Wineries and restaurants in the Yakima area have been informed by the Washington State Liquor Control Board (LCB) that they can no longer permit same day purchases at local wineries to be consumed ‘corkage free’ at local restaurants. The ‘corkage free zone,’ which had been in effect in Yakima for a little over a year, had been widely reported and had been embraced by businesses and consumers alike.The corkage free idea originally came about from restaurant owner Jar Arcand of Yakima’s Santiago’s. “One day a light came on. It’s a no brainer,” Arcand says. “I realized I’m not losing any money on the deal because I’m not buying any wine. The idea was to make it more fun for the consumers.”
Arcand started a pilot program, then, after seeing success, approached downtown Yakima restaurants and wineries about the idea. While there was initially some resistance, the ‘corkage free zone’ was ultimately embraced by numerous wineries, tasting rooms, and restaurants alike.
However, when other areas of the state looked to emulate Yakima’s success, the LCB took notice. In a letter dated November 30th, Captain Jennifer Dzubay of the LCB wrote, “As great as a marketing tool that this is, I regret to inform you that this is illegal and I must advise you to cease the program immediately.”
According to the letter, the LCB believes several laws are at issue. Specifically:
WAC 314-12-140(1) states that, “no industry member or retailer shall enter into any agreement which causes undue influence over another retailer or industry member.”
RCW 66.28.010 and WAC 314-12-140(2) “prohibits money or money’s worth between the Tiers. A winery cannot negotiate with retailers to waive a corkage fee. Retailers cannot waive corkage fee for particular wineries to entice their customers to purchase wine from a winery.”
While the LCB’s concern involves interaction between the tiers and “undue influence,” Katherine Goodson of Yakima’s Kana Winery says, “This is solely about the community. There was no money that was going back and forth between the restaurants and wineries. It was kind of a thank you for coming in to Yakima and for spending your dollars here.”
Arcand and others hope state legislators will take up the issue. According to the Yakima Valley Business Times, the Washington Wine Institute has shown an interest in the matter.
Arcand, who would like to see the corkage free idea adopted statewide, laments the decision saying, “In today’s economy, you cannot afford to be squashing a business like this.”
I second that.
ReplyDeleteI think there are a couple things at issue here from my reading of the applicable laws and from additional information from the LCB (more on this in a subsequent post).
ReplyDeleteThe first is a 'discrimination' against other wineries that are not participating in the program. These wineries (not sure if it matters if they are WA or not) are at a disadvantage. This would be fixed by making a 5 cent corkage fee for any wine *purchased that same day directly from any winery.* However, the second issue is *restaurants* that are not participating in the program being at a disadvantage. This is a more difficult one to address. The third, and I believe most serious issue, is the issue of "money's worth" which prohibits any types of gifts etc across the tiers.
Ultimately I believe resuming the corkage free zone will most likely require legislation.
Oy. Talk about overregulation. They've been out for blood lately.
ReplyDeleteAnd to think that the two liquor initiatives were defeated. Passage may not have resolved or prevented this situation. I'm just saying.
ReplyDeleteIsn't an alternative to have a minimal corkage fee and just open it up to all wineries? The restaurants could place flyers at the wineries (like they do now) simply advertising reduced corkage. They could selectively place those flyers at wineries who "particiapte" in the, now illegal, program.
Lastly, why the heck does the WSLCB have a "Captain"? Captain of what? Is this becuase they have some quasi-enforcement role?
Lesislation smegislation. I vote for succession from Olymipia. Return the land north of I-90 to Canada, give the land South back the Yakama Nation. We'll all live better.
ReplyDelete