at four different
locations in the San Diego area
also send wondering is one of
the almost twenty urban wineries
in San Diego county typically
located in city industrial
areas urban wineries do not
have their own vineyards but
by grapes from local growers
within the county state or some
even from outside of California
we checked the grapes here
and produce the winds in our
facilities although not bound
by the county winery ordinance
regulations urban wineries was
followed local city regulations
in addition to the state A. B.
C. T. T. B. and now FDA
regulations I was also the
first woman president of the
San Diego county vintners
association from twenty fourteen
to twenty seventeen and I
currently serve as the alternate
director for southern California
for the wine institute
the San Diego county vendors
association has worked to
address challenges to building
our local wine industry
unlike more established wine
regions San Diego does not have
an adequate supply of trained
winery and vineyard workers
available in the area to remedy
this the business association
worked with local Cui America
community college and the
department of apprenticeship
services to develop a two
year apprenticeship program
the San Diego viticulture
technician apprenticeship
program we call it the tap
as the program is based on
apprentices taking designated
classes at the community college
that may be more generic such as
your occasion and then learn the
specifics related to vineyard
management and wine making
during the on the job training
apprenticeships to develop an
on the job training curriculum
base we developed a list of
critical task for working in
the vineyard winery and tasting
room and assigned hours that
may typically be required to
develop mastery in each each
a press takes one class per
semester on the community
college campus and completes
fifteen hundred hours per year
of paid on the job training at
local vineyards and wineries
I just building vineyards and
wineries demonstrate and teach
best practices and report
back regarding apprenticeship
apprentice progress towards
meeting these establish goals
thanks to the California
apprenticeship initiative grant
through the California community
college division of workforce
and economic development we
were able to install a half
acre demonstration vineyard
on the queen American college
campus for our premises to
participate in an actual
installation and now vineyard
maintenance and a couple of
years we look forward to the
premises harvesting and making
our first wine I next step
is to help add viticulture
class to the community college
curriculum the apprenticeship
program is sponsored by
grants fundraising and small
contributions from the STC
VA and apprentices employers
unlike most apprenticeship
programs we are not the
beneficiary beneficiary of large
labor unions apprenticeship
employers must hold workman's
comp insurance and have a
payroll system in place that
being said unfortunately the
majority a vineyard and winery
owners in San Diego county
were small and family owned and
operated carrying workman's comp
insurance for the small produces
is a financial hardship so
they are not able to participate
in the apprenticeship program
to share their knowledge and
experience and benefit from
an additional hand we hope to
address these issues in the
future traditional grants to
assist small vineyard and winery
owners to be able to access this
we did have our first graduate
last spring who is now on an
entrepreneurial track as a
vineyard consultant for small
vineyards in our county her
experience in the program was
truly life altering moving
from from a desk job to the
vineyards where she sees a
horror movie life ahead of her
her new found skills have also
positively impacted the quality
of grapes from local vineyards
where she has worked I second
apprentice will graduate in
December we currently have six
apprentices and will interview
new candidates in the coming
weeks we are expanding our reach
to individuals who will turn
twenty one during their time
in the apprenticeship those
under twenty ones will be able
to vote on the job training
time to the vineyard and winery
without tasting of exposure
I program is small but growing
at a rate so our local vineyards
and wineries can hire newly
graduated of apprentices as
they are available two minutes
thank you our predecessors
will also be qualified to
continue to a four year college
program if that's their desire
-- other challenging issues
remain such as the maze of
different regulations for out
of state direct to consumer
shipping as well as finding
the time and gaining expertise
to address the growing numbers
of forms reports and paperwork
required by kind of governmental
agencies now including the FDA
it is difficult to start up
a new small business of any
kind let alone one depended
on agriculture there's so
many variables that cannot
be controlled such as whether
water shortage vectors plant
disease and natural disasters
such as fire some of these
challenges can be controlled
are changes in government and
regulatory policy such as
reduction of standardization and
or standardization of paperwork
elimination every step redundant
reporting of information to
different agencies the water
runoff standards standardization
of federal and state tax rate
categories for alcohol levels
and reporting schedules other
state shipping regulations and
antiquated regulations regarding
wine sales and advertising
of wine and winery off site
events another challenge
is the length of time for
application approval for -- to
license or modification to a
current license now six to eight
months or longer if there any
complications such as simple
clarification information or
delays into police department
reviews the length of time
for an initial -- to license
to be processed improved is a
major hindrance for wineries
in general but particularly
for small family owned wineries
as wine cannot be made before
production licenses granted
production of red wine takes
up to eighteen months of more
from harvest to market our
colleagues in breweries can
bring saleable product in thirty
days and wine shops and liquor
stores are just a phone call
away from their distributor to
fill their shelves modifications
to existing licenses is also
unlikely process that starts
pretty much from the beginning
rather than a more streamlined
process giving existing license
data that's currently on file
with the A. B. C. for example
a recent application to add
a production component to an
existing tasting facility took
more than six months we do
appreciate the recent changes
implemented such as reduce
federal excise taxes the ability
to have corporate tasting rooms
hosting more than one winery
and sharing access to tasting
room space for adjacent wineries
and breweries and closing the
wine industry in San Diego is
a great success story we're
we're still facing a number of
challenges thank you for the
opportunity to share our story
and concerns thank you so much
miss with billion miss Williams
very grateful for your testimony
today I know that we're gonna
have questions what we're gonna
do is we're gonna hold questions
until each of our presenters
have an opportunity with a could
be to turn the floor over now
to take a bath apples with the
California department of alcohol
beverage control Sir thank you
so much of five to seven minutes
we're grateful you're here great
thanks center -- I wanna
I'm gonna touch on three things
just a quick overview of the
department I'm gonna talk about
tight house rules and how the
one is you fits into them and
then cover three of the most --
commonly asked questions of me
in the wine industry in terms
of some of all being issues
so quick on the department --
we have four hundred and fifty
eight employees we had four
hundred and fifty six employees
in nineteen fifty five when we
were found it so we've grown
by two people over the years
government bloat at its worst
right there -- we are about
forty eight percent peace
officers -- who are focused in
around licenses talismans we do
variety of narcotics and
prostitution and other lots
of underage drinking can focus
in around bars and restaurants
for the most part very few
prostitution things we've
done our wineries for example
-- that's we are tough right
any of that so -- then the rest
of us were devoted to licensing
-- and -- assisting the
industry we have two offices
in San Diego right downtown
in the state building and
then also in the city of San
Marcos -- we have twenty four
offices around the state and our
our goal is to or regulatory
philosophy you put it better I
suppose is trying to get good
people in business for trying to
help them stay in business and
comply with the difficult laws
that they face and we're we're
going to crack down on people
who make the industry look bad
because they are abusing alcohol
and encouraging others to do so
and running criminal enterprises
in around our establishments
it's a tiny little group of
people but it's the kind of
people they can give all of
our industries of as a bad
name and not something we want
for all the obvious reasons --
the being under the tight house
issues -- coming out of
prohibition every state adopted
tied house losses sensually
divide industry into three
groups manufacturers which would
be wine makers on wine grape
growers -- the distributors
and and wholesalers who
essentially take of manufactured
product who then distributed
to retailers or the third
tears over the years many
many exceptions have grown so
our code has gone from like this
stick to this there -- in every
single year each of the you
probably have someone who wants
a tight house exception coming
to your office -- asking
for and why it's a wonderful
idea in a lot of them really are
wonderful ideas -- but
it's it's created a situation
where our laws we have become
enormously complex traditionally
distilled spirits are the
most are the most closely
regulated because of their
intoxicating of fact -- beer
next so mostly because of
the history of how it developed
in prohibition it was really the
vat and distilled spirits almost
to a lesser degree were were
some of the biggest concerns
in terms of abuse of alcohol
in the beginning of the end of
the twentieth century arm and
then wine has a special place
and even though in some ways the
laws of the most complex related
to wine it's because you really
have the most exceptions from
the tide health system right
so you can actually operate as
distributors you can distribute
your own lines you can just
read other people's winds
most manufacturers are either
not allowed to hold retail
licenses at all or with rarely
very narrow exceptions wine
makers actually can hold --
retail licenses in a variety
of forms with some limitations
but generally you can operate
restaurants -- and you can
operate off sale you can
operate liquor stores a again
with with with various --
-- exceptions and rules apply
to them but I think that's
largely the the exceptions for
one have largely been because
it's been let it was less of
a concern in terms of alcohol
abuse historically and then
your industry has just done a
fabulous job of promoting itself
and promoting wind as food and
part of lifestyle as opposed
to something that's primarily
intoxicating that is a huge
achievement for California wine
-- it's something the A. B. C.
