Buzzkill: Government shutdown put squeeze on Virginia wineries

Brian Schornberg (right) of Keswick Vineyards says the government shutdown hurt business. Photo: Amy Jackson Smith Brian Schornberg (right) of Keswick Vineyards says the government shutdown hurt business. Photo: Amy Jackson Smith

Even though the federal government shutdown is temporarily on hold, Virginia’s winemakers have taken an economic hit that will only worsen if the freeze resumes as announced, on February 15. Regardless, the negative effects are likely to linger into the spring and summer,  industry sources say.

The primary sticking point is the Alcohol and Tobacco Tax and Trade Bureau, which must approve formulas and labels for new products before they are issued for public consumption, whether by bottle, can, or keg. While TTB employees were out of work, the fine folks who make your adult beverages were out of luck.

“If a winery loses a new wine because it has sat too long [before bottling] and aged-out, that’s a big deal,” says Mary Beth Williams, of Williams Compliance and Consulting, which represents 150 wineries statewide. “The government is tying winemakers’ hands.”

Luca Paschina, general manager and winemaker at Barboursville Vineyards, says most of his recent vintages will make it to market in spite of the shutdown, because wines produced the same way year after year are not subject to TTB approval, known in the industry as a COLA (Certificate of License Approval). Regardless, he’s still concerned.

“I do have two labels awaiting approval,” Paschina says. “They are for wines we intend to release later in the year. We’ll have to wait and see what happens.”

Other wines hijacked by the TTB closure included a new viognier by Septenary Winery, in Greenwood, and a sparkling white by Peaks of Otter Winery, in Bedford. “We wanted to have this wine ready for sale by this summer, but I’m not sure that will happen now,” Danny Johnson, Peaks of Otter’s co-owner, told The News & Advance of Lynchburg.

Closer to home, at Keswick Vineyards, the shutdown impact has been both immediate and quantifiable—and a hindrance to expansion plans the owners had hoped to realize in the spring.

“The majority of our traffic on the weekends is from the D.C. area, and that has been drastically reduced,” says Brian Schornberg, Keswick’s wine club manager and son of Al and Cindy Schornberg, who bought the winery in 1999. “A lot our customers work for the government and [were] not receiving a paycheck. So, they put off visiting, which put a dent in tasting-room sales.”

Keswick has also had “about a dozen wine-club cancellations,” which translate to monetary losses of “several grand a year,” he adds.

Keswick had also applied months before the shutdown for TTB licenses to execute expansion plans, Schornberg says. He declined to reveal specifics, but hinted that the winery may be looking to increase wine production or make another type of alcoholic beverage. Whether that’s cider, beer, or spirits, the plans are on hold.

“We were hoping to have all of our plans approved so we could begin production by April,” he says. “That’s not going to happen. We’re kind of handcuffed, to tell the truth.”

The shutdown came on the heels of a grape harvest depleted by the year’s record-breaking rainfall, which caused some wineries to lose 40 percent or more of their fruit.

“The 2018 vintage was already weird,” Williams says. “Winemaking, and bringing a wine to market, is extremely time-sensitive. It may not seem like a huge problem today, but I do think it’s going to emerge as one in as soon as a couple of weeks.”