|Oklahoma vs. Texas - an economic battle
Oklahoma vs. Texas - an economic battle
OKLAHOMA versus TEXAS
NO…THIS IS NOT ABOUT FOOTBALL. IT IS ABOUT ECONOMIC SURVIVAL
At the turn of the century, Oklahoma had a fairly well established grape and wine industry. Edward Fairchild had established a farm north of what was then Oklahoma City. He had planted many acres of grapes along with other fruits that were used in wine production. However, one of the conditions of Statehood in 1907 was that the state had to adopt Prohibition. This marked the end of the Oklahoma wine industry.
The United States Prohibition was repealed in 1933 with states being able to continue. So in Oklahoma, it continued to be the law until 1959. The repeal of prohibition in Oklahoma allowed liquor stores by county option. It was at this time that the 3 tier system was established in Oklahoma. Manufacturers sold to Wholesale Liquor Distributors who then sold to the package liquor stores. Each tier making a profit tended to make Oklahoma liquors and wines more expensive than surrounding states. And the legal restraint of trade imposed by the system made millionaires.
During the 1970s, Oklahoma Governor David Hall started a viticulture program in southeast Oklahoma to provide employment and new opportunities in agriculture for low income individuals. The program was ultimately unsuccessful. In 1982, Cimarron Cellars was established in Caney, Oklahoma. Cimarron Cellars remains open today.
In 1980, the voters in the state were allowed to vote on a state question that allowed liquor by the drink. This also continued the county option but restaurants and bars were allowed to legally serve liquor by the drink rather than “liquor by the wink”.
Max Knotts, Robert Bartunek, Richard Sias, and George Girouard helped to establish a statewide association of grape growers in 1994. The association brought more interest to the subject of viticulture and worked to modify the laws.
In 2000 the voters of Oklahoma approved State Question 688 which allowed Oklahoma Wineries to distribute their own wines to Restaurants and Liquor stores without having to go through a Wholesale Liquor Distributor. This law removed the middle man and allowed the wineries to sell at a profit. In 2000, there were 3 commercial wineries in the state. This change in the law encouraged the growth of the grape and wine industry, so that by 2006 there were nearly 50 licensed commercial wineries operating in Oklahoma.
2006 brought a lawsuit by some Wholesale Liquor Distributors that challenged the law and resulted in it being declared unconstitutional. Oklahoma wineries lost their ability to distribute their own wines for 2 years. This has resulted in the closing of several wineries and extreme cutbacks for many more.
In 2008 the voters of Oklahoma once again approved a State Question that allowed Oklahoma Wineries to distribute their own wines. However, this time so many costly restrictions were added that for most of the small wineries, it was not profitable for them. They had to buy the self distribution permit. Without the ability to ship wine to remote areas, the small wineries are required to personally deliver wine to any location in the state, consuming a lot of gasoline. But more importantly for the small winery staff, it consumes the precious commodity of time to travel to remote locations. The law prevents a winery from going together with other wineries to share the time and expense of delivery.
One of the phrases that politicians like to talk about is “Rural Economic Development”. The “Family Farm” also ranks high on the warm and fuzzy scale. There are grape growers and wineries scattered throughout Oklahoma. And there are many more families that would consider this diversification strategy. However, the expansion of the Oklahoma Grape and Wine Industry is being held back by laws and regulations. I encourage you to read the letter below. It was the spark that has ignited the Texas Grape and Wine Industry. In Texas, the Secretaries of the Departments of Commerce and Agriculture have made it their mission to improve the laws that govern the industry so that it will flourish. Not take 2 steps forward and 1 ½ back. Send a link to this page to your State Senators and Representatives. Include the Secretaries of Agriculture and Commerce along with the Governor. Ask them to take a special interest in Oklahoma farms and wineries so that we can help Oklahoma continue to be a destination for tourists and their dollars.
Texas now has in excess of 170 wineries. The grape and wine industry employs around 9,000 people in mostly rural communities. And they estimate that the economic impact in 2009 was over One Billion Dollars and that was a bad year economically. That is what good legislation can bring to Oklahoma, if you will help.
