The wine industry is going through a tough phase. Sales are down, vines are being pulled up, ultra committed health wackos are making absurd claims, and there is competition from the new en vogue cannabis industry.

Now we can throw another log onto the fire, governments that purposefully want to destroy some of the industries smallest players. Yes, none other than the Commonwealth of Virginia decided it wants to try its hardest to make life difficult for small wineries.

Under a law passed in 2023 a winery license holder must ensure that twenty-percent of its wine sold for on-premise consumption is manufactured on the license premises.

In other words, Virginia made it a law that, in an industry where wineries are struggling to make ends meet, an additional burden on small struggling businesses was justified.

The twenty-percent number may not seem high, but its what is behind the number that tells the real story. Many small wineries live and die by their tasting rooms, and with tough times in the wine industry some of the smallest players may not survive. Survival is especially in peril, if the winery cannot operate its tasting room.

The beautiful thing about the wine industry is the flexibility in manufacturing, which keeps cost low, lowers barriers to entry, and allows people to expand a business through their hard work in their tasting rooms.

But the new Virginia law eliminates the advantages the traditional wine industry offered interested parties.

Because of the 20% requirement, some small wineries with tasting rooms will need to invest their capital in new land and start growing their own to meet the minimums.

The cost of purchasing extra land and the unnecessary maintenance of upholding the newly purchased land will become cost prohibitive for many and drive them out of the industry.

Further, we are not talking about growing corn here. Planting vines is difficult and requires an investment of time and money with the fruit of the vines taking many years to become commercially viable. Knowing all this or maybe they didn’t know this which makes this even more of a problem, Virginia decided to mandate more sunken cost for the wine industry.

The new mandates will act as a barrier to entry and ensure less competition in the future for Virginia wineries.

Somehow even with a struggling wine industry, the Virginia legislature and Governor Glenn Youngkin decided the best way to foster growth in the wine industry was to take government action to help destroy it.

If there is a state more unfriendly to the industry, I would be hard pressed to find it.

Virginia has come for the wine industry and although Virginia maybe for lovers, it is certainly not for the wine industry.