So Who’s In Control of Pennsylvania’s Alcohol Beverage Industry?

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Have you ever been curious as to why all the liquor stores in Pennsylvania are stated owned and20090730_plcb2logo_190x190 operated?  Have you ever wondered why Pennsylvania is routinely referred to as a “control state?”  You may be surprised to learn that Pennsylvania’s alcohol and beverage industry is run by the Pennsylvania Liquor Control Board (PLCB).

The PLCB is an administrative board consisting of three members each appointed by the Governor of Pennsylvania with advice and consent of two-thirds of the Senate.   The three PLCB members are Chairman Patrick J. Stapleton III, Thomas F. Goldsmith, and Robert S. Marcus.

The PLCB’s acts as both participant and regulator in Pennsylvania’s alcohol and beverage industry. In the beer industry, PLCB acts as regulator only.   As a “control” state, Pennsylvania restricts private retail ownership of distribution outlets in the state.   The PLCB acts as wholesaler, purchasing liquor from manufacturers.   The PLCB then sells liquor to its liquor licensees who in turn sell to the public for on-premise consumption.    As retailer, PLCB sells to the consumer via its state store system for off premise consumption.   These stores are known as “Wine and Spirit” stores. The PLCB is one of the largest purchasers of wine and spirits in the United States.  Sales at state operated Wine and Spirit stores reached a record 1.84 Billion in fiscal year 2008-2009.

Enforcement of Pennsylvania’s liquor laws is handled by the Pennsylvania State Police Bureau of Liquor Control Enforcement (BLCE).   Today the PLCB operates over 600 stores.  The PLCB issues and renews approximately 21,000 licenses annually.

Licensing by the PLCB is based on a quota system.  The PLCB limits the number of liquor licenses based on population.   The license application process is governed by the Liquor Code and Board Regulations.

So who’s in control of the Commonwealth’s liquor industry?   The Pennsylvania Liquor Control Board that’s who!!

Pennsylvania’s Brandywine Wine Trail: A Winery Lover’s Labor Day!

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Labor Day weekend’s road trip found us on Pennsylvania’s Brandywine Wine Trail.  There are several wineries on the Brandywine Wine Trail.  Headed down the trail in the rolling hills of Chester County we had a truly special time at the “Summer Under the Stars Jazz Festival” at Chaddsford Winery.  We arrived just in time to catch the lively sounds of The Budesa Brothers jazz band. You could readily sense the warm camarderie of the Chaddsford Winery patrons as they happily tapped their feet, mingled about and experienced the wonderful tastings with catered cheeses, salads and meats.   Despite the fact that proprietors Eric and Lee Miller were on vacation, the event was left in capable hands with Winery Manager Gregory Kuhn at the helm.  An amicable guy, Gregory moved about with hospitality and winery staff in tow, all of whom under his leadership were moving about tending to the needs of the winery patrons.

The very charming tasting room was spacious, elegant and impressively filled with Chaddsford Winery’s award winning wines.  We were warmly greeted by alum Nicole Matregano (a graduate ofIMG_0103 Temple University’s Hospitality School) and festival worker Mary Croak. Nicole and Mary guided us to our wine selection, the Chaddsford’s 2008 Proprietors Reserve.  A very nice blend of Vidal Blanc, Seyval Blanc and Vignoles, the Proprietors Reserve paired wonderfully with our three cheese plate of pepper jack, white cheddar and blue cheese. A straw colored zesty citrus wine with hints of lemon, the Proprietors Reserve nicely complimented our cheese plate and thinly sliced roast beef.

Founded in 1982, and housed in a 17th Century Colonial Barn, the Chaddsford Winery sits in the midst of a very beautiful country setting full of distinct charm.   It is the oldest and largest of the wineries on the Brandywine Wine Trail.  On the 30 acre estate vineyard, Winemaker Eric Miller has produced award winning wines.  We took note of the fact that the winery is winner of eight gold medals and three silver medals in the 2009 PWA Pennsylvania Wine Competition.   Chaddsford Winery holds multiple awards in international wine competitions as well.

