To Whom It May Concern
Meet Sonoma County Growers, this Monday to hear their plan to create a tax that they want to institute. It’s regarding a new tax proposal imposed by the county, for all direct-to-consumers wine sales. And, I’m very clear that not everyone is happy, at all.
I was drawn in on Facebook late last week, so I published the nitty gritty. It was titled “Solve 1 Problem, Create 1 More.” The drama will continue with a meeting this Monday, hopefully moving toward some understating, perhaps moving toward some resolution. A meeting of the minds, if you will. Monday, August 4, 2025, it’s from 3:00 p.m. to 5:00 p.m., held at SCW Office, 3245 Guerneville Road, Santa Rosa, CA. 95401. If you can’t physically make it, you can attend via ZOOM. This is the ZOOM LINK for Sonoma County Meeting, August 4, 2025. The Passcode ~ 869761.
A Great Question Was Asked
Vintner Daisy Damskey asked a great question, about the proposed tax. Daisy is part of the Terroirs Wine Consulting team. She asked, “I’d love to hear more insights on today’s headline. As a DTC-only (Direct to Consumer) winery that produces less than 1,000 cases… It appears to be a tax on small producers (perhaps with no export connections). This would be great for big producers, wanting international distribution. Many of these wine producers do not have tasting rooms.
My Questions
What are the wine marketing initiatives, for the Wine Improvement District (WID) initiatives across Sonoma County to boost sales and visitation? And, let’s start with this one, how do we know the funds are only to benefit Sonoma County, and won’t be distribute to international travels to also support imports of Sonoma County products? Just a natural question of a wine marketer. And here is another one. How do we know the funds are only to benefit Sonoma County, and won’t be distribute to international travels to also support imports of Sonoma County products? Just a natural question of a wine marketer. And another once in this theme of “How.”
North Bay Business Journal ~ North Bay Business Journal also has questions. Addressing this concern for the local wine industry, which has quickly drawing criticism from some winery owners. “The white wine industry has been suffering in recent years, as an industry. Paraphrasing a bit. Why do you think increasing rate is going to make Sonoma County looked upon more favorably. Please address this issue raised: Small wineries are doing everything they can to stay afloat and to keep direct-to-consumer sales alive. By increasing rates, this would ultimately drive away consumers.
Financial Advice
A true success story today is Suisun Valley. According to USA Today, states that Suisun Valley is the number one place to visit in the US. How do you plan to compete with this, by raising rates? There is no such tax there. If a tax were instituted, they would lose this position very quickly. This isn’t shameless promotion, it’s a reality check. And it took years to get here. It happened slowly over time.
And, Yahoo Finance: While there is no official declaration of a recession at the moment, many economists and analysts are warning. A recession may be on the horizon, or that we may already be in one. My Question, on the precipice of a recession, do you really believe this is good timing?
Suisun Valley is the number one wine region is the US to visit right now.
While Top economist warns the U.S. is ‘on the precipice of recession’ — and it will be hard for the Fed to come to the rescue, do you really believe the timing is right?
Locally, Results Have Shocked More Than A Few
An answer in the Santa Rosa Press Democrat, really brought a bright light to the subject claiming this. “Sonoma County wine industry went into a tizzy this week.” The steering committee of regional leaders got together to explore a potential assessment, which will be an out-and-out tax. Where it will come from is directly on all winery consumer sales, mostly in small wineries. This tax money is going to raise prices for small wineries. And, large companies, which don’t even have direct consumer sales, are exempt. Small companies are trying to find the fairness in this plan, while it appears there’s nothing in it for them.
The reason for the tax is explained as when the money is collected will give the larger companies cash to travel the world, which is not something small produces are able to do. So why the tax? So larger companies can encourage their wines to be placed in an export market. This is just great for them, but what about the smaller producers who have to program and manage these sales to be collected, all their American consumers? Just think about that!
Agenda: Monday, August 4, 3:00 to 5:00 p.m.
Agenda for Sonoma County meeting August 4, 2025, regading an new tax
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Written by Jo Diaz, a partner of Diaz Communications, who is helping to make stars realize their dreams. Edited by partner Jose Diaz. To reprint, please contact Jo Diaz: jo@diaz-communications.com
As a small producer based in Sonoma we’ are already charged for two big big overheads from the Grape Growers and the Sonoma Vintners. Both of which have not been impactful for our business.
I would suggest that these two organizations merge and the saved overhead of several million dollars could go towards DTC marketing!
It’s an interesting suggestion. I’m going to write about the meeting, and I have some marketing advice, too, Ken.
There some major problems with this proposal.
1. Business Improvement Districts formed under Streets and Highways Code sections 36600-36671, as this would be, cannot legally charge or “pass through” the assessment to customers. There is no such option as there is for state-levied assessments under Government Code sections 13395-13395.118. The latter law only applies to state-levied assessments, not county-levied ones.
2. The assessment must match the specific benefit provided directly to each paying business. Those located within zoning for agricultural and residential uses are conclusively presumed not to benefit from the improvements and services funded by the assessments and therefore cannot be assessed.
3. A marketing program designed to draw visitors to a region in general, as this proposal would do, does not meet the definition of a tax exemption per Prop 26 and therefore would be an unconstitutional tax needing voter approval.
Very interesting, Teri. I’ve passed along to people opposing this “Business Improvement District’s” desires.
Besides the fact that a sales tax on consumers to pay for a trade group’s marketing budget is a boondoggle and just plain wrong… The proposed 1-2% tax solely being on direct to consumer sales would disproportionately impact the smaller guys for the benefit of the larger guys (who actually buys La Crema or Kendal Jackson etc directly?). If winey trade groups need to raise revenue (not consumers problem at all) why not a tiny levee, say 0.1% on all wine sales across DTC, all retail, restaurants, bars etc etc. I’m not in favor of any such tax but taxing all sales, and hitting all the big producers too is only fair.
Proposals like this are hardly a surprise when the trade groups like Sonoma County Winegrowers/Vinters are so captured by the biggest players in the business, and the commodity wine producing mega corporate brands wield all of the power and voting rights.
If there is oversupply, maybe some vineyards / wineries should close down?
If the wine business is failing to attract the younger consumer, maybe it should make changes needed attract them?
I’m working on a story right now, LOJ, called “Wine Unlocks The Sensual In Us.” As Dr. Ruth Westheimer realized “Sex Sells,” not some greedy grab for more revenue. If someone wants to make more money, hire a daring and creative writer.