supports and it's something
that you need to preserve and
continue always important to
emphasize the value and what
you do and what you bring to
California -- the other to
the other -- parts of the
manufacturing sector certain
sector of not traditionally been
as effective but but they're
getting their rights so craft
beer for example ten years
ago Joe off pretty fledgling
industry and now largely due to
pioneers in San Diego actually
-- huge part of a lifestyle
as opposed to just alcohol as
a commodity right and distilled
spirits are are starting to come
along there's a crafty still
movement in California that is
still in its relatively nascent
stages but -- there is a mention
of the joint tasting rooms with
beer and wine and thanks to ms
act we are curry there will now
be craft distillers in their
group so you're now going to
have these up potential for
some really fantastic locations
where you're going to have the
three core three types of our
call with craft orientation
there's a place in Sacramento
right now to is developing a
space like that and they're
gonna have also all these craft
kitchens along with it so here
is small business at its best
here is an ability to actually
bring us all together in a way
that promotes again California
food lifestyle and the place of
alcohol in that in incredibly
responsible and and forward
looking way so that is that is
great -- other things
however are a little more
confusing for wineries such as
-- marketing right online
marketing that's true for all
industries very -- it's
a very difficult land say
to get your arms around
because there's all kinds
of prohibitions on primarily
retailers and manufacturers
advertising together to me
we've made of right we've made
a variety of exceptions their
winemaker dinners there's the
abilities of wine makers to
provide tastings at retail
outlets -- but again this
goes back to the the history
of tied house in the sense
that one of the evils of of
-- of the alcohol industry
prior prohibition was
pumping cheap alcohol all
kinds advertising it to be
primarily poor communities and
creating tremendous alcohol
abuse problems so those
laws still exists today and
and we need to take a better
look though at how they're
changing and evolving in ways
that actually make work don't
encourage access a good example
just plain social media right
so right now you can post
the names of retailers so
they can find your wine but
you can't allow anyone to then
take a picture of themselves
out a retailer and post on
your website and now it has to
do with prohibitions between
a about the ability of a
manufacturer to advertise for
retailers not really what was
intended -- and something
we should be looking at to
make that less confusing more
intuitive for people but but
if someone of the nature of
the tide health system in the
exceptions have been made --
it's just complicated but were
really there to help people get
in front of that if you have
challenges in your industry
should come talk to us we can
find solutions for you because
are you generally ways to make
things work the don't raise
those kinds of concerns for
us -- as a secondary I want
to mention in terms of all
being issues of concern to
the industry all of our call
industry is by twenty twenty
one you're gonna have to have
all the servers in your tasting
rooms trained in responsible
beverage service that's going
to be true for all servers in
all aspects of the industry
in California we estimate it's
anywhere between eight hundred
thousand a million people which
is really -- just a staggering
number but it just goes to show
the size of our hospitality
industry -- it if the law
rose out of a terrible thing
that actually Kerr down here
on a camp Pendleton a marine
gotten this car and it really
really drunk anyone often he
killed three medical students
and critically injured another
one -- and so what out
of that effort was the kind of
thing that really pushed over
the efforts to have responsible
beverage service has a right
now though we're developing
regulations were trying to
make it as easy for you as
possible we know you have to
keep track of tons and tons of
government requirements we're
trying to make an automated
system for you that'll minimize
the administrative slash
bureaucratic burden and then
the final thing I just want
to mention is cannabis --
lots of lots of stories in
the news all the time about
people putting cannabis and
whine about people having wine
and Candice pairing dinners --
all that is entirely unlawful
-- the the statutes are clear
that you can have cannabis now
call together which got to do
in the privacy your own home
you cannot have it in any public
establishment -- what I would
say about the stories about
cannabis and wine cannabis and
beer cannabis now culturally the
tend to be a little over blown
in the sense that for every
ten complaints we get we go out
look at -- maybe one anyone's
actually doing something
so I think the industry has
been really responsible I
think they understand that
probably not a good long term
business model to mix these two
narcotics in essence together
and keep them separate so we're
we're really trying to provide
people guidance -- some in
the industry of come with to
us with ideas about de alkyl
alcohol Ising things there are
ways to do that if that's what
you want to do and make it
legal again we're here to help
you on that but generally our
philosophy is cannabis now call
should be separate so thank you
known great job travels with I
know we're gonna of questions
here just a bit so we've heard
from an individual Ventnor
we've heard from the state now
we're gonna be hearing from
association about -- all issues
of regulations and rules we're
grateful that Mr McDonald is
here he's the president of
the association of African
American men years he also
is an owner and wine maker of
vision sellers miss McDonald
we're grateful that you took
the time to be here welcome --
you have five to seven minutes
in the for sure Sir thank
you everyone for inviting us
to take part in this -- one for
discussion -- does a couple
errors on the back of the
sheet where it says winemaker
an owner of vision sellers
I'm married to miss little
you don't own anything so
I -- I make all the ones who
vision sellers were you that
don't know about vision sellers
you can watch the del Mar if you
get a and you can get aye why
is there -- but I'm here base
so talk about the association of
African American then this is a
new wine dinner is anyone is all
over the country and as I would
across the country doing these
wind and as I got back home and
I was really excited one day
and I says the national us you
know wanting something going on
here and she's is what you're
talking about a so you know just
got to swing into North Carolina
Alabama and Texas and there
was no African Americans in my
dinner I'm Anne my Danish
and she looked at me and she
says well hunting there's not
any in California Inyo dinner
so it got me to thinking
about you know why so
talk to a couple buddies in two
thousand and two thousand and I
kept going talking about it and
I got together with some guys
and we start at the association
of African Americans in the
nation yes folks it's not a
black thing yesterday more
people's to drink wine quite
frankly I don't care who won
a drink I just want people
to enjoy a glass of wine
so I put together this group
with the idea that we're
going to spend time in the
African American community to
talk about why and
consumption of wine and I think
you put it very bluntly here
not red fox report not that type
of stuff when I'm talking about
you know Ryan did you can enjoy
on a daily basis or weekly
basis will every other day or
whatever you I and I looked
at it I thought the wind was
really small business back
when I was really getting
going at this stuff really
snobby it was kind of a little
actually and I'm just going
to give you my opinion I
don't care if you have with
eighteen point five Zinfandel
which will catfish topical
issue -- money to spend
with that concept -- we
started this group and we
do things that can Harlem
of Philadelphia south
Dallas one is points
throughout the country to
get more African American to
appreciate wine it is a five
oh one C. six organization
and bass -- what the mission
of the organization is to get
more folks understand line I'm a
great grow -- and I'm economic
bottom line and I want to take
that information that I have
along with the other members of
the association and share that
information with others who
