Continued California Wine Industry Growth Reported in Recent Study -- July 1, 2004 -- California Capitol Hill Bulletin -- Volume 11, Bulletin 22

California wine industry leaders recently released a report commissioned by the Wine Institute, a San Francisco-based public policy advocacy group, and the California Association of Winegrape Growers, an association of wineries and affiliated businesses, entitled "Economic Impact of California Wine 2004."

The report's purpose, according to the Wine Institute, was to provide solid data on the state's wine industry to be used in public policy discussions. Conducted by MKF Research, it determined that the California wine industry has an annual impact of $45.4 billion on the state economy. It found that the industry grew by 40 percent between 1998 and 2002, and that during that period the industry and its affiliated businesses provided 207,550 full-time equivalent jobs, with a total of $7.6 billion in gross wages during that period. The wine industry increased jobs, it says, by a compound annual rate of more than nine percent during a period of rising unemployment in the state.

According to the report, between 1998 and 2002 the retail value of California's wine production rose 24 percent to $15.2 billion, the number of California wineries increased by 24 percent, the number of farmers growing grapes went up 9 percent, and acres devoted to wine grapes grew 11 percent to 481,264. Wine, the report says, was the state's third-largest agricultural export in 2002, valuing $486 million. And, in terms of specific wine sales, it says the state produced 3.1 billion bottles of wine in 2002 (an increase of 20 percent from 1998) with a combined retail value of $15.2 billion.

The report notes challenges facing the California wine industry, including strong foreign competition, a recent oversupply of grapes, an economic downturn and damaging insect infestations. Wine Institute President and CEO Robert P. Koch said the industry remains strong "despite the challenges of intense global competition, trade barriers, agricultural pests and the constant threat of increased taxes and regulations."

Praises of the industry and the report have come from Reps. Mike Thompson (St. Helena) and George Radanovich (Mariposa), co-chairman of the Congressional Wine Caucus. "California wine is vital to the state's economy," Thompson said, "This report will help demonstrate to our colleagues the importance of the wine industry." Radanovich, a vintner himself, called the industry a "key element" of the state's economy and said the report would "provide concrete information" for members of Congress.

To read the Wine Institute's release or for further information, visit http://www.wineinstitute.org/ .

To expand communications between Washington and California, the California Institute provides periodic bulletins regarding current activity on Capitol Hill that directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods.

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