Oklahoma now has a new state wide organization to help the grape industry. OKLAHOMA GRAPE INDUSTRY COUNCIL already has more wineries and professional vineyards than any other group claiming to represent the grape industry. Please consider joining as member or as a friend to the industry. Contact Gene Clifton at Canadian River Winery 405-872-5565.
GRAPE PRODUCTION, TOURISM AND VALUE ADDED PROCESSING
As Chairman of the Texas House Agriculture and Livestock Committee, my charge is to promote, protect and preserve agriculture in Texas. That means we need to look around the country and see if there are things we should be doing in Texas that would promote agriculture. During my travels around the state on the Ag Policy Special Committee that I also Chair, it was brought to my attention that our grape and wine industry had some serious problems.
Whether we choose to drink wine or not is not the issue. The issue is that many Texans are drinking wine and it is being produced in other states' agricultural areas. Wine is an agricultural crop that has been processed. Grapes are water efficient, high profit crops that can have a huge impact on the economic survival of rural communities. We have made an economic evaluation and comparison between the number 1 (California) and the number 2 (Texas) agriculture states related to the wine industry. I want to give you the facts that we discovered.
The economic impact of wine in California was over $33 billion last year(again, this letter was written in 1999). Wine is the number one finished agricultural crop. Grapes, before processing, rank 3rd in terms of agriculture value. 847 wineries produce 2.6 billion bottles from grapes grown by 4,400 farmers. Grape acreage has grown to 2,527,056 acres in 1998. In California, taxes, licenses and fees to state, counties and local communities exceeded one billion dollars in 1999. There is no increase in social problems attributed to grape growing and wine production in California. The wine industry has created over 145,000 jobs, paid $4.3 billion in wages, and provided 10.7 million visitors to the rural areas where grapes are produced and wine is processed.
Well, how do we compare in Texas? California had retail sales of $2.66 billion in 1998 while Texas had $921 million. California produced 524,971,095 gallons of wine in 1998 while Texas produced only 1,298,723 gallons. In fact, Vermont produced almost twice as much wine as Texas. The bottom line is that California produces 404 times the wine we do but only consumes 2.9 times the wine. Texas consumes a lot of wine but most the benefits of production of grapes and processing of wine is in California.
At present, we have 39 small wineries in Texas scattered across all regions of the State. We are pretty far north for most grape varieties but there is grape production going on today in Morse, Texas near the edge of Moore County.
Why does California have such a prolific grape industry, and Texas such a small one? Mainly, California has passed laws to encourage the wine industry while Texas has the most regulations of almost any state in the country. In simple terms, we are not providing a market for the grape farmers product. In fact we have a distribution system for wine in Texas that almost guarantees failure for the winery in Texas.
We have two distributors in Texas that have exclusive rights to distribute wine and spirits. If they do not choose to distribute the wine you produce, you are almost left without a market for your product. Consolidation of wholesale distribution of wine has left a monopoly in place that makes small wineries compete with huge wineries for shelve space and the little guy most always loses.
We must do something to promote the grape industry in Texas if we want to take advantage of this huge rural development opportunity. Can you picture vineyards scattered around some small communities and a small winery with tourist lining the streets throwing money at the local shops and cafes and spending the nights in bed and breakfast places and local motels. Then shopping in our antique stores and taking nature tours run by local residents? Well you could if you had been with our Texas Ag Policy Committee as we toured the Napa Valley in California this past August. We are missing out on wonderful, environmentally sound, high dollar businesses by having 1891 laws on the books in Texas.
I will be offering the Farm Winery Act of 2000 that will allow grape farmers to come together to create small wineries that can offer tastings to promote tourism and create rural economic development. We need to become aggressive about using our environment to preserve, promote and protect our rural way of life.
You can help Oklahoma by sending a link to this page to your State Senator and Representative. Include the Secretaries of Commerce and Agriculture in your email. Let them know that tourist dollars can have a destination in rural Oklahoma. We can't let our neighbors to the South have better laws and regulations. We don't want to beat Texas. We want to join them in a rural economic revival spurred by the grape & wine industry!
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