are trying to get into the wind
business now some time you may
reach up and it says -- mac and
the other African American have
to work harder to accomplish
their goals I don't agree with
that I think anybody in this
business you better be able
to work hard I don't care who
you are high small you on big
your you gotta work real hard
you may have to work a little
bit harder -- as a small and
wondering -- because of the
challenge for the association
of American business is how
find out into the market
that's been a lot of time
out there yep yep he was out
there that know what they're
doing -- you distributors
still -- well take you around
unless you produce a lot of on
an even bigger really having
a product you know just to do
that traveling feeling all when
you're going to let you know
that type of stuff you know
so I got a rules you know tell
them okay market would you go
to pick Mullin running around a
lot of food and I'm a beginner
so I'm trying to get that the
into the -- African American
associate to the Afghan
association for people who
want to get in the business a
little understand those rules
and if I was his instrument
-- I'd have to say your
honor thousand conditions
I would bring you don't
either because they have a
lot of expense in a lot of
-- cost you you know to help
you build your brand so the
idea that I'm trying to do
with the association is come
together as a group and then
all for these distributors
you know thirty forty
thousand cases are wrong and
then they may want to put
some effort like has market
aligned with a lot of
us Senate on yeah I want
to hear nine and June
-- and that's a social but --
you know when slow was felt
that they were kind of free
and I kind of keep that in
mind just to have withdrawal
-- we also put non aligned
cam this summer we've been
able in the past to send some
student Chau -- you know
for those troops middle class
is just about perfect okay
but there are other colleges
and I'm working with you know
a Texas tech and what taxes
moderation over to where
you can go to those classes
and learning about wine and
then you'd be more than happy
to be more successful this
to talk business on here and
all my men have talked about
these rules and regulations you
know I don't know that that's
what we thought may compress
drummer could ripple and done
a bird is because it was in
the neighborhood thank you for
explaining that can make a lot
of balls anymore another
time I'll be around to chat
with you about the association
of American business and how
may be able to assist us --
on here I got a good and then
I will listen thank you for
your time eighty so much as
Madonna we're grateful you're
here nice job today thank you
would like to go to open it
up to the committee to be able
to ask any questions or if you
have any comments who would
like to be able leaders saw I'll
be more than happy to do that
our culture so I'm gonna ask
a couple questions -- Linda I
really appreciate you telling me
before we met earlier and also
express -- well how you work
with UC Davis online classes
I was not aware of that and I
live eleven miles from UC Davis
so could you show just a little
bit -- how that works do you --
you know I was just thinking a
Mister macdonald is a good way
for maybe some of his people to
be interested in getting into
wine is being able to use the
online -- classes and I think
that's really -- so how that
work well it works is that
you know we require the the
the person to go to the class
now we didn't do this stuff
for start go to the class once
they complete a class then
we reimburse that money back
because you know we we did just
want to pay somebody some money
and they decide they want to
go to class so that's that's
how how that works but what
we we found in the past that
it is very very hard to find
you know African Americans in
a position to even attend those
classes because the the kind
of friend of the business --
overall -- when I do these
classes and all these community
they think this is still a
snobby gaming so when we got
all the chain that snob in this
is a wine and that's what I
go to the philosophy is your
money and whatever you want to
have with your line that's your
money you spent the way you want
Linda how do you do
the apprentice approach
apprenticeship program as well
okay a let us start with the
UC Davis op which was is a
wonderful resource for all of us
-- it is the nationally
and internationally -- the
online program they have is
is the one makers certificate
program -- which is out
a wonderful vehicle for
people who yes such as myself
living not near UC Davis having
a job and family at home --
to be able to access that
knowledge and information
through the on line venue
and and the subsequent chat
sessions that go with that with
that fellow class members and
then you people from all over
the world -- is part of that
-- class that you can exchange
ideas and information and
and really develop some some
friendships that way too so
I I was if -- if should
we travel to Chile Argentina
as we could I could email
one of my classmates and we
can connect up and so you build
some collegiality there as well
is as it being a wonderful --
source of information -- those
classes for that why makers
to the care program are fairly
pricey -- but the but
you pay for it did the ease of
accessibility for that I think
other venues where people can
get similar information would
be -- currently through
-- such as sat San Diego State
University has in town here
has a program for wine business
and they go they look at the
business aspect of that starting
to integrate a couple of
hands on classes -- with
a little bit of information and
exposure to wind production but
then again our community college
system -- is is really
I think that pretty much the hot
bed for ease of accessibility
-- both in distance and in
expense -- and that's that's
what -- our apprenticeship
program is working to to
build into besides having the
apprenticeship itself to start
building in viticulture and
wine production classes one of
our community colleges mayor
coast up in in north county --
has had a one production and
that a culture class there for
a number of years now and --
they they they are regularly
full classes so it there there
is a need beyond people that
are looking for the work force
-- in the wine industry here
we have quite a number a large
number of home wine makers home
backyard wine grape growers who
who really have some substantial
-- he cringed at the plant
their own grapes and make their
own wine and and always want
to learn more too so I think --
we have lots of accessibility
for people on all levels
with millions of the complaints
at travel Smith did you are
chairman of this one as well
that's okay okay center dot
so I've got one for you
Smith OB you talked about the
complexity of of of the the
rules and regulations of a
that I think the the -- the of
people here would be interested
in hearing what you do
to -- -- inform
licensees of new rules and
regulations or existing or
what could existing licensees
due to stay up on it themselves
so new regulations we
really don't have because we
don't have a right we haven't
had a regulatory unit many
years so we've sort of call
them out here and there it's
really something that is
lacking I think that in this
coming budget year -- we're
gonna probably get the funding
to do that because there's a
lot of things we could do --
proactively that would actually
be beneficial for the industry
unlike most regulatory agencies
-- our regulations are less
designed to stop people from
doing things that actually to
help them do things because
in California law you can't
do anything unless there's a
statute that's been California
alcohol you cannot do anything
lesser stature rule that says
you can so like with the social
media I think there's lots of
things we could put in place
would make that workable for
them -- but in terms of issues
where we think things are
difficult we do issue industry
advisories so we've been -- as
the as the statues have a vault
that we have -- been issuing
advisories on cannabis for
example just to make it really
clear you cannot do virtually
anything on an alcohol premise
with cannabis and vice versa
-- we also -- are make ourselves
available -- to licensees --
particularly we we can't just
give day today advice but as
particularly when there is
issues that are impacting the
industry -- we try to work with
them and then let the industry
groups no we work really closely
with the one is to with the
family wine growers and then