Winery lovers may find it a real treat this harvest season to experience the good food, good wine and good company should you make a stop at Chaddsford Winery on the Brandywine Wine Trail.

How Exactly Did Grape Growers Save A Winery?

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The Trenton Times has a valuable and interesting article in yesterday’s paper  discussing how grape growers banded together to save New Jersey’s Unionville Vineyards.  As the article states, what looked like the beginning of the end for Unionville Vineyards,  turned out to have a happy ending as grape growers pulled together to save the winery.   For more information read Grape Growers Save Winery.

Who Said It Was Fun Uncorking Pennsylvania’s Wine Trails?

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Was that you who asked was it fun to uncork a Pennsylvania Wine Trail?  The answer is “You Betcha!”  Pennsylvania is home to 11 wine trails.  Wine Trails typically include several wineries and vineyards located in close geographic proximity to each other.   The Bucks County Wine Trail includes eight wineries.  For our family weekend road trip we decided to “uncork” the Bucks County Wine Trail.   In our travels, we discovered New Hope Winery!

New Hope Winery located at 6123 Lower York Road (Rt. 202) in New Hope, PA.    Upon our arrival, we  were met by the warm smiles of husband and wife  owners Sandra Price and Jerry Sauls. If you’re looking for good mood, good company, and good wine, this is the place to be.

New Hope Winery’s setting is a 17th century barn that is home to a gift shop filled with exquisiteIMG_0091 gifts that any worthy shopaholic would find hard to exit. Gourmet baskets and hard to find wine related items set the mood. A digital photo frame on the tasting bar reveals the upstairs loft area with sequential photos of a wonderfully decorated event room tucked away and reserved for private wine tastings with candlelight flickers in a rustic setting. The winery also digitally advertises its 175 person ballroom for those special celebratory and corporate events.

Complimentary tastings at New Hope Winery are hosted by tasting room staff person, Glenn Barnard. Let me tell you, looks can be very deceiving. While Glenn appears at first glance to be a young novice, don’t let the Justin Timberlake look alike fool you.  It was clear right away that Glenn possessed both credibility and wisdom as his knowledge of New Hope Wineries’ wines was nothing short of “on point.” I stated to Glenn that I preferred my red’s full bodied and dry. Right away, Glenn steered me to the Proprieter’s Red. It was a deep, dry, oak aged red with a smooth silky finish. Not a madly “in your face” wine, but just the exact presence to let you know the wine would never be tagged as “whimpy”. I was thinking to myself that the Properieter’s Red and a nice rib-eye steak would be a very nice pairing.

For the white selection, Glenn recommended New Hope Winery’s Pinot Gris, a light dry white wine produced from the vinifera grape Pinot Gris. We found it to be crisp, clean and refreshing. It was a perfect choice for a mildly hot and sunny day. Both wines were excellent selections.  When I looked over my shoulder, Glenn’s colleague Denny was well into a serious discussion with my family conversing on the pro’s and con’s of screwtops versus corks.

In addition to the wonderful selection of wines housed away in convenient bins, you’re free to roam about and experience wholesome camaraderie with Sandra and Jerry. Sandra and Jerry made the trip all so worthwhile. What a treat it was to meet this delightful couple. My heart was warmed watching them bring a smile to our faces and sharing their gift of great Pennsylvania Wines.

The next time your family and friends are looking to experience a fun-filled Saturday afternoon adventure, you may want to uncork Pennsylvania’s Bucks County Wine Trail. There you’ll find  New Hope Winery on the trail.  Have some fun indeed!

Pennsylvania’s Bucks County Wine Trail: You Heard It Through The Grapevine!

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IMG_0081Pennsylvania’s Commonwealth is host to over 100 hundred wineries, eight of which are on the Bucks County Wine Trail. This past weekend, my family members and I hit the road visiting Buckingham Valley Vineyards. It was a fun and delightful adventure for a laid back saturday afternoon.  Let me tell you…there are some things in life that should not be kept a secret.  This is one of them.

