On an August Saturday 39 years ago, New York Lt. Gov. Mary Anne Krupsak eased through the damp cellars and fragrant vineyards of Hudson Valley wine country, meeting with worried farmers. They told her that a statewide surplus of grapes during that year’s harvest, just under way, would seriously damage the bottom line of what was then the second-biggest wine-producing state after California.
Krupsak and the administration of Gov. Hugh Carey knew all about the challenges; her tour was largely for show. New York’s share of the national wine market had dropped 3 percent the year before, while California’s increased 7 percent. What’s more, existing regulations were exacerbating the weather-driven grape glut, which should have been a financial boon but was proving to be a curse.
Simply put, in 1976, winemakers couldn’t turn the farmers’ fruits into saleable wine fast enough. Help, though, was about to arrive.
Earlier that year, the state Legislature had passed, and Carey had signed, the Farm Winery Act. It allowed small producers to sell wine directly to consumers on-site. This included grape-growers (hence the “farm” bit, a synonym for “small”). It also reduced certain fees related to licensing and sales. An expansion of the act followed in 1978, raising the threshold of what constituted a small producer from 50,000 cases annually to 150,000.
The effects of this red-tape-slashing were dramatic and something to remember as yet another wine harvest gets under way now in wine-grape-growing areas throughout the U.S.
The number of New York state wineries grew from fewer than 20 to more than 400 today. Fifty of the state’s 62 counties have at least one — including, improbably enough, Manhattan and Brooklyn. In just the last 20 years, sales of New York-made wines have increased more than 50 percent to nearly 200 million bottles annually, generating some $420 million. As far as production, New York is third among all states — after longtime leader California and just behind Washington.
Though it looked likely in the mid-1970s that the state would slip from the top ranks, the reduction in fees and bureaucracy ballasted another generation, and counting, of New York winemaking.
Although Pennsylvania was in 1968 the first state east of the Mississippi River to pass a farm winery act, New York’s was the one that spawned copycats. States as diffuse as New Jersey, Virginia and South Dakota would follow its lead over the next three decades as the positive effects of Albany’s deregulation could not be denied.
Nor could the support of successive Albany administrations and legislative sessions. Laws promoting small wineries in New York state have only gathered strength since 1976, and the number of wineries, tourists and consumers has only grown. Today, New York’s grape-growing and wine industries contribute $4.8 billion annually to the state’s economy, not to mention $408 million each year in taxes.
New York would export this success not only to other states but to other alcohol industries within its borders. Gov. Andrew Cuomo cited the success of farm wineries since 1976 when he signed legislation in 2012 creating farm breweries. The legislation, deliberately modeled after the Farm Winery Act, also lowered taxes and fees for smaller beer producers — and, for that matter, distillers.
In under a year, the number of farm breweries in New York went from zero to 13, and the number of craft breweries in general rose from 53 before the changes to nearly 100 afterward. At the same time, the number of farm distilleries grew from 10 to 61. Such results looked very familiar — and, from now on, they should seem unsurprising, given the nationally pioneering groundwork laid more than a generation ago now.
This op-ed originally appeared in the Albany Times-Union.