we're also really excess will
come talking to people servi
time I'm at one of these things
I always say I will come speak
to your group if you want me to
-- and I actually did that in
-- -- house a roll bliss and
I'm gonna be in Monterey to
speak to the Monterey vendors
next month so that's something
that's really great because
we can put out information but
also we we just learned a ton
of stuff right every time we
go out and we're in the field
actually talk to people so so
take to the long way of getting
to we do as much as we can we
should we should we're we're
not institutionally set up to
be a systematic as we should
and that's something we're
working on I
think it's transit issue
questions comments please
mentally of a really quick --
my district includes fall broke
pama valley center Escondido
parts of simple school family
in San Diego county which
we're seeing more more people
getting into growing grapes
and when I had attended the
San Diego vintners association
meeting a little while back
-- I remember one of the
things that came up because
more and more people cutting
down the row of a kind of
trees and now starting the
plan vineyards because of
the cost of water especially
I'm and I I remember and I
don't remember all of it but
the vendor's association is
very active in helping people
figure out how to navigate
you know setting up their winery
coming out to visit them can
you speak a little bit about
that like how you encourage
people when they have you know
an interest in starting up
in your well that's one
thing that we that's that's
a real positive about being part
of San Diego county veterans
association is because we are
spread all over the county
there's somebody that's going
to be next door who wants
to start up or just thinking
about it -- has a friend and
we are all of our members
were all glad to share our
our information and experience
in and help introduce people
to others that may be able to
help give additional help and
support -- but we're we're
very -- supportive association
and and work cooperatively
together to try to to make
these things happen we also
bring in outside speakers
-- experts in their field to
talk about -- putting in
vineyards and add vineyard S.
practices for for vineyards
and and wineries up because
I mission is to make sure
that aye wineries in San Diego
county are making it the best
wine that we can and keep
moving that toward increasing
quality and and having
people have a real positive
experience streaking San
Diego winds and seek them out
to hope I answered your question
I wanna thank you to the
panelists for a great testimony
to this not might for tech this
is not my area of expertise
but -- but yeah I mean all you
adding really human element to
help books of myself understand
-- we don't have you experience
is an industry actually the
question for the doctor if
I may and nobody puts on a
taught in a tough spot I know
because sometimes be difficult
Astarte directors like nature
of your business you're kind
of generally in those right I
just wanna make the observation
in my district offices in our
state building here in San Diego
I see many of your staff that
worked extremely hard they're
very responsive to my district
staff us some of whom are here
today -- on issues of great
concern we have about alcohol
consumption in the seventy eight
gas and district Pacific beach
north park -- I know oftentimes
it that is initially felt by
-- make it how Californians
who may have complaints or
concerns of from a budgetary
perspective what would you hope
that we could advocate for as
legislators I know there's a
lot of calm conversations within
the caucus on what we have is
party you sort of alluded to it
but he put a finer point on what
we do from resources you think
would be helpful -- to making
sure the department can be --
with the with the to the workers
who are clearly working really
hard -- are well supported
answered the constituents that
we serve field was supported
by the department as well --
so so are our biggest challenge
has been -- really modernizing
our electronic services we
finally got money to go through
the state approval processes
to to have online payments
-- to have online applications
-- to provide industry industry
members with information
that's automated and members
of prevention community one
understand what's going on of
right now we process a hundred
and fifty thousand personal
physical touch paper checks a
year because we can't accept
electronic payment which is
just embarrassing at annoying
in a Paris and center on so I
think we're on the right road to
that -- but we also
just on the enforcement level
-- we're trying to automated
some of that to make it more
efficient we just don't we just
don't have enough people --
but but I I don't want to sound
like a typical you know state
bureaucrat always complains
about resources but I I really
do think finally we've gained
some traction with our control
agencies because as I said at
the outset you know we have
to more people than we had in
nineteen fifty five and we
have now you know about three
times as many people in the
state and more than twice as
many licenses so we're really
trying to modernize our balls
I don't think it's that much
bigger than we are it's not
some gigantic growth curve --
but it's really in the areas
of trying to automate mourn for
spent and then some -- field
staff particularly I would say
in San Diego and Los Angeles
where we have -- as no just
of a very involved community
we we work for the pro tem
as well really well -- very
involved community both in terms
of entrepreneurs but also in
terms of people concerned about
neighborhoods lots of protest
lots of complexity same thing
in Los Angeles so that's really
what we're trying to get to is
is is us a real
to think is relatively slight
growth it'll actually modernize
is in a position us to be left
behind the curve and exits
quick follow up even if you
on the path to kind of getting
the automation that would be
reflective of the state of
Silicon Valley and -- what would
actually cost to get their image
on the past but like was how
much will it takes that sound
like a one time costs are now
we have a as a seventy five
million dollar annual budget
and what we've real what we're
projecting that out to be is
really in the neighborhood of
about a million dollars so it's
it's it's not huge dollars it's
just -- we we've just been
as you know everyone in state
government have been relatively
Oster austere is that authorizes
that on money an author on
no but it will be we we've
gotten to the project we're now
going to have numbers that come
out of that stage to the power
process sorry for anyone outside
of Sacramento doesn't know
what powers but it's the state
approval process for project so
we will have a budget come out
about that we hope is going to
make it into the January budget
okay please keep us posted I
spend any happy advocate for
that the budget process step
and keep very much when your
comments and I have all those
communities are very active
in concerned by neighborhoods
never ever going to complain
about a wine -- bar so thank
you to the industry for being
good actors and and and risk
the neighborhoods where -- this
is often a sense of such a big
the switch is quick question
-- Mister director when you
take it take a look at wineries
and now they're looking at
additional revenue input into
looking at -- developing spirits
on -- with a different license
so you have one family that may
be operating a winery and then
also -- establishing a business
that is running spirits and then
they have a spirit club like
they want to be able to have a
wine club but they can't ship
spirits like they can ship wine
in state any thoughts on that
-- well they can ship spirits in
the state -- not to a club at
the mall right well that's right
-- that is something that
-- I I don't act to tell you
that you have not really looked
at it closely but there are --
there are generally what work
just concerned about mostly is
-- is that with with spirits
that -- we were just
not putting them in the hands
of minors etcetera people should
not have them sure I'm spirits
also just have had a much
more traditional distribution
system notes largely because
of the potential danger of of
spirits that are -- are
poisonous for lack of a better
way to put it there's a good
reason why one of the one of
the best things about the three
tier system is we just don't
have a lot of alcohol poisoning
based on -- defective alcohol
in this country and one of the