Buckingham Valley Vineyards.

Located at 1521 Route 413 in Buckingham, Pa, the winery counts itself among the largest of Pennsylvania’s 100 wineries.  What a warm reception we received upon arrival.  While pausing to take a photo in front of the winery entrance, owner Jerry Forest rode out on his tractor to see if we were damsels in distress in need of assistance.  I kindly introduced myself to Jerry and we exchanged pleasant niceties.

As we stood out in the vineyard, it was hard not to look in Jerry’s eyes and not see his passion and love for the vines.  While I was admiring the winery’s outdoor sculpture exhibit Jerry proceeded to tell me a little about his history.  Believe it or not, Jerry built the winery from a pipe dream in a dorm room back in the 50‘s.  I learned Jerry is a graduate of the University of Pennsylvania’s Wharton School of Business.  It doesn’t take long to see that Jerry indeed knows his business.   As we moved towards the tasting room, Jerry and I chatted about his forthcoming plans for this week’s harvest.  Jerry cautioned me that “things were going to get pretty noisy fast” around those parts as the loud machinery would soon be rolled in the upcoming week.

At the tasting room, we were warmly greeted by Buckingham Valley Vineyard’s tasting guides Mary Louise Zilli and Courtney Forsberg.  With warm smiles and welcoming hearts, Mary Louse and Courtney introduced us to the wide range of Buckingham’s varietals for consideration as a part of our tasting experience.   Upon inquiry about our possible selections, it was clear both these ladies were at the top their game.  They made us feel right at home while guiding us through our choices. The tasting room was a very comfortable space, both open and inviting.  It was filled with neat gift items including hats, t-shirts, and Buckingham Valley Vineyard memorabilia.  We found it very relaxing as we browsed through the items while enjoying our tasting experience on a lazy laid back Saturday afternoon.

We chose three wines to taste during the visit.  Our white wine selections included a  premium dry Pinot Gris, and a slightly sweet aromatic Riesling.  We also selected the oak aged dry Chambourcin, a full bodied red. You can taste Jerry’s 30 years of experience in the wines as we found them to be smooth, lively and very well balanced.  Others may have known that too, as the tasting room rapidly filled up with a bachelorette party of 15 women donning matching t-shirts (I will censor myself on what those shirts read) on behalf of a bride to be.   Kindly we extended our thanks, said our goodbye’s, and left Buckingham Valley Vineyards in the hands of the bride to be and other guests   As we look back on the day, we’re left with fond memories of Buckingham Valley Vineyards, a family centric business with Jerry and Kathy Forest at the helm, along with sons Joe, Kevin and Chris.

The next time your family and friends are looking to experience a fun-filled Saturday afternoon adventure,…take them to Buckingham Valley Vineyards on the Bucks County Pennsylvania Wine Trail. When your friends and family ask you where you discovered this wonderful winery, tell them…You heard it through the grapevine!

Pennsylvania Wine and The Law: Hey William Penn! Pennsylvania Inquiring Minds Still Want to Know

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Quaker-William-Penn.jpg 194X267 pixelsI’m still amazed at the number of times I’ve met new people and engaged in a conversation about Pennsylvania’s wine industry only to find them quite surprised to discover that Pennsylvania wineries are serious industry players that are here to stay.

I get a certain level of enjoyment steering their minds off of California and New York wine regions. Instead, I use the opportunity to speak about Pennsylvania’s rich wine history. It’s a history that dates as far back as 1683, when William Penn first planted vinifera vines. I also get a kick out of letting them know that it was a 1793 meeting of the American Philosophical Society that records America’s first commercial vineyard in Pennsylvania as proposed by Frenchman Peter Legaux to encourage the domestic production of grapes, wines and knowledge of viticulture.

