Company of Independent Wholesalers for VA Wineries

On April 17, 2008, the Commonwealth of Virginia launched operations of the Virginia Winery Distribution Company. The new company is the result of action by the Virginia General Assembly to provide Virginia wineries and farm wineries an alternative to using independent wine wholesalers.

Any Virginia winery that chooses to participate may distribute up to 3,000 cases of their wine per year through VWDC, which is associated with the Virginia Department of Agriculture and Consumer Services.

In the past, self-distribution allowed wineries to market and sell their products directly to shops and restaurants without using an independent wine wholesaler. In September 2005, the federal courts ruled that self-distribution by Virginia wineries was unconstitutional because it granted Virginia wineries privileges that were not extended to out-of-state wineries.

On July 1, 2006, a new Virginia law eliminated all self-distribution privileges in Virginia. At that time, nearly two-thirds of Virginia wineries did not use independent wholesalers.

Then during the 2007 General Assembly, Senator Emmett Hanger of Augusta County introduced legislation that created the Virginia Winery Distribution Company. VWDC, which operates within the existing wine distribution system, is a wine wholesaler tailored to the needs of small Virginia wineries.

Using VWDC, winery workers will continue to market their wine to shops and restaurants. However, they will act as agents of VWDC when placing orders and making wholesale deliveries of their wine.

The VWDC will provide electronic purchase orders and invoices, collect and remit all taxes, and submit necessary government reports. By contract, VWDC and the winery are sharing delivery workers, bonded warehouse space and delivery vehicles. The cost to Virginia wineries using the services of VWDC will be $5 per transaction initially.

According to Todd P. Haymore, Commissioner of the VDACS, the Virginia wine industry credits self-distribution with being the single most important factor in the growth of the number of farm wineries from six in 1980 to more than 130 today.

“Losing the capability to self distribute was a major blow to many of our farm wineries,” says Haymore. “And winemakers and wine wholesalers recognize VWDC as a creative alternative for small wineries.”

He added that the wine industry is a fast-growing and important part of Virginia agriculture, not only because of the products produced but because of the added value of wineries as tourist destinations.

“Our winemakers are good stewards of the land,” says Haymore. “They produce a product that is renowned worldwide, and draw many tourists into Virginia. Last year, Travel + Leisure magazine named Virginia as one of the Top Five Wine Destinations in the World.”

The VWDC is governed by a Board that consists of two winery owners, two wine wholesalers and the Commissioner of VDACS. David King, owner of King Family Vineyards in Crozet, Virginia, is Board Chairman.

“We are excited to launch this new company to support the Virginia wine industry,” says King. “This new wine wholesaler provides a distribution option for many Virginia wineries, especially smaller wineries that may not have other wholesale representation. It’s exciting for all sectors of the industry, wineries, wholesalers and retailers, to finally have this wine wholesaler in place. On behalf of the wine industry, I thank the Virginia General Assembly for creating an alternative to the Virginia wineries' loss of self-distribution.”

More than half of Virginia’s wineries and farm wineries have signed up to use VWDC. Fifty-two wineries are licensed to use the company as of Thursday, with 18 more pending.

“VWDC is another tool to help the industry continue its strong upward growth,” says Haymore. “With 70 wineries already on-board as customers of VWDC, I believe we can anticipate even more Virginia wine sales.”

For additional information, please contact David King, King Family Vineyards, 434/882-3200 or Terri Cofer Beirne, Counsel to VDACS and the VWDC, 804/775-7233.