Some Napa Valley wine industry groups continue to disagree about how Napa County should apply and enforce its 23-year-old Winery Definition Ordinance, particularly on how older wineries should prove their compliance when they want to expand.
While that rift is likely to be apparent at a meeting of the Napa County Planning Commission this week, it’s unclear if that will be enough to create a groundswell leading to major changes in the ordinance.
The commission is slated to hold a public hearing on the issue during its meeting Wednesday, but county planning staff isn’t recommending any change to the ordinance. Leaders of the wine industry groups also downplayed the significance of the meeting.
“I don’t anticipate the hearing to be a big event,” said Jon Ruel, president of the Napa Valley Grapegrowers’ board of directors. “I’m looking forward to moving on. We have other issues we have to be digging in on. As farmers, we’re going to go back to growing grapes.”
The issue came to light last year, when two major winery expansion applications went before the Planning Commission. The applications called into question whether the county’s grape supply would be enough to support continued expansions while also ensuring that wineries comply with the Winery Definition Ordinance’s 75-percent rule — the stipulation that Napa wines must be made with 75 percent Napa grapes.
The so-called “grandfathered” wineries, which existed before the WDO was adopted in 1990, have their pre-1990 production levels exempted from the 75-percent rule.
The discussions shifted to the rights those grandfathered wineries have, primarily to how they should show compliance with the WDO if they want to expand, and if the Napa grapes they crush under their current permits should qualify as a source for the expanded production.
The Napa Valley Grapegrowers and the Napa County Farm Bureau asserted in a letter to the county that grandfathered wineries shouldn’t be able to use current-permit Napa grapes in their expansion proposals.
The Napa Valley Vintners disagreed, saying that would force the wineries to divulge their purchase and source records for pre-1990 production, which are supposed to remain anonymous.
“Nobody wants to make a big deal out of this,” said Pat Stotesbery, a past president of the Vintners’ board of directors. “As long as the application of the 75-percent rule remains the same, we’ll be fine with it.”
Volker Eisele of the Napa County Farm Bureau said the problem is not going away, and will continue to crop up with new applications for expansion.
“The problem is increased with every new approval,” Eisele said.
County staff and counsel contend that this shift in enforcement would require a change to the ordinance itself, which they are not recommending. “There does not appear to be industry support/agreement about such a change,” a staff report noted.
The county’s grape harvest fluctuates year-to-year — 2012 was a record high volume — and county planning staff estimates that volume has increased by 25 to 50 percent since the WDO was adopted, according to a staff report.
The increase of permitted wineries has also grown, expanding from 212 wineries in 1990 to 404 in agriculturally zoned areas of the county currently. Permitted wine production has more than doubled in those areas in the past 23 years, from 26 million gallons to 62 million gallons, according to the staff report.
Some owners have permits for wine production, but haven’t built the wineries yet. Numerous wineries don’t produce to the maximum volume allowed under their permits.
Staff delved deeper into more recent figures, and determined the county has signed off on 55 new wineries in the past five years that must comply with the 75-percent rule. Those wineries have a maximum permitted production of 2.5 million gallons, according to the report.
In the past five years, the county also allowed 22 wineries to expand their capacity, which added 4.5 million gallons in increased production. Of those, 12 included grandfathered wineries in agricultural areas that accounted for 2.7 million gallons of increased production.
Eisele said the growth trend could lead to further disconnect between Napa County grape production and wine production.
“That grandfathered capacity can be converted to imported grapes forever and ever,” Eisele said. “We cannot fulfill the 75-percent rule if everybody is at capacity. We have essentially been looking the other way for the past 23 years.”
Rex Stults, government relations director for the Vintners, said the issue of sourcing for grandfathered wineries was considered before the Winery Definition Ordinance was adopted.
“It’s served the industry and valley well,” Stults wrote in an email. “Whatever happened to ‘If it ain’t broke, don’t fix it’?”
Stotesbery characterized the talks as a “day-by-day, moving target,” where agreement seemed close at hand, only to unravel.
“You think you’ve got some progress and it undoes itself,” Stotesbery said.
Eisele said he believes the topic will foster more discussions between the groups, although an agreement isn’t likely before the Planning Commission meeting.
“I imagine there will be a day where we will be talking again,” Eisele said. “It won’t be next Wednesday. We’ll just have to wait and see.”