wine industry

Winery audit finds almost half didn't comply with use permits in 2013

2014-08-06T15:54:00Z 2014-08-06T19:35:23Z Winery audit finds almost half didn't comply with use permits in 2013Peter Jensen pjensen@napanews.com Napa Valley Register

A random audit of 20 Napa County wineries last year found eight that failed to comply with their use permit, either by exceeding their permitted production limits or by having more visitors than they were supposed to.

The results were discussed at a meeting of the Napa County Planning Commission Wednesday, and similar to past years, sparked a debate over whether the county was doing enough to ensure wineries are complying with their use permits.

In the annual audit, the county Planning Department selects the 20 wineries at random out of a pool of the approximately 400 active wineries in Napa County. It checks to see if their total gallons of wine production is within their limit, whether they’re complying with the rule that Napa wine be made with 75 percent Napa grapes, and if their visitation and marketing plans are up to code. Results of the audit are kept anonymous.

Commissioner Bob Fiddaman questioned if the wineries that don’t comply deserve anonymity, and noted that some wineries last year had significant violations. One winery had 1,000 more visitors than its weekly maximum of 400, while others held marketing events when they weren’t allowed to have any.

“I’m pleased to see we’ve got substantial compliance with this audit,” Fiddaman said. “There are some fairly significant exceptions, who I would characterize as scofflaws.”

But planning staff responded that wineries’ participation in the audit is voluntary, and the county’s goal is to bring them into compliance without drawn out, expensive legal actions. Mandating participation could lead to that, Deputy Planning Director John McDowell said.

“I’m lucky that people actually do report,” said Linda St. Claire, who conducted the audit for the Planning Department. “We’ve had really good compliance coming out of the audit.”

Michelle Novi of the Napa Valley Vintners said the audit was a good reason for her organization to stress the importance of use-permit compliance to its members, which it plans to in a workshop next month.

“The results of this year’s audit are somewhat disappointing,” Novi said. “This year’s audit will become the exception, and not the rule.”

Wineries above their permitted production capacity for one year are allowed to use the totals from the last several years to create an average if that will bring them into compliance. Two wineries that exceeded their production limits last year were able average their 2012 production to get under the cap, St. Claire said.

A third winery exceeded their limit, and will have to get a use permit modification, St. Claire said. A fourth winery produced no wine for the last nine years, and instead has been selling older wine to guests during tours and tastings. That violates the use permit, and the winery will have to start producing wine or else face having the permit revoked, she said.

Only one winery failed the 75-percent rule, a key provision of the county’s Winery Definition Ordinance that affects new wineries granted use permits after 1990, or older wineries’ expansions after 1990.

Using the grape sourcing documents submitted to the California Department of Food and Agriculture, St. Claire found that the winery had only used 52 percent Napa grapes, with the rest coming from Sonoma and Marin counties. The remaining wineries either weren’t subject to the 75 percent rule because they predated its passage in 1990, or were using 94 to 100 percent Napa grapes.

Compliance with visitation and marketing event limits was harder to come by. Eight wineries, including those that exceeded production or failed to comply with grape sourcing requirements, either had too many visitors in a weekly check, or held events they weren’t supposed to.

The violations ranged from having a cap of 28 weekly visitors but hosting 45 to bringing in 1,400 people when the weekly maximum was 400. Two wineries who weren’t allowed to hold marketing events held seven and eight such events, respectively.

David Hallett, a Soda Canyon resident, said the results of the audit signals that a far greater number of wineries were likely out of compliance with their use permits as well. He said the county needed to hire more staff to expand the audit.

“That is not auditing,” Hallett said. “That is sampling. That is a lot of wineries that are probably out of compliance. They don’t have the personnel to do it.”

Winemaker Robert Mondavi Jr. responded that this could jeopardize the relationship winery owners have with the county government, when the majority works hard to comply with their use permits.

“We want to comply,” Mondavi said. “We’re talking about a lot of government — a lot of compliance. We have to run a clean shop. We want to do that because we love this valley. I just want to be cautious about how far this pendulum can swing.”

The commissioners agreed that expanding the audit was unnecessary, and that county code enforcement acts to bring wineries into compliance if the voluntary measures aren’t effective.

“They are not languishing,” Commissioner Mike Basayne said. “We are, in fact, acting on the violations that we’ve observed.”

Copyright 2015 Napa Valley Register. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(23) Comments

  1. napablogger
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    napablogger - August 06, 2014 7:24 pm
    These are terrible results and what it means is that maybe if we enforced the rules we already have we would not have to be talking about creating new rules with greater limitations. Just maybe the rules are working if we would just enforce them.

