Sunday, September 30, 2007

Our continued call for a change to the CA Laws applied to wine producers

Subject: Our continued call for a change to the CA Laws applied to wine producers
Date: 9/28/2007 10:34:42 A.M. Pacific Daylight Time
From: Thewinecntryclb2
Reply To:

(CC: sent to the Wine Institute under separate cover)

Many CABC Type 17/20 AND Type 2 operate illegally

My name is John Olney. I have sent you two previous e-mails on this subject (8/29 and 9/16). I have been contacting both wine producers and consumers (over 550 have read my on-line articles on this specific subject between 10 am, 9/24 and 5 pm, 9/26) and much to my surprise I am finding out that apparently quite a few CABC Type 17/20 license holders are completely ignoring the rules & regulations under which they are suppose to be operating. It is no wonder they do not surface in response to our call for change or will not let us use their names.

I received replies from consumers that they are indeed buying directly face-to-face from the Type 17/20 producer who talks about his/her wine while the representative of the Type 2 license holder who actually processed the grapes into wine completes the pouring at the site of the Type 2 holder. At the Assemblywoman Evans sponsored meeting in Napa in 2006, the CABC representative said that such a face-to-face discussion is not permitted and could result in suspension or even revocation of the Type 17/20 license. I guess this type of collusion could also represent the same problem for the Type 2 license holder.

I have found Type 17/20 Web sites making invitation to their readers of willingness to find a meeting place to taste and talk about the wine and even inviting them to dinners at their homes. There probably are not enough agents to monitor all the Internet Web sites of these Type 17/20’s to catch those breaking the rules.

Many of those making comment seem to be saying that it is a matter of calculated risk that CABC agents are too busy elsewhere to worry about this infraction and thus they aren't going to get caught. Why have unenforceable laws on the books? The last attempt at legislating the production, distribution and consumption of alcoholic beverages by the consumers -Prohibition - failed miserably.

We do not condone operating outside the CABC Rule & Regulations and the spirit of the Calif. Legislatives laws. We do not want to start up, do like other Type 17/20 licenses, with the cooperation of a Type 2 license, only to get caught and have our license suspended or worse, and revoked. Thus we must pursue every channel available to us to get the existing laws changed.


I heard from Type 2 license holders complaining once again that the problem with the Type 17/20 holders is that he/she doesn't have to buy land, equipment, pay taxes, etc as do the Type 2 so therefore the Type 17/20 shouldn't be allowed the right to the marketplace the same as the Type 2. This is simply economics!

If this is the reason to deny Type 17/20 marketing and sales opportunities on a level playing field, then it can be said that the CABC licensing structure must be changed to reflect the difference between the amounts of money that each production size increment represents from the giant 20 million cases per year CABC Type 2 producer manufactures and markets as compared to a 200 cases per year Type 17/20 wine producer who buys grapes and has them crushed and processed by a bonded custom crush house, and the levels in between. All have paid money for the use of bonded wine production facilities to create, in an environment protecting the safety, health and welfare of the people, a product that the consumer wants.

With the above in mind, we then looked at the licensing restrictions on the alcoholic beverage manufacturing of beer and distilled spirits. We did not find any evidence of restrictions being placed on how these beverage producers are allowed to market and sell their products based on the type of ownership of the beverage production facilities. SO WHY ONLY WINE?


The Governor recently signed changes to the wine laws which now allows both the Type 17/20 and Type 2 license holders to donate and pour wine at charity events. To me this is precedent setting.

1. How can one segment of the wine consumer be disallowed the opportunity to taste a legally produced wine just because that consumer did not or could not attend the charity function? That’s discrimination among wine consumers!

2. If it’s ok for the Type 17/20 to pour at charity why it isn't also true it should be allowed to pour at non-charity events. How can you call the two licenses alike for charity but not alike for non-charity? That's discrimination among wine producers!

Our objective is that we want to produce wine, but can't afford land and equipment yet, so Type 17/20 offers us a chance to be a start-up and grow into an Alternate Proprietorship-Type 2 and finally into a full fledged Type 2 license. Just like the CABC says on its Web site, and I quote, CABC “…is pleased to do our part to promote small business growth, expansion and productivity within the State. ….. We hope the following information will be helpful in developing a productive and profitable relationship with the ABC.” We hope this is true but it does not appear to be so.

The existing CABC licensing rules & regulations are unfair business and probably restraint of trade practices against differing wine consumer segments as well as the Type 17/20 wine producers.

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