State Senate Passes Liquor Omnibus Bill

It's no secret that I'm a big supporter of Arizona wine. I feel like we are in the neonatal ICU in terms of birthing a vibrant wine industry here. There are currently almost 90 licensed and bonded wineries in Arizona, some of which buy grapes and make wine; others grow grapes and sell to winemakers; and there are a few who grow and produce wine in their own facilities. In any of these cases, the producers of Arizona wine are no doubt happy with this week's passage of SB 1397, nicknamed the Liquor Omnibus.

See also: Celebrate Arizona with Dos Cabezas' Pink Wine and other Local Roses

Liquor laws across the country are a fraught subject. Since Prohibition the laws -- local, state and federal -- have been pieced together willy-nilly in a sort of house-that-jack-built framework that largely protects big distributors and industrial winemaking entities. The 21st Amendment to the Constitution re-allowed the consumption of alcohol and more importantly left the regulation thereof to the states, and/or municipalities, which is why you have dry counties in west Texas or drive-up liquor windows here in Arizona.

And it's why decisions by the Arizona Legislature are so important to the industry.

The establishment of the three-tier system is the lasting legacy of the 21st Amendment. Basically producers have to sell directly to distributors who then sell to retailers who ultimately sell to consumers. I know, that sounds like four tiers but the consumer doesn't count as a tier when we talk about it. The logic of the system is that, at each tier, the government can control the flow of alcohol to the general public, which, at the time, was a huge concern, it being the "Devil's Drink" and all.

Businesses like Arizona's small wineries, custom crush facilities, and tasting rooms largely do business outside of or on the fringe of the three-tier system which makes the laws governing them fuzzy and ill-defined. The Liquor Omnibus helps more clearly define some of the regulations concerning these businesses.

Last year the Arizona Wine Growers Association began working with others in the beverage alcohol industry to draft this legislation. The bill helps define more clearly what an "off-site" tasting room is, basically a tasting room that is not physically attached to a winemaking facility like the ones that have revitalized old town Cottonwood. These are places where wineries sell directly to consumers, thereby bypassing a distributor.

It also clears up what a "custom crush" facility is, which is where small start-up winemakers can pay a fee to make their own wine alongside other winemakers in one facility, Aridus outside of Wilcox is one such business so is FourEight Wineworks in Cottonwood. This bill enables other would be start-ups to begin on much firmer legal ground.

Thanks to the Arizona Winegrowers Association's hard work during the past year this bill seems likely to become law. It passed the State Senate this week and now heads to the House. There's not really a forceful opposition to it but a nudge to your state representative wouldn't hurt. Let's all do our part to keep the Arizona wine business growing and vibrant.

When I'm not writing this column or reading vintage charts to my daughter, you can find me pouring wine at FnB.

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Nathan Claiborn
Contact: Nathan Claiborn