Critics get last chance to stop wine giant from opening SC tasting rooms
A battle over where South Carolinians can sample and buy wine became the focus of a debate Thursday over a proposed major economic development project in the state.
South Carolina wineries joined an effort to curb a wine giant’s expansion in South Carolina, saying their plan to add standalone tasting rooms in the state would “destroy” their business. The wine company and its supporters argue that is not true.
Opponents of a request by E & J Gallo Winery, a California-based bottling and distribution company, to open three tasting rooms, in addition to a $400 million investment to build a massive East Coast hub in Chester County, got their last public say on Thursday in front of a state House panel.
But those efforts to eliminate the tasting rooms altogether, already unsuccessful in the Senate this month, also failed after the four-member panel unanimously advanced legislation that would change South Carolina’s alcohol laws, sending the proposal to the full House Judiciary Committee. That committee is expected to meet early next week.
“I’m not here to argue against a distribution center, but I do think it’s blatant discrimination in South Carolina that you allow a California winery to come in here and have as many tasting rooms as they want,” said Richard LaBarre, who, with his wife, Laura, own and operate Enoree River Vineyards & Winery in Newberry.
The legislation, LaBarre said, will “destroy wineries in this state.”
“What we want to know, and ensure is that we’re not creating laws, like we just did here with with specific sections are tailored to $400 million and 300 employees, ... that we start to stifle out the small business owner and the opportunity for us to live an American dream in the state of South Carolina,” said Larry Cozine, who also with his wife, Mandy, opened South Bend Winery in Greenwood in October. Cozine added that South Carolina “may be one of the handful of states left in this country where people would like to believe you can still live free, forge your own path, build your own destiny, like Gallo did all those years ago, right? Well, I’m Gallo now, all those years ago.”
Last month, after some secrecy, Gallo Winery unveiled to lawmakers plans to build an initial $400 million bottling and distribution manufacturing plant on 640 acres in Fort Lawn, Chester County. In the company’s first phase, Gallo representative Rob Donoho told lawmakers it plans to add 500 jobs over the next few years but expects that to grow to more than 1,000 jobs over 30 years.
A study by the University of South Carolina estimated the investment could grow in excess of $1 billion, a representative said.
Drawing Gallo to South Carolina is the direct access to the Port of Charleston and the rail line, also the state’s Ready SC workforce training program through the state Department of Commerce, Donoho said.
“We definitely knew that the southeast part of the United States was a sweet spot for us, I’d say between Georgia and North Carolina,” said Donoho, who testified virtually Thursday from an airport.
Dwight Drake, a lobbyist representing Gallo, told the House panel on Thursday that Gallo is adding almost the same number of jobs that German automaker BMW initially added when it opened its Spartanburg County plant more than 20 years ago.
Gallo, Drake said, would “have the same kind of impact in the Fort Lawn community,” and, like BMW, would uproot a community that has “suffered from the demise of the textile industry.”
But the manufacturing plant itself is not the problem for critics, they said.
It is what the legislation allows a company to do if it invests a certain amount and adds a set number of jobs: add three satellite tasting rooms, an addition Gallo intends to open in areas of the state with high foot traffic. Those off-site tasting rooms are not currently allowed under state law and would hurt small business and give Gallo an unfair advantage in the market, critics say.
Gallo could only sell a customer six bottles of their wine — not beer or liquor — and the tasting rooms would have to close at 5:30 p.m. so that they do not compete with restaurants. Aiming to try and assuage wholesalers and retailers, senators also added a provision in the bill that would require Gallo to buy its own bottles for the tasting rooms through licensed wholesalers and sell it at a retail price. The state’s revenue department also would have oversight powers to make sure Gallo’s investment happens.
But George McLaughlin, who owns three retail locations and estimated that about 40% of his business is Gallo wines, said that if Gallo can sell wine directly to buyers, the winemaker may cut out wholesalers.
“If a husband and wife can buy 12 bottles, they don’t need to go to their local store,” McLaughlin said. “When they take out 40% of my market share, I’m going to lost 40% of my staff.”
Hoping to grease the rails for the legislation, appeasing micro-distilleries, the Senate also added a separate measure increasing the amount those distilleries could serve for tasting and allow them to have a restaurant on site.
The addition will help “distilleries achieve equal footing with South Carolina breweries and provide an economic lifeline to many of our distilleries still struggling from losses incurred during the pandemic,” said Ann Marshall, owner of High Wire Distilling Company in Charleston, representing more than 30 permitted micro-distilleries with the South Carolina Micro-Distillery Guild.
The bill, she said, is “critical to the survival and future success of South Carolina distilleries.”
The Associated Press contributed to this report.
This story was originally published April 22, 2021 at 12:26 PM.
