Question for consumers about a 2% DTC assesment

People seem to act like there were zero consequences for hotels implementing a BID assessment…one of the small reasons for the rise of AirBnB, VRBO, and all that other comparable platforms is that consumers are tired of the nickel & diming from resort fees, BID fees, occupancy fees and so on.

All those ‘its only 2%’ keep adding up and eventually people find other options.

No matter how you explain it, it looks like you will charge me 2% extra, and use that 2% to increase the demand for the wine (further raising the price).
Marketing cost should be included in the quoted price. End of subject.

Not that Santa Barbara is Napa Valley, but if you were to get the most significant DTC producers together and do the SB equivalent of Auction Napa Valley, I bet you would get your funding (and then some).

It is beneficial to consumers to be charged more money for your wines??? [scratch.gif]

This. I buy direct from producers because I like those producers, not because I am looking to help market the region. Add the DTC assessment, and I walk away from every SB region producer.

Paying more taxes when we are already beyond highly taxed in CA is not a good idea.

It’s not really a tax because it would be assessed by for profit entities and the money would go to their vintners association. But, if it appears on the bill like an add-on tax, many will consider it a tax.


In other words, instead of getting together as a vintners association and having wineries voluntarily contribute a portion of profits to promote and improve sales for everyone, the consumer is charged to do the communal activity and “everyone” who sells wine has to collect it from consumers. For the common good. To benefit businesses. Sounds like a tax to me. Why is the answer to every problem in California another tax?

Napa, Sonoma and the Willamette Valley all provide funding for their associations with auctions. The SB Vintners have rejected using an auction. Auctions are voluntarily, collegial and team building. The proposed Wine BID is coercive and unfair because wholesale sales are excluded. The SB Vintners has about 110 members-there are 300+/- wineries in SB County.


This is simply not true. The Vintner’s have never ‘rejected’ the idea of using an auction whatsoever. That said, a futures event was held last year with the hope that that might bring in proceeds to assist a few organizations, including the Vintner’s Association. As with every other effort in our area, it was met with mixed and apathetic responses from the winery community in our region, not openly embraced as we all hoped it would be. But that is no surprise - and you are quite familiar with it. And I’ve said to you before, Stephen - if you want to spearhead the concept of this auction for the betterment of all, I am all ears and will get in the trenches with you to try to make it happen . . .

For those outside of our area and are unaware of this, we probably have the most ‘splintered’ wine region in the US. It is nearly impossible to get our industry on the same page - I’ve only seen it occur once in the past 15 years when there was a chance that our Winery Ordinance would be detrimentally changed.

This is not really the ‘forum’ to address this issue but I am glad that those outside of our area can get a glimpse of what a ‘challenge’ it is to try to get folks to do things in a cooperative manner in our area. I love SB County and making wine here - I just wish the ‘perception’ of our area with the general wine consumer matched the quality of the products we were putting out . . .


I think this is a bad idea. Marketing is an inherent cost of doing business, whether that marketing is in support of a single brand or a regional identity. If I were a consumer, I would be pissed off by this tacked on charge.

The trade association I am most familiar with is the Napa Valley Vintners Association. The organization is supported by member dues and by the trade-only Premiere Napa Valley Auction (which happened this past Friday). (The larger consumer-attended Auction Napa Valley that takes place in June supports local health and education non-profits, not the vintners association.) The NVVA dues are based on annual gross revenue (from all wine sales, not just DTC. Thus the cost to winery members is a normal business expense.

I think this is a fine forum to discuss a surcharge that consumers might be asked to pay. And one person’s apathy is another person’s choice. Well, until those who know better take that choice away.


As a consumer I dislike the “nickel and dime” aspect of multiple fees but as a community advocate that has worked on putting a BID in place I recognize how impactful to a community’s development (or redevelopment) an assessment such as a BID can be.