Then… there’s the law! In 1968, the State legislature enacted the Pennsylvania Limited Winery Act . The Pennsylvania Limited Winery Act was the beginning of commercial winemaking in Pennsylvania. It allowed for the establishment of wineries, which currently have a production limit of 200,000 gallons annually. The law also permits the operation of retail sales locations and direct sales to businesses and individuals. Many states in the U.S. now model their state’s legislation on Pennsylvania’s Act.

But the best is yet to come! Surprise! Surprise! Surprise! They soon learn that Pennsylvania is now home to about 120 licensed wineries and 150 grape growers producing approximately 14,000 acres of grapes! Together these Pennsylvania wineries contribute over $600 million dollars in commercial activity to the State.

Pennsylvania’s wine industry is the fastest growing segment of the State’s agricultural community. New world growers recognize that Pennsylvania’s unique climate and attributes allow them some of the best growing conditions to compete on a world level with new varietals appealing to the American palate.

Today, the Pennsylvania wine industry has grown in production. The State ranks fourth nationally for grapes grown and eighth in the nation for its wine production.  This growth has positioned Pennsylvania at the forefront of the U.S. Wine Industry. Pennsylvania’s vintners maintain a well established reputation producing a vast array of award winning varietals gaining critical acclaim nationally and internationally.

So, the next time you have that conversation with friends about distinctive wine regions and those inquiring minds want to know…skip California and New York. Boastfully, tell them about Pennsylvania’s wine industry and don’t forget William Penn.

It’s In the Bag! Bringing Your Own Bottle In A Tough Economy!!

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totes_10-slideshowVerticle.jpg 286X430 pixels-1One of my favorite Bring Your Own Bottle (BYOB) restaurants is very nearby to my home. If you didn’t know whether liquor was served, one could soon figure that out by watching the brown bags and rattan wine cases under the arms of its many loyal patrons exiting the restaurant.

Today’s tough economy has caused foot traffic to increase in BYOB establishments. Restaurants with BYOB policies are now attracting avid foodies reluctant to pay $12.00 for a glass a wine when they can enjoy the entire bottle—BYOB. BYOB’s are great because you can bring your own wine without breaking the bank while at the same time sharing your favorite brand that was previously tucked away in your cellar.

In Pennsylvania the Liquor Code currently does not prohibit a person from bringing his or her own alcohol into any establishment. A restaurant is typically free to allow or disallow patrons from bringing their own alcohol on to its premises. The alcohol however, must be legally procured in the Commonwealth of Pennsylvania. If the restaurant chooses to prohibit the BYOB practice by a “house policy”, it must apply the policy uniformly without discrimination prohibited by law.

The Code however makes it unlawful for any person to possess any wine or liquor within Pennsylvania that has not been purchased through a Pennsylvania wine and spirits store, a licensed limited winery, or from an entity licensed to sell malt or brewed beverages for off-premises consumption. But foodies and wine lovers beware –what happens if you only partially consume the bottle you brought to dinner and now want to take it with you when you leave?

Well, in Pennsylvania if you leave the restaurant’s premises with an unfinished bottle of wine or liquor, you might be required to prove that you lawfully acquired the liquor or wine pursuant to Pennsylvania law. Thus, it is often suggested that folks bringing their own wine or liquor into a restaurant should have in their possession a receipt reflecting the purchase of their wine or liquor. Do keep in mind, that local ordinances may restrict BYOB establishments so you should consider checking in advance with the restaurant to see if any such ordinances or limitations exist.

Restaurateurs may still be held strictly liable of any violations of the Liquor Code that may occur on it premises regardless of whether they involve alcohol provided by the establishment or brought onto the premises by a customer. Potential civil liability can arise from permitting individuals to bring their own alcohol onto premises. As such you should contact an attorney on matters involving liquor law liability.

Bringing your own bottle is a great response to a tough economy. But remember, for both patrons and restaurant owners, potential liability resides “in the bag”.

