Fate of Jersey Wineries Still Up in the Air

New Jersey wineries remain in limbo, with still no activity from the New Jersey legislature regarding wineries’ ability to ship directly to consumers, after the Third Circuit and district court ruled that the existing wine distribution laws are unconstitutional and short change out-of-state wineries.

And the stalemate may not have them seeing a decision until as late as November 2011, say vineyard owners in the area.

Every winery in the state of New Jersey, despite the expired status of their retail sales licenses, is still permitted to sell wine directly to their customers for now, pending the court’s decision on the issue.

This does not, however, extend to the several up-and-coming Jersey vineyards that are currently waiting for winery permits from the state, which are being withheld pending the settlement of this case.

According to Scott Donnini, a former lawyer and a co-owner of Auburn Road Vineyard and Winery in Pilesgrove, a large part of the reason that this issue remains unresolved is due to the fact that wineries are a small industry, and do not have the political power that larger businesses might have in this situation.

Wineries, at least in New Jersey, go against the grain of corporate America, in a league all of their own, he said.

“We’re taking over green space that was destined for development, and sort of reversing the trend,” said Donnini. Coupled with the fact that vineyard owners like Donnini have not been allowed an active role in these court proceedings, things are not boding well for the wine industry in the Garden State.

“The legislature has been looking at this as a direct shipping problem,” said Donnini, “and they’ve been unable to grasp the subtleties of our problem.”

Part of this problem, he said, is that small wineries like Auburn Road would almost certainly go out of business should they be forced to abide by the conventional three-tier system: producer, to wholesaler, to retailer.

Making matters worse is the fact that the owners of these wineries have been effectively shut out of any settlement discussions, and more and more of them are starting to realize the largely political nature of this debate.

“If the outcome of this situation would sway the election, people would be taking sides quickly,” said Donnini, “but unfortunately, this is not a voter issue.”

Though a negative outcome would almost certainly mean the end for the many small wineries in the state, Jersey’s larger wineries are not exempt from the fallout.

Rich Heritage, who does marketing and sales for Heritage Vineyards in Richwood, says that despite the winery’s status as one of Jersey’s larger wineries, “It would seriously injure the business if our tasting rooms were to be shut down. I’d say there would be a 50/50 chance of staying in business.”

Heritage, son of the winery’s proprietors Bill and Penni Heritage, says that the vineyard’s “Plan B,” should things take a turn for the worse, is to offload all of their wine to a distributor, and hope that they are able to move the wine quickly.

“We would have to sell at least 50 percent of the cases we produce each year in order to stay afloat,” said Heritage. “My guess is that 95 percent of the state’s wineries would be out of business within a month.”

Until a decision is rendered, currently functioning New Jersey wineries will continue to sell their wine directly to customers, and their tasting rooms will remain open.