WITH THE AUTUMN grape harvest complete, winemakers are tackling the evergrowing cost of doing business in the state, with wineries saying they can't pass along to customers the latest excise tax on their products. The latest excise tax increase from the state took effect in August Along with wine, the price of liquor rose 22 cents per comparably sized bottle. Larger wineries, such as Renault Winery Resort, in Galloway, face much higher payouts, said owner Joseph Milza Sr., and it sells some 25,000 cases annually - meaning the excise tax will cost the winery some $10,500 each year.
SOUTH JERSEY By João-PIErrE S. ruth WITh ThE AuTuMN grape harvest complete, winemakers are tackling the ever- r Imag es Jupite growing cost of doing business in the state, with wineries saying they can’t pass along to customers the latest excise tax on their products. Bellview Winery, in Landisville, like its South Jersey contemporaries, has seen its revenue squeezed by the recession. An addition of a 3.5-cent fee per 750-millili- ter bottle may seem like a drop in the wine barrel, but Bellview owner Jim Quarella said the extra price might leave consumers wrinkling their noses as though tasting an excessively tannined Shiraz. “I don’t see any way we can pass that on to the consumer at this point,” he said. “It’s another hit we have to take.” Sharrott Winery, in Blue Anchor, is likