Howard,
Our goal is NOT to be dishonest but to display these charges and explain to consumers in our tasting room why they are being charged. I agree that is it disingenuous not to do so and we are in complete agreement. Therefore, one would know what they are paying when they walk out the door and will not be surprised by the surcharge - period.
Cheers.
Larry - when you see how ticked off people get about shipping charges, why would you ever think that people would accept a surcharge so that you can advertise?
Oops, sorry, the $40 wine is actually a little bit more…
Will the surcharge also get CA state tax?
David,
I know how Steven framed this in his very first post, but this goes well beyond advertising our region. This has to do as much about preserving I reaching for wine grapes as anything else. I know folks are quick to say that that’s all the money is going to be used for, but if you follow the link that AL posted above you’ll see that is going to be used for a lot of things.
And in all honesty, I’m not sure that the group on this board is the main target audience. This will most likely only affect those folks coming into the taste room in purchasing at the time of that visit. That’s totally different then affecting folks like you across the country. It’s no different then being assessed a fee at a hotel you stay at. You are not assessed that be unless you stay at that hotel.
And I understand why a lot of folks may not be in favor of something like this. I truly do. And I’m trying to keep an open mind as possible. But if I had a few minutes to sit down with you and explain the situation in Santa Barbara County better, you might understand where I’m coming from.
Cheers
Well, you can’t in some places like Portland that charges a surtax to cover health insurance for their employees.
Why only DTC and not all sales or restaurant/distribution? In any case, I feel that if the region wants to collect 2% to further the businesses, it should be a cost borne by the business and not passed on to the consumer. So the $50 bottle remains $50 but $1 of the sale goes to fund this BID or marketing entity. In theory, the if the expenditure is worth it, the businesses should benefit through increased sales / representation more than the $1 lost. If it is not worth it then there should be no fee at all. I also say this is all in theory because there is no practical way to ensure the cost is not passed on to the consumer, except to say that i will be less inclined to buy bottles that if their price goes up, whatever the reason may be.
I would also add that additional marketing about the region generally (vs specific to producer or at least a vineyard) is unlikely to sway my purchasing decisions. That is true as much for burgundy as it is for santa barbara.
Apparently the SB Vintners association has not convinced enough local vintners that its mission is worthy of financial support. So the association wants to create a BID to compel consumers to fund its work by having wineries collect a mandatory “fee” on DTC sales of SB wine in CA.
How much would administration of the BID itself cost per year? (Is that the 20% “operations” figure in the pie chart [in Al’s link]?)
There really is no cost to ‘administer’ the BID at all - the admin costs are for the Association as a whole.
And your other assumptions are, unfortunately, dead on . . .
Cheers.
There have to be costs associated with oversight – verifying/auditing compliance, etc.
Hi Larry. At the recent Lompoc Wineries meeting re the Wine BID, which you did not attend, the SB Vintners put on a full court press with five officers and board members- all outside of Lompoc. The one SB County Vintners board member from Lompoc had resigned over the Wine BID. During this meeting the President of the Vintners’ Board said there was “no silver bullet” to solve the Vintners’ financial problems. When I noted that wine auctions were used in Napa, Sonoma and the Willamette Valley to fund their associations, the Vintners’ board president said no a wine auction would not work because last year the Vintners tried a futures auction and could only raise $30K. The Lompoc wineries are opposed to the Wine BID by 70-80%. During this meeting, Brian Loring raised the option of using a grape commission which Sonoma uses. The Vintners’ board president said the Vintners had looked at this but it was: “too complicated and would take too long.”
The 2% assessment will be paid on all wine club sales to CA folks, not just at the tasting room.
From the Vintners’ web site, here is how the Vintners propose to spend the $1.6M from the 2% assessment:
Marketing $572K -35%
Operations $327K -20%
Advocacy $245K - 15%
Contingency $163K -10%
Festivals $81K -5%
AVA support $81K-5%
Winery community Engagement $81K-5%
Member Education $81K-5%
Steve.
It benefits the wineries. It’s allocated well to reflect the type of sale it supports and is proportional. But, why should the consumers give a shit? They clearly don’t want to see it, and don’t want to see it added on to the stated price. Any mandated fee or tax added to a stated price is obnoxious. Then there’s the irrational emotional trigger so prevalent in our society that makes paying $50 for a wine perfectly acceptable, while paying $50 for the same wine is a moral outrage. So, put the damned business expense in the stated price and make the wineries a “safe space” for such people. Consider it an expense related to the sales of that portion of wines they relate to. Simple.
So is this fee only for members of SBVA or for all wines with a SBCounty AVA designation? If the latter, then I’ll also cancel my Ojai club membership.
Hi Peter. Please DO NOT cancel your wine club. This is only a proposal by the SB Vintners. It would apply to direct to consumer wine sales in California at the tasting room, by wine club or from a wineries website. This proposal to be effective has to be approved by the County Board of Supervisors and then each city council- there are eight in Santa Barbara - for wineries or tasting rooms in a city. It is a long way from being enacted. If you want to do something let the Santa Barbara wineries know of your view. The wineries in favor of the 2% take the position that the consumer will not notice or care about the 2% assessment.
Hi again Peter. This proposal only applies to Santa Barbara wineries not wineries outside of Santa Barbara County who sell wine made from Santa Barbara grapes. I am sorry I was not clearer.
A claim has been made that people pay BID assessments on hotel rooms and it doesn’t bother them. That’s not my experience, most people are quite annoyed by add-on fees on hotel rooms, they have just become used to being hit with several add-on fees because they have been a popular source of revenue. Also, it’s generally easier to buy wines from another location than to stay in a hotel in another location.
-Al
I am sure this was researched, but wondering why the Santa Barbara Wine Association isn’t raising their winery membership dues (which are based on production) instead of a BID assessment on consumer purchases?
Further proof that consumers will drop you just out of principle for a $1 bottle cost increase on a normally $50 bottle. No wonder wineries are so neurotic about any passed on cost increase to their customers.
Hi Stephen,
Thanks! I’ll talk to the wineclub managers. I’m sure that the wineries I buy from don’t want this fee as well as they generally sell out.
Best, Peter
Hi. I first got involved with this when I read Lisa Andre’s article in the Santa Ynez Valley paper. I was instantly outraged. The precedent is terrible. Can you imagine shopping at Albertsons and reviewing your receipt and there’s a 2% surcharge so they can advertise? And a surcharge on your steak so the Cattlemans Association can pay lawyers to fight the pesky environmentalists? And a surcharge on your aluminum foil so Alcoa can pay remediation costs? I was in 10 SBC wine clubs now down to 7. Two I quit because they support the BID and one of the owners has a yacht. And you want me to pay? Tom Foley has his own NHL team. He can afford it. I’ll quit Firestone too if this passes.
One final thought. My clubs always tell me I’m “part of the family.” Any family that wants me to pay for the privilege gets a divorce. At a minimum wine club members should be exempt. Otherwise I can just order more wine from Tobin James and Hahn they are free shipping 12 or more bottles and no onerous tax. And to the person who wondered - yes the way it is constructed you will pay CA sales tax on this “tax” so effectively it is 2.155%.