arguments for that is that we
actually have a distribution
system that prevents retailers
from getting -- tainted
alcohol now but direct shipment
of course is another thing
altogether but I think that I
also in individual right now in
a at will belabor the point and
go off line on this but if if
I wanted if I belong to a spear
club though like a wine club I
can go in and buy for example
four to six bottles and walk out
with them -- but
I can't get a mailed to my house
so that's just -- a piece --
if your club -- but anyway it's
it's it's a conversation for
another day do understand should
be anything you're hearing on
the federal level that's one
of the biggest challenges that
we hear from vendors shipping
out of state I'm in it is
become incredibly challenging
with UPS and fed ex except ra
anything you're hearing on the
federal level that -- will there
currently is a challenge to --
to the titles laws that in the
U. S. Supreme Court that may
actually change the way some
of this works I am myself --
defendant just by virtue of my
position of case in Sacramento
were an out of state shippers
trying to ship in the California
and ways that we don't allow
their trying to ship one --
the the part of the problem
of course is that under the
twenty first amendment states
can do whatever they want they
don't have to allow shipping at
all or they can restricted
anywhere they want the ability
to actually standardized out
is probably not something the
federal government can impose
what would be a better approach
would be to try to get the
state's to actually come to
agreements themselves to make
it simpler so that we don't
have to go through middle men
who are specialists to take
away a lot of your money by by
being in the business of that
because especially with wine
again not a product were is much
concerned about the safety of
the product that as we are with
spirits and told to a slightly
lesser degree here thank you
so much stricter just two last
questions -- madam chair Mister
chair is a to miss make Williams
and then -- Smith Donald can
you just give us an overview
Q. Sealy -- is your when you
for example like a custom crush
facility where you're buying
fruit are you buying just use
would love to be a they give
us a quick overview on that
-- and -- your your operation
and then Mister Donald if you
can just give us a -- overview
in California how many African
American wine makers would
you say there are here in
California even if it's in a
total -- as well as those who
are -- involved in growing
as well please Mr claims --
except as well winery and
we buy grapes and
and do all the the question
manufactured production in are
bonded licensed facility --
and I believe that that is
the the operating procedure for
most wineries in the county at
as opposed to say a custom crash
-- AB as more small
backyard growers are
joining together with their
friends and neighbors I think
they're starting to advance
to a point where they are
looking for something such
as a a custom crush facility
-- to process their fruitful
for themselves their and their
group so I I believe that is
at in expanded market here in
in the county I can think of
one the two wineries that are
are working towards that are
planning to work towards that it
at this time so I I think that's
going to be a growing area for
us here in San Diego as well
Turkish a question about after
American growers gonna give you
an estimate about twenty five
-- -- who are wineries
in as about thirty years so --
growers with real small growers
you know for example you know
Michelle and I you know we
we we just from about twelve
acres of up a PMR approaches
are most my print from other
growers I like it that way
because I don't have all of my
aches and wind up you know so --
we -- we -- we think the
-- lan as you know and
Sonoma napa county is really
really expensive and and
-- post everyone in this room
can say lets you have a whole
pocket full of money you know
this is a tough business to
last two days and then plan in
a payment could four years or
so before you get anything off
of it if you getting hit off of
it and you can make world class
wine but you got to sell it so
it takes a lot of dollars to
get into that so collectively
what we trying to do is come
together so we can help each
other out and help the wine
industry on the to save time so
that's the best dressed to go
look around and look at all the
stuff is going on mowing the
folks popping up in that is
both a smoke met right under
my nose and African American
and I only over there are are
probably get ten calls a week or
ten emails a week -- someone
in some parts of the country
want to grow grapes and you
know what the hell I know about
what type of Georgia you
know I have no idea so --
but which is of course a growing
business operation question
for in
okay thank you all very much
-- we're gonna get to the next
panel now I really appreciate
your participation thank you
the second panel MailChimp
smelter and fill long senior
weather coming up I think that
what -- -- Mister macdonald
-- -- but your brought
up about the expense and
everything -- of what they say
in napa is you know how to --
a small fortune in the wine
business start with a large one
yes -- he spot on commodity
get let's let's lighten up here
a little bit okay thank you
so it's it's my great pleasure
to welcome by the next panel
it will be discussing years
how federal law is impacting
-- the California wine industry
is important topic our first
-- speaker today is still long
senior and he's -- wine maker
and founder of logic hit
longevity winds -- feel long
begin his journey making wine
in the garage with his wife
Debra now with -- close to
two decades of wine making
experience in a list of awards
too long to Pratt bill continues
his journey constantly improving
he says in the business of
wine making the minute you
think you know what all it's
time to get out that's kind
of the way it is a politics to
-- feel begin making wine in
the Livermore valley in two
thousand six other longevity
label using other facilities
it was only a matter of time
before production -- was moved
out -- from other facilities
to longevity is own facility
in the Livermore valley --
yearly production ranges from
five hundred to three thousand
cases fill also serves as
incoming vice president of the
association of African American
bidders bill thank you very much
for being here and what do you
get started will thank you thank
you everybody for having me
Assemblymembers senators -- is
great to be here so good morning
-- I guess I'm a talk a
little bit about some of the
challenges were facing it really
relates to small business in
direct to consumer shipping
and I know this is such a
pond earlier the bottom
line is every single state
in our country has a different
set of rules permits and
regulations for shipping
wine into their state
for direct to consumers
if you want to ship wholesale
into their state and have your
one distributed to the state
that's another set of rules
regulations permits registering
if you were just to try to file
literally permits in every
state that allow shipping into
in the United States it would
be about fifteen thousand
dollars out of your pocket
just to get the permit is
then you will have to do up to
for reports per year
per state the compliance
work is an absolute
night so that being
said it was brought up
earlier I to use readership
veto shipper is kind of a god
send because veto shipper is
a third party shipper that
literally garner's all of those
permits in all of the states
that allow shipping to
and they add as they can as
they become available for
a small fee it it actually
is a fairly small fee I
believe it's four seventy
five order and seventy five
cents per bottle is their feet
in essence they become
your distributor they
distribute your wine and
it's kinda cool I moved I have
a little bit of web background
you build a store there appears
on your website that looks
like your website through code
you're not really making the
sale very making the sale
so they're taking the
order they're taking the
revenue and their depositing
in your account your portion
minus their fee every two
weeks so they're kind of a
god send but there are things
on the horizon there are
going to make it difficult
for all of us especially small
business year is a new
all on line age verification
law there is more
than just today you can't
sign for wine if you're under
twenty one periods on every
box it goes out you have to pay
the additional fee to whoever