    I agree with the sentiment that the county needs to audit a lot more wineries and we have got to get this thing under control. Otherwise we are going to face a big rebellion.
  2. frustrated75
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    frustrated75 - August 06, 2014 7:48 pm
    So why bother with use permits if you aren't going to penalize those that exceed them? These wineries along with poor city and county management are going to be the ruin of the beautiful valley.
  3. Valid8everything
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    Valid8everything - August 06, 2014 10:18 pm
    I have witnessed it for years as a employee and my contemporaries at other wineries always confirmed the same things and that is that the vintners do their own thing and are accountable to no one. Ms. Novi said they are planning a workshop to deal with the issue but I bet good money the subject with be how to better circumvent the compliance laws. Robert Mondavi Jr. basically threatened us by saying audits jeopardize cooperation between wineries and local government. Is that not infuriating to any one else?
  4. Crosscountrykid
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    Crosscountrykid - August 07, 2014 5:27 am
    I'm wondering if the County and vintners' groups haven't already lost effective regulation over the wine industry. A conservative extrapolation of these numbers in the article would have over 100 wineries out of compliance of their permits. The changing business model of a winery has the WDO doing catch up. More legal cases involving wine make the news. It seems like it's become a bit like the ole' Wild West out there in grapeland, with too few sheriffs to maintain law and order.
    Eric Vaughan
  5. Lenny Pepperidge
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    Lenny Pepperidge - August 07, 2014 6:42 am
    I'm not surprised at all. I spent a year consulting for several high-end "boutique" Napa Valley wineries, and walked away literally stunned and disgusted at the almost sociopathic level of entitlement and narcissism that these people display. They are a privileged elite doing more important work than every surgeon, diplomat or scientist combined, and everything and everybody exists to serve their needs. Not surprised at all that they would violate state and federal laws without a second thought if it suited their needs.
  6. Kingsbridge
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    Kingsbridge - August 07, 2014 6:47 am
    It does seem as though some of these winery businesses do what they want with no fear of getting caught as the "penalties" are so weak. They build vineyards with no permits and then a paltry fine; run events they're not permitted for...David Hallett is correct, the county is doing sampling by asking the wineries to answer a questionnaire--that is not auditing. Auditing is where you go out and check the books. And what exactly is Mondavi Jr. threatening? If he loves this valley surely he has noted that the situation is our of control. He and the Vintners better reign it in: this is no longer the bucolic valley of family farms, it is widespread corporate ag-business which is killing the golden goose through greed.
  7. corvid
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    corvid - August 07, 2014 7:49 am
    What no names? I guess you can only embarrass people in the paper if they drink the product.
    Kingsbridge, you summed it up very well in my book. I see this non-compliance on a daily basis. Bulging production and bulging tasting room - way over the permit for the property.
  8. napablogger
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    napablogger - August 07, 2014 8:39 am
    Timothy Keith you said--->>>>What exactly is out of control? A winery having too many guests?
  9. GrowNapa
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    GrowNapa - August 07, 2014 9:40 am
    Stop the witch hunt! The community is very quick to condem the very industry practices that has made their very own property values increase ten-fold over the last 30 years. If the community feels so strongly and "disgusted" about businesses exceeding their use permit, then lets audit every restaurant and hotel while we are at it. Then on to the gas stations, nail salons, grocery stores, dry cleaners and lets not forget the ultra-villians, those fruit stands on Silverado trail. If you want enforcement, apply it across the spectrum of commerce, not the spectrum of a singled out industry. The industry which federally protected this valley in 1968. The industry that set the minds of local government towards conservation, slow growth of housing, protecting our hillsides from huge condo developments and so on. The ONLY REASON Napa Valley isn't a concrete mini-metropolis is because of the wine industry. Yes people like to visit wineries! Yes wineries don't like to turn people away. SHOCKER
  10. Lenny Pepperidge
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    Lenny Pepperidge - August 07, 2014 10:18 am
    @GrowNapa, thanks for proving my point that the Napa Valley wineries truly believe that they are the Lords and Ladies of the Valley and things such as THE LAW don't apply to them, just the plebes who exist only to serve their needs.

    And please explain to me why any of your points in their favor allows them to willfully break the law. As for your other businesses to audit, were they to engage in such widespread abuse and breaking of the law, they would certainly deserve to be audited, but there is no evidence, in contrast to the winery industry, that they are.
  11. eischeid
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    eischeid - August 07, 2014 11:13 am
    Easy for us to read between the lines on Mondavi's comments. What an out of touch elitist, bordering on sociopathic.....the rules shouldn't really apply to us
  12. Lenny Pepperidge
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    Lenny Pepperidge - August 07, 2014 11:59 am
    Well, if the Napa county officials are too cowed and timid to act against the local Masters of the Universe, the market has no such hesitation. While I'm sure that Hwy 29 is still full of orthodontists from Reno or Omaha this time of year, just try giving away high end Napa Valley wine in SF or New York or Chicago. In the Michelin starred restaurants and trendy wine bars in the major metropolitan wine markets that the Lords and Ladies are so desperate to be a part of--that they consider it their God-given right to be listed in--Napa is worse than out of favor. It's viewed as an almost comical vestige of bad taste and immature palates.
  13. napablogger
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    napablogger - August 07, 2014 12:56 pm
    Somehow the rest of my comment got cut off to Timothy Keith, but it was:

    Yes, exactly, a winery having too many guests and too many employees is the exact reason for the limits. This applies to GrowNapa as well, you don't seem to understand what it takes to maintain farming in an increasingly urbanized environment.