Has your group considered (assuming is is legal in CA) placing a size cutoff on the BID? i.e. the BID is only charged on producers that sell X amount of cases or produce X barrels? I have seen BID’s set up to where only the larger, full-service hotels charge the assessment since they are generally the largest beneficiary of convention and tourism marketing staff and sales efforts. The smaller properties (or even larger properties outside the defined assessment area) can voluntarily add the assessment but they aren’t required. The trade-off is only those hotels that participate are featured in the marketing. Just a thought for you.

What if every industry in every area of the country did the same thing? My hometown has the downtown corporation that all businesses pay into and then the downtown corporation markets the town and local businesses. The costs of this are picked up by the businesses. Now I’m sure that the businesses somehow pass along as much of this cost as possible to their customers, but it’s not stated on a receipt. In today’s world, where customer loyalty is a thing of the past and people are thrilled to shop online in order to save a buck (guilty as charged), you have to be very careful how you go about these things as there are unintended consequences.


One of the other things you’ve advocated is a Grape Commission similar to what they have in Somoma. Would the buyer of your grapes be in favor of this after the fact? Would they be willing to pay this fee in order to help ‘market’ SB County? Would your contract with them allow for this?


On the surface, 2% increase in cost for wine doesn’t sound like much to complain about. It is. Consumers as ironic as it sounds are very sensitive to minuscule cost increase, even on luxury items. Even a $1 increase per bottle on a say $200 bottle gets consumers to raise an eyebrow and complain. [swearing.gif]


Thanks for the input. As far as I know, it would not be legal to charge only certain producers - I could be wrong, but from what has been explained to me, this could not take place.

So just to reiterate, most would be ‘fine’ if this ‘fee’ would be ‘hidden’ in the cost rather than explicitedly stated? And just so you know, it will most likely only be assessed on sales at the tasting room - does that change opinions? This is not an ‘easy solution’ as it evidenced here, but I wish I could sit down with as many of you as possible and ‘explain’ our SB County wine situation - you would most likely be quite amazed . . .


Unfortunately Larry, the potential of the fee has now been “outed”, and so any increase will be viewed quite skeptically.

Had this been hidden, and just resulted in a dollar or two increase in bottle price (not a separate tag on fee - that was DOA) nobody would have noticed. Stephen gave up the game when he decided to ask the question.


As I said from the beginning, I would rather not hide it. The fact is that this fee would truly help to ‘preserve’ our industry and allow it to continue to survive in our area - which is a real challenge. Our industry is not given the same ‘heft’ politically as say Napa or Somona or most other major wine regions enjoy. If the Napa County wants to do anything politically, its affects on the vintners is seriously considered because of how important that group is. Same in most other wine regions.

Not here - not at all. We are an ‘afterthought’ even though we contribute over $1 Billion to the coffers of the country directly and indirectly. Things are short term housing bans, which have had a devastating affect on certain parts of our wine region - our ‘concerns’ were not taken into account. And the Cannabis Ordinance - which has allowed for the two largest outdoor grows in North America to potentially be located directly next to vineyards in the Sta Rita Hills - was put forth without input from our region.

The proceeds from this fee will enable our region to be better preserved and protected - we are not talking about this $$$ being used simply to market our wines. A grape commission would provide that if that’s all we wanted to do. We need to do much more.

So much more to say but I understand the trepidation so many have about this concept - there is just more to it than what Stephen put out there . . .


Interesting topic. As a geek and consumer who has visited the area multiple times and purchased at tasting rooms and purchased DTC via shipping here are my thoughts.

My purchase decision is and will be based on total costs to my door. So DTC via shipping: I will get an example invoice that lists the wine prices, all taxes, and ground shipping. Then I can calculate the fully-loaded price per bottle I will be paying. In some situations, a 6-bottle or case purchase means free shipping. That’s a plus but not a given. Any additional charges, such as the 2% assessment if applicable, will have the impact of reducing the probability that I’ll buy the wine.

If it’s from a reliable producer where I perceive very good QPR despite a 2% assessment, it’s likely I’ll get the wine. New producer? $30-$40 per bottle before adding on any other costs? Not likely.

Smaller/microwineries may have a tough time if the charge applies DTC and they have no tasting room and no distributor. That’s sad IMHO.

Just one opinion.