using to get the signature
there's a new law that is asking
for the age to be verified
at the point of sale online
that's software starts at around
seven to nine thousand dollars
I can't afford that the
what that's going to do that's
going to give veto should
for they're going to have to
purchase it because they're
making the sales but then that
obviously trickles down to the
smaller wineries and we're gonna
our fees are going to go off
so there's that's making
it difficult for direct to
consumer sales in general
and not everybody knows
about veto ship rear --
once the don't are still going
state by state trying to procure
Lysons wanted time and trying
to keep up with the compliance
paperwork -- before we had
of Reno shipper we had licenses
in other states as well it
doesn't matter if you don't sell
a bottle of wine usually have to
file the paperwork every quarter
so they are kind of a god send
there are challenges coming for
all of us there's also new move
with the started in New York
that possibly wineries websites
need to be AT a compliance
right okay --
I understand eighty a need
they have their needs but I
don't think it's tops with
wineries doesn't that become
every website on the planet
so we do have our challenges
-- veto shivers definitely
helping with that
in the end for us
we have phone it is actually
easier to ship to other
countries than it is
to ship to other states
UPS is partnering with small
businesses and wineries to
help remove them in offering
all sorts of special services
to small people who want
to ship across the sea
and we are moving in that
direction because we don't
have to have a life state
we don't have to register
we have to pay taxes and --
-- duties but the
okay but you're doing that
per country not every time
for state four times a year
so the director
consumers will be coming
it never having a difficult area
for us and a challenge for us
to get our product to consumers
are the solutions beyond
veto shipper I think it was
mentioned earlier if stage could
just come together and talk
maybe that would help --
also want to thank the ABC
for the tax break I mean come
on thank you for the excise
taxes that's a big help
-- the other thing
that is obviously affecting is
even across the board is this
whole terror finger to work
it's -- affecting us in
both directions most of
the small business small
wineries use imported
glass usually from China
as of September the chair of
his ten percent on imported
glass from China as of
January one is going up
to twenty five percent
that not only drives my
Costa even my glass supplier
is wondering if he's going
to be able to stay in
business with those types of
in of terrace imposed on
glass so situation three we
we can't get our glass for
what we used to and if we
want to ship to try to --
by the way there's a fifteen
percent tariff on that too so
I think for the small business
the direction things are
going is becoming more more
difficult when you're a large
corporation in this industry
to look you you can source your
glass worldwide I mean you can
go wherever will just go to
this country is that we can't
we can't do that the that's
just not feasible for us so
I know someone contemplating I'm
not understood of listen server
issues in getting our
product to customers and
the process in the
regulations to do that --
I also heard mentioned earlier
looking to go through through
the names about workman's
comp insurance which we're
fortunate to have in our water
but there was a whole big who
-- actually that happened in
our Valley they shot the winery
down they used to use volunteers
and someone got hurt
an unfortunate the owner not
the best out of to the world
didn't cooperate and he got
shut down after about a hundred
and forty thousand dollars in
fines I think there needs
to be a way we can offer workers
comp insurance to volunteers
is a huge the industry's use
volunteers for hundreds of
years and all the sudden one
answer without one it's gone
instead of finding a way to make
it work it just has gone away
so anyway those are my main
issues -- little bit about
the winery you know we're
we were the first urban
winery in the Livermore valley
-- we're the forty third were
now somewhere between sixty and
seventy -- our fruit or close
truths across the street
from will have to go that
far for a ninety five percent
or -- Livermore alkylated
but winds and we're just mom
pop were between three five
thousand cases and trying to
get our product out there --
we also use readership for
we do a private label for
-- let's just say someone in
show business the we use
in our support for her wind
as well so I think there
there's some hope but there's
some challenges as well so
thank you for your time thank
you this long will be -- taking
questions after the next speaker
speaks in that speakers Tim
smelter Tim has been the
vice president the California
state relations for the wine
institute since two thousand
sixteen previously seltzer
served as the White institute's
director of legislative and
regulatory affairs for eight
years his most recent focus
has been the environmental
and labor policy areas needs
also advocated in the alcohol
beverage control law and
taxation policy areas arenas
use me -- earlier in his career
Schmelzer service the manager
of the state legislative policy
for southern California Edison
and the legislative director
for the California energy
commission in total he has over
twenty seven years of experience
working with California state
government smelter was born in
California lives with his wife
Karen and three children in
Sacramento welcome to hold my
very good well -- thank you
-- chair persons of all of
you and -- also great to
see you -- some remember
Gloria and Waldron --
so as you know you've got the
vice president for California
state relations here for wine
institute to talk to you about
federal and international trade
so go a little little easy on me
-- today -- I think you're all
aware but -- one institutes
-- essentially association
California wineries -- we have
-- just under a thousand --
winery and associated business
members -- throughout the state
and -- advocates on all levels
-- pretty much every issue
her today somebody on wine
institute is is actively working
on those issues for example my
colleague -- Steve gross --
has a -- phalanx of folks
working in every state in our
country -- helping to -- work
with these like direct to
consumer shipping issues -- and
-- yeah it is sort of ironic
that you mention sometimes it's
easier to ship overseas than in
the state in the -- state and
-- it occurred to me just one
quick comment on that up one
institute -- was -- one
of the big -- organizations
that help with the formation
of an organization called
the worldwide trade group at
-- this organization that is
goals to get member countries
together to kind of standardized
-- the rules and regulations
related to the import and
export of our wine products
-- something that maybe we
could look at to do within the
United States of for example so
-- in any case -- what I want
to talk to about -- today is
some of the issues once it's
active on -- in Congress and
also -- touch upon just a few
the international trade issues
-- that were active on these
are gonna be by no means -- all
of them but I I thought I just
point out some of the highlights
-- so first of all -- our top
priority right now is -- to
extend the provisions of the
-- craft beverage modernization
act -- this past of just
over a year ago and represented
the first time in eighty years
-- that we've seen an excise tax
reduction for our another
-- of color products -- the
unfortunate part of getting
that done is we had to --
to compromise essentially and
take a two year -- extension
when we are pushing for --
permanence -- so we are
-- working very hard to --
to get in place legislation that
would extend that permanently
-- we think that there's broad
bipartisan support for this
and it's really a matter and
Congress of finding the right
vehicle an opportunity to make
it happen -- this is something
that -- I think you all can
help with and talking to your
-- congressman the represent --
your areas and encourage them
to sign on -- one of things
that allowed us to get that
legislation passed in the first
place with a huge number of
co sponsors we had in both the
Congress and Senate -- we did
not have every California member
signed on to that and it's a
goal of ours to get their -- I
know some of them are like Mike
Thompson representing several
of you guys he's obviously
signed on to that but -- --
anyway it's -- whatever help
you can do to push your --
congresspersons to support that
-- helps out effort --
we don't think that it's -- of
any consequence -- relative to
the -- it passed the bill
that the house flip to Democrats
-- due to the bipartisan nature
of this issue and in fact --
have the we don't know if
that's a plus is gonna end
up speaker probably but --
with Kevin McCarty and and
that's politically in the two
leaders in Congress both being
from California that can't
hurt our chances -- secondly
-- we've been -- working really
hard for a while now -- on the
farm bills -- we think that
there is a -- very decent
chance of the farm bill -- get
extended another -- five years
during the lame duck session
and -- the couple programs in
there that are -- -- consequence
to the wine industry are the
market access program commonly
referred to as the map program
-- this is the program that
funds -- the export -- programs
the -- bummer with that is --
we've lost a lot of funding
from that program over time
-- findings remain flat from
Congress where more and more
people of that have been
applying for that funding -- we
once were receiving -- fifteen
million dollars a year for
that program for to support the
export of United States wine
and -- we're going to consider
to win this year if we get
eight so it's it's been pretty
dramatically reduced over over
time -- that's something that
we really hope to see more
funding into that program in
the future -- it's only
the entire map programs only
two hundred million dollars
which is a very small piece
of the overall farm bill
-- the other -- it in some
context for that by the way
the overall funding for that
-- market access programs two
hundred million dollars that
is still less than and the
European Union has just for one
so that's the in there's
many other countries that
export one as well so it --
compared to other countries --
you know I I think our country
frankly could stand a step up
a little bit in this in this
area -- the other element
that's -- importance -- for
us out of this farm bill is
specialty crop funding --
this -- fortunately has received
a bump in funding in recent
years it's likely remain flat
and the new farm bill that given
our games in the recent past --
that's something that we're not
overly concerned about -- the
-- projects that are importance
to the wine industry they get
supported for that are -- in
particular -- work on -- past --
-- past programs and -- the
TV quiz Pierce's disease class
wing sharpshooter program of
-- great importance to our --
winegrowers throughout the state
-- we expect to receive access
small increase -- for that
program this year -- which
would be -- pretty happy about
-- looking to see a fifteen
million dollars -- into that
program that's in addition to
money that -- growers themselves
put in -- through an assessment
-- also us the specialty
crop block program is a --
importance to the wine industry
and in particular -- our work
on the California's sustainable
-- wine growing -- field
a lot of -- work to --
develop that program into --
the ability to -- influence
regulation and doing research
to support -- new sustainability
projects is funded from there
and we had a -- nice string it
success in getting getting those
-- program so anyway if the
farm bill -- gets done and this
lame duck session great -- at a
minimum -- we -- look to get
that -- work done by July first
which is -- really kind of art
timeline when that funding is
going to become critical for us
-- and I'm gonna be from here
to -- international issues --
the -- now after --
the new agreement called the --
ischemic this is
I cannot get it U. S. Mexico
Canada agreement the the key
thing they screwed up here
is given it city Akron and
so anyway -- this is actually
-- set to be signed -- to Morrow
and -- when it's aye Reyes of of
all places and -- this
is something -- we are actually
quite excited about -- this all
some of the key issues -- we
are having an trade -- you may
not be aware of this but Cañada
is actually the number one --
trade partner for U. S. wine
and -- one of the key features
-- in this agreement that is a
huge to us is -- we had been
fighting with British Columbia
-- for -- what we considered
unfair trade practices
in the ability of our winds
to be placed on grocery store
shelves in British Columbia and
-- as part of this agreement
-- they're going to be changing
their practices and -- our
access to the Canadian market
will be greatly improved --
it doesn't solve all of our
problems we have similar issues
and Quebec and Ontario that
-- we're going to continue
to work to work on but the
such an excellent president
and -- we're we're quite
pleased -- that this agreement
occurred so was a real positive
development for us and I think
worthy of our industry support
on a less positive note and
and frankly there's nothing
positive to say about it is
-- the China terrorists have
been devastating and they're
going to get worse -- before
they get better -- to date
our -- our members that ship
into -- this growing market and
-- since for for context right
now United States is the number
one -- wine consuming -- country
critics take that to
within the next five to ten
years so this is the market
some days
and because it's so
painful -- this is
becoming a system
retailers are scheduled
to go again soon
to the point where -- with
tax into before we even
had a retest so we see
a hundred percent markup
this this --
to give you an idea what kind
of disadvantaged with products
so so
beginning in January first -- in
nineteen the correct
percent this will be
paying for every --
US one goes into China
does it have a great this is
for you to
Australian sure
the mount storage
rooms and please tell
us -- going into that
country as well --
I just think it's a
to -- for us
-- again this one's side
I was sad development of
construed to frankly
see this one right now
it's just so
I wanted to mention
we can sit situation
-- this is a important
thing to us and as
-- the United Kingdom is the
number two -- export market
for -- American line and when
I say American line ninety
percent of that is from
California so I'm just be a
nice when I say that's really
California -- in any case --
with this break that situation
-- the believe it or not create
some opportunities for for
us -- the European Union --
has been difficult for for us
to negotiate frankly -- the
-- they have a lot of fairly
protective practices -- to
protect their industries --
California is the number four
one market in the world right
as far as production -- France
Italy and Spain are the ones
that are ahead of us so it's
-- no great surprise there --
once the brexit deal is ratified
-- what happens then is we
begin negotiations -- with
United Kingdom directly and
-- it's our hope that frankly
we can negotiate some --
better -- trade arrangements
-- with United Kingdom than
we now experience -- through
the European Union so --
believe it or not there's
it's some positive -- aspect
to that -- for our for our
product -- even though I know
you know think what you will
about it in general there is
an opportunity there for for
California I believe or not --
and lastly I want to mention
-- eight new development
-- debts -- hopefully will
will turn positive for us
is of the United States is
-- entering a new -- trade
negotiations with Japan --
this is the number for export
market -- for -- wine products
-- this is -- this
was one where it was a real
lost opportunity for us -- when
the trump administration chose
not to go forward with the --
Pacific trade -- agreement --
we had negotiated -- the terrace
-- to go down to zero -- for
our products in a number of
Pacific Rim countries -- when
that agreement was torn up we
lost that deal essentially and
-- were faced with still having
to pay fairly steep terrace
in Japan while those -- Chile
New Zealand Australia -- are
all going to be hitting zero
on that terrace market deal
that we were frankly -- one
of the authors of originally
-- so this is an opportunity
for us -- with United States
-- entering -- into these --
into these negotiations and
we're going to be pushing hard
-- for -- those terrorists to
be to be eliminated completely
so we can be on equal footing
-- with our competitors into
that important market for us
and so that was all I had for
you -- I can answer questions
on this and also in the area
of my actual expertise which
is California policy for
question appears whose number
three dang it
-- yeah let me think of what it