Intergenerational Transitions and Succession Planning for Wineries

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estate-planning-attorney.jpg 425X282 pixelsWhat’s Love Got to Do with It?

I read an article recently about the family feud taking place at the Korbel Champagne Cellars Winery between father and daughter. Both parties are embroiled in a fight to the finish currently entangled in a defamation lawsuit wherein millions of family dollars are now at stake.

While dysfunctional families can be found in almost any business today, the wine industry is not immune from its fair share of family friction. Family feuds have caused damage to the reputation of some of America’s finest wineries. The battle for power between the Mondavi brothers of the Charles Krug Winery in 1965 or the 1986 trademark infringement suit between the Gallo brothers– Ernest, Julio, and Joseph represent just a few of the scathing yet bitter battles that can go on within a family.

Many of Pennsylvania’s winery and vineyard operations are multi-generational closely held family owned businesses. When the time comes to change hands and hand down a family owned business, family rivalries can ensue. With millions of dollars at stake, it’s easy for love and happiness to take a back seat to sibling rivalry and jealous behaviors. It is not at all unusual for family hostilities to seep into the family business, eroding the united front and focus that makes for a successful business. Building a successful presence in the community should be reflective of a family business that can also transfer leadership for the benefit of continuing the family legacy.

Succession Planning is about the future. When the time comes, carrying the family brand into the future can be the single most critical and difficult challenge a family business has to endure. It can also be an opportunity to reinforce and embody the founder’s mission and core principles long after the business has changed hands.

Looming questions about how to treat the family members equitably, planning for the surviving spouse, and determining who should be at the helm are just a few key decisions to be determined. Oftentimes, these decisions are made in a vacuum by the founder or virtually not at all. This can result in family conflicts and friction later as one heir seeks to retain the business while the other heir seeks to acquire his or her value and move on.

Winery owners who are able to embrace family members in an open dialogue regarding succession planning will stand to be more successful in the future. Thus, you should consider long term succession planning in order to:

  • Establish guidelines to define the transition.
  • Identify the next generation of leadership for the business.
  • Maintain wealth preservation and asset protection for family members.
  • Determine timetables for retirement, estate and tax planning purposes.
  • Educate the next generation on operational, financial and interpersonal issues.
  • Minimize tax liabilities passed down to heirs

The future of your business deserves well executed succession planning. If the founder’s dreams are not the same dreams shared by their heirs, the likelihood is greater that the transitioning winery will end up in the hands of a third party. Prepare for the future. Leave a legacy for the company founder because at the end of the day, love’s got everything to do with it!!

Wine Labels and The Law

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Wine-labels-small.jpg 370X260 pixelsWas that you I saw doing a wine label drive-by?

I’m often amazed at the events I’ve attended wherein wine was served, the guests complimented the wine, but rarely took the next step to view the label of the wine they were enjoying. In other words, they were socially doing what I call a “wine label drive-by”.

Wine labels typically catch my attention. I have even been known to use a “wine label saver” now and then, to collect wine labels for wines I might desire to re-visit again. I capture the label and my impressions in a wine label tasting journal with notes on whether the wine was a gift, who shared it, what foods were paired and whether the wine was worthy to be served, gifted or purchase down the road.

Wine labels can be both interesting and insightful. U.S.and State regulatory requirements require the label notify the buyer what he or she is purchasing. This is helpful in that the wine label reveals to the buyer, the wine’s country or region of origin, producer, shipper, what grapes were used and the year of harvest. The wine label may also include other non-mandatory, yet fun elements putting the buyer on notice that a hint of peach or pear may be part of the tasting experience. The wine label might alert the user that an aromatic experience of oakiness or soil might reveal itself in the flavors. Perhaps the wine may surprisingly suggest what foods are best paired with the wine.

