Jim Clark: The business of booze in Nevada
July 23, 2014
Nevada Gov. Brian Sandoval campaigned for election on a platform which included attracting new businesses to Nevada.
He has acted on that promise with some success setting up an "enterprise fund" of $10 million, establishing Nevada business development authorities, personally going on foreign trade missions to increase commerce in Nevada and wooing industries in high tax states to move to Nevada.
If the object is to bring jobs to the Silver State, then you can't fault this strategy.
But largely overlooked until now is an industry whose product is in high demand irrespective of economic conditions … vineyards and winemaking.
The booze business had been around for at least 6,000 years. Vineyards figured prominently in Jesus' biblical parables and wine was the beverage of choice at the last supper.
This is a natural fit for Nevada. Most know that gaming is the state's economic driver followed by mining but it is a little known fact that Nevada's third largest industry is agriculture.
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The current annual economic impact of Nevada agriculture is $5.3 billion per year according to the University of Nevada at Reno.
Why are vineyards and winemaking such a natural for Nevada? It takes 42 to 52 inches of water per acre to grow alfalfa; UNR estimates that the market value of an acre of alfalfa is about $1,440.
It would only take 4 inches of water per acre to grow grapes and UNR estimates the value of an acre of wine grapes would be about $7,700.
Winemaking is a fast-growing enterprise. The 1000- plus page Oxford University Companion to Wine published in 1994 lists 30 wine regions in the world from Algeria to West Germany. Only two, California and New York, are in America.
In the intervening 20 years every state in the union has established wineries. Oregon's wine industry has grown to where it contributes $8 billion annually to that state's economy; similarly Washington's fledgling wine industry has mushroomed and adds $8.6 billion annually.
Why aren't vintners beating a path to Nevada? The answer appears to be politics. Liquor distributors hold great sway with Nevada's legislature and they are not wild about competition.
As a consequence, in 1991, when legislation permitting wineries was first passed in the Silver State, it provided only for operations in counties with less than 100,000 population.
Indeed since then Nevada has spawned Parumph Valley Winery, Tahoe Ridge Winery and Churchill Winery among others in rural counties but none in Clark or Washoe Counties.
Assembly Minority Leader Pat Hickey (R-Reno) has a proposal for the 2015 legislative session which would eliminate the restriction on Nevada's two most populous counties hosting wineries.
Senate Majority Leader Mo Dennis (D-Las Vegas) believes that "if it is good for Nevada then it is something we need to talk about."
How about Nevada's liquor distributors? Hickey's bill preserves Nevada's system of requiring all alcoholic beverages to be wholesaled by distributors (that's why Trader Joe's "two buck chuck" costs $3 in Nevada).
So there is no opposition there. Existing wineries? "I would be for as many wineries as our state could handle as long as they are all producing good wines and helping each other build a brand name for Nevada," said Colby Frey of Churchill Vineyards of Fallon.
The fly in the wine vat appears to be Sen. Tick Segerblom (D-Las Vegas) who says: "He (Hickey) didn't think my marijuana bill was good (in the 2013 session) so why would I think this bill is good?"
Come on, Tick. Let's not be petulant. Do what's right for Nevada.
Jim Clark is president of Republican Advocates. He has served on the Washoe County and Nevada Republican Central Committees.
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