would be -- so we have
Canada Japan U. K. -- you know
it it's -- the E. U. yeah
very good yes very good any
other questions of either
yes well maybe
you can give us some highlights
of what we have to look forward
to this year and are legislative
session as far as things you're
advocating for --
well a lot of issues that that
we're working on our -- have
been touched upon by some of
the folks that preceded me --
-- and I'll I'll mention the
issue of -- waste discharge
which was was brought up here
-- this isn't necessarily
something that -- legislature's
going to get involved in but --
wine institute in and notably
those -- San Diego county farm
bureau has been a part in
these talks is working on a new
statewide -- waste discharge
requirements -- for wine --
this is a tricky situation
because you got to get it
right but -- wanted to keep
beneficiaries of this we
believe is going to be a smaller
wineries and giving them --
essentially administrative
-- power to it to achieve
compliance and a formal
regulatory recognition of the
indeed very low risk that they
pose to the environment so
that's something we're working
on the on the regulatory front
-- on this state -- front
-- we are -- dealing with
a very difficult situation right
now -- that arose out of
a Santa Barbara that it's --
has the ability to impact --
wineries throughout the state
-- one of our member wineries
as a condition of getting a
fermentation tank -- approved
was required to put on their
fermentation tank -- emission
control device add to capture
ethanol which is a -- though
very low reactive it says on
precursor that's why they had
jurisdiction in the matter
of our concern -- is
both the -- large costs
associated with a almost
negligible improvement in air
quality but -- of greatest
concern to us here is that
putting any sort of duct work
on top of -- your from mentor
creates all sorts of problems
for your wine maker -- the
pressure in the fermentation
tanks can affect one quality
the potential for spoilage he
even varietal integrity -- can
be a risk here because these
would all be tapped into the
same -- control device so we
have -- tremendous -- concerns
about this issue -- we have
-- been in talks -- with
-- some of your colleagues
in the legislature -- looking
at potential solutions here
we don't know what that's
going to be but this is gonna
be a major focus of ours --
in the legislature this year
great -- center McGuire
thank you so much interaction
with longest day talk with us
so if you don't mind doing a
little bit of a deeper dive on
the issue of the shipping and
know that you're talking about
-- individual property by
individual property being
able to work with service but
has there been -- discussion
about bringing small there's
together to be able to go in
it since is a coop to be able
to do one contract talks about
that because that that it seems
to be an ongoing challenge
-- for particularly in look
the ball from cinema county
the majority of wines are ten
thousand cases -- lessons number
county right so it's small mom
and pops that are struggling
to be able to -- figure out
how to get there their product
out -- through ship in there
has been some discussion I was
approached of actually becoming
a distributor for several
entities and as a distributor
for law center several injuries
then you assume the license
in that state and let's just
say you're doing it for general
every rule there's ten licenses
the don't need to be at
-- but then you have to go
through the A. B. C. of the
lives of being a distributor
and the complications of
being a wider industry to
the same time I think the ABC
of more of that than I do --
but it would be a process of
someone to do it is a of is it
is a part of my business I
mean I'm I'm I'm I'm cleaning
up the president didn't hang
nails should I really start
distributing did to save that
and again I think veto shipper
is a is a godsend for all
of us -- because it really
eliminates a lot of that
thank you great I'm not
seeing any more questions I
want to thank you both for
being here today and for
your testimony answer those
questions we're moving now
to public comment I anybody
from the public anybody in
the audience wishing to --
ask a question we've got the
microphone right in front
this is your opportunity to
tell your legislators what
you like what you don't like
job well you know we're gonna
get out of here on time that's
one thing will look at I really
appreciate the opportunity --
all of us do to be able to be
here to listen to the industry
this the first you know most
the time in our hearings for
the select committee on wine
we're either and napa or so the
home -- and you know we have
a big California wine industry
and I know that all three
of our chairs really wanted
to make sure that -- growers
and winery owners throughout
the state of California outside
of those areas no whatever
stay at -- that we get it
and that we have significant
wind industries all throughout
the state and what you think
is very very important us and
so I really like to take this
opportunity to thank you all
aye and now what we're gonna
do is center McGuire would you
like to make some party comments
thank you so much and Mister
chair I just want to say thank
you all the for hanging with
us today -- in this beautiful
San Diego whether -- as --
the good to some members said
in all seriousness wonderful
presentation by each of our
panelists have been able to
present whether you are an
individual one we honor and
association had indoor --
brokers in the government we are
grateful for your work thank you
all for being here in another
special thanks to the assembly
side for all the special
services -- as well as a single
now where curry's team who
took a charge of this hearing
very grateful for your work
on this and I think you Mister
died and and item leaders well
so -- what I enjoy about these
that I listen and -- we've had
numerous -- opportunities to
talk about the wanted to see
for some time and we did do
some bills last year -- for
farmworkers small farmer farmers
-- that this apprenticeship
program to the CDFA they
just actually hired somebody
that's going to now take
over that position so there
are some things that are out
there that I hope that you'll
take advantage of through the
California department of food
nag it's a great program --
it's for the smaller farmers
because I to a small farmer I
small I'm fine with my brothers
eighty acres which is not
much of walnuts but you still
have a lot of paperwork and
I have one employee and after
my father passed -- I was
all of a sudden sitting there
thought the paperwork because
he hoarded his paperwork and
his checkbook for years but we
went through things and I was
us -- just flabbergasted about
how many pieces of paper a
small businesses to go through
and so -- I will continue as
well as my colleagues is to
make sure that we can -- have
our small businesses or small
farmers thrive in I think we've
made some headway on some of
the legislation that we have
run we did the bill this past
year with the a co location of
breweries and wineries and in my
community it has tripled their
income and -- spy the best thing
that could happen to a small
business in a real community
so -- you know keep asking
us the questions don't be shy
you might know me man I want
to speak today but we are here
to listen and to hopefully
make your lives better and to
help the state of California
in this industry so thank you
very much for coming -- Marie
thank you just briefly --
it's exciting that you are here
in San Diego and we can
kind of both a little bit
about our our wine industry so
even though the weather's not
that well -- on behalf of the
some Limón Gloria and myself
representing San Diego county --
thank you for coming in as --
a chairwoman Aguilar Kerry
said we are here we're going
to continue working through
the legislative session coming
up so he and beginning of the
year the first three months
as opportune time to work with
us to get legislation going so
will you know will be happy to
and to work with you thank you
and I'm sure that -- I can speak
for assembly member chairman
gray who's on his sick bed
that he's been watching every
step of the way and consumed
all this information is right
there with us as he always is
-- you're fighting for small
business -- your from his
district so with that would like
to thank everybody all the staff
assembly and Senate really
job well done thank you
for putting this on --
Democrats and we're
gonna do you can hammer down