    We have these rules because farming and urbanization are incompatible and if we continue we will lose farming, you can't have both. Every farming area in the country that started to grow and urbanize eventually lost all the farming, for a variety of reasons.

    As we continuously expand traffic, needs for housing of employees, use of water, we we lose the farms just like what has happened everywhere else. As they say, it is not rocket science.
  14. Valid8everything
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    Valid8everything - August 07, 2014 2:16 pm
    You give these greedy pustules to much credit. The industry is valuable because natural conditions are ideal here not because of the people who profit from it. Slow growth and property values? Give me a break kid, the vintners are destroying our reputation and things will get worse when perception of quality is diminished. Why you would cheerlead them is well beyond me unless your family is producing wine also. Good vintners would welcome an audit. You are defending scum.
  15. enufgovernment
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    enufgovernment - August 07, 2014 3:28 pm
    Good grief. Enough government already!!!! And them telling what and when people who own property what they should do ALL the time. Don't get me wrong. I'm not in favor of abandoning law and order. But knowing first hand what some vintners do AND knowing what the county does towards enforcement is simply not right either. But the fact of the matter is that our government has too much power towards the property and business owner. If the government is so damn smart why are they always running out of money and over hiring, can't balance a budget on time, etc. Please, when is the last time you witnessed a local state or federal government agency running efficient? How many more "shovel leaners" do we need to tell us how to run our businesses?
  16. vocal-de-local
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    vocal-de-local - August 07, 2014 10:42 pm
    The reason we need government, enuf, is because of people who think like you do.

    And no, you cannot just do whatever you want with your property. You cannot hog all the groundwater, for example. You cannot just put up a gas station in the middle of nowhere because it's "your property".

    Government grows bigger to respond to business growth, even illegal business growth.

    The more visitors to a winery, the more delivery trucks and employees needed; more traffic is generated and more law enforcement is needed to respond to accidents etc.

    It doesn't take a genius to figure that out.

  17. EEArt
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    EEArt - August 08, 2014 8:14 pm
    So let me understand this. You have a local economy based on a wildly successful product that pretty much pays for everything here, including salaries and taxes, and you have rules in place to limit the success of these businesses? Because these businesses wanting to do as much business as possible is "greedy".
  18. Annoying_Gnat
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    Annoying_Gnat - August 08, 2014 9:06 pm
    What ever happened to the fine character of Napa wines?
    Nowadays I FLIP A COIN TO DECIDE WHETHER TO mix RED OR WHITE NAPA WINES with olive oil FOR MY SALAD DRESSING?


    NAPA SINCE 1951
  19. Savethechildren
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    Savethechildren - August 08, 2014 10:21 pm
    There is plenty of money to be made operating under the confines of a specific use permit; most wineries can and have done this extremely well without cheating on things like marketing events. More and more people coming into this industry seem to be unfamiliar with how it works here... play by the rules, make lots of money, go home and have a glass of wine. very simple.
  20. vocal-de-local
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    vocal-de-local - August 09, 2014 3:35 pm
    Annoying, there are still some great Napa Valley wines but too many large corporations and some inexperienced smaller vintners who do not know what they were doing came here and decided that quality was not important because the Napa Valley name would compensate for inferior wine.

    Consumers also want good wine around the $20 price range and it's hard to fine around here.

  21. wiseone
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    wiseone - August 10, 2014 7:38 am
    Oh,please,EEART. Spare us your tired Libertarian rant. Your "too big to fail" argument went out of fashion when the banks and Wall St. used it to hold our federal government and economy hostage recently. The"we should let corporations do as they want" reasoning is simply bankrupt.Government-and rules-exist for legitimate reasons.
  22. foss valley
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    foss valley - August 11, 2014 10:59 pm
    Baby boomers are killing this country
  23. EEArt
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    EEArt - August 12, 2014 6:14 pm
    Complete non sequitur. The wineries are not "too big to fail" because they are not on the verge of failure at all. How many hundred in the valley? So they are not "too big" either. Most would produce more tax revenue and jobs if allowed to do so.
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