Alternatively, other wine labels may focus on the brand. If done well, a good brand can make for an incredibly great conversation piece at dinner. Some wine labels may display an artistic creation of a home grown graphic designer or artist on display. Others may simply convey a catchy phrase for which the purchaser cannot resist the opportunity to buy. Certainly, I’ve known a few folks that have been the life of the party, showing up to that very stiff affair at the boss’s party with a bottle of “Fat Bastard” in hand. Today’s millennials might be pleased to know that they can hit that twitter speed tasting party wearing their favorite Ed Hardy graphic tattoo apparel while tweeting on Christian Audigier’s 2008 Ed Hardy Rose!

On occasion, I’ve gone looking to gift a particular wine only to my surprise find the wine label had changed. The wine label was given a fresh new look and appearance leaving me to contemplate whether I could expect major changes in the wine as well. In any case, the wine label is purposeful.

The label is regulated by law so you as the consumer will know what you’re buying. The winemaker on the other hand has gone through great lengths to catch your attention to buy, perhaps even trademarking the label so as to carve out the winemaker’s brand as his own and give it full comprehensive protection registering it with the U.S. Patent and Trademark Office.

So, the next time you’re at that special social event, or dining experience commenting on how much you’re enjoying the wine—take a moment to stop, forego your “wine label drive-by” and instead, introduce yourself to the winemaker….and remember the winemaker’s work is done with you in mind.

Do Your Grapes Have A Home?

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GrapesWithLeaves.gif 239X206 pixelsConstructing a Grape Contract That Works For Both Grower and Winery.

Not all grapes will have a home by harvest time. But many will–having found a home by way of a Grape Purchase Agreement. Unlike, the old fashion handshake, or oral agreement, the Grape Purchase Agreement now commonplace, memorializes in writing the understanding between the Grape Grower and the Winemaker. Unlike the oral agreement, you don’t have to chase down the truth later should the deal turn sour.

A carefully drafted agreement can be beneficial to both parties. The parties can avoid the potential for unforeseen disputes resulting in litigation actions later. When disputes arise, both parties can refer back to the agreement and determine their original intent as it is spelled out in the verbiage of the agreement. In some circumstances, the Grape Purchase Agreement is used as the “Pre-Plant Agreement” for the Grower. A Grape contract agreement that is used as a pre-plant agreement typically includes four years for a pre-plant agreement and four years thereafter for the grape contract agreement. For the Grower, the Grape Purchase Agreement can be beneficial in helping the grower secure financing for a new vineyard development. The Grower can negotiate pricing that reflects the state of the market and his efforts and expertise.

For the Winemaker, specific production practices can be contractually specified and verified at harvest time. The winery’s ability to secure a supply of grapes that meets the quality standards of the winery can often be imperative. Thus the Winemaker may wish to give voice to viticulture techniques to be used by the grower concerning pest, mold, pruning, or disease control. Too reasonable long term pricing relationships can be established. If the harvest is not of the quality the winemaker seeks, he may have the option but not the obligation to purchase the grapes. In essence, each party’s goals and priorities can be firmly understood and contemplated at the time of agreement and thought given to what is controllable and what is not.

Here are a few key provisions to be considered when contemplating a Grape Purchase Agreement:

  • Description and Price (often identified by varietals and priced by ton or acre)
  • Payment Terms and Schedule
  • Condition of Grapes
  • Use of Vineyard Name
  • Vine Identification
  • Grape Quantity and Quality
  • Method of Harvest (machine vs. hand harvest)
  • Title (warranty acknowledgment for who owns the grapes)
  • Transport and Delivery
  • Force Majeure ( occurrences due to acts of God, fire, flood or war)
  • Termination

The Grape Purchase Agreement should consider the allocation of risks between the Grower and the Winery. Whether or not disputes will be mediated, arbitrated, or litigated should be spelled out specifically in the agreement. If the Grower-Winemaker relationship turn sour, the responsibility for legal costs have been readily pre-determined.

Numerous decisions must be made when considering entering into a Grape Purchase Agreement. Grape Purchase Agreements when drafted properly work to serve both parties. Both parties should always consult a lawyer when contemplating the preparation and execution of a Grape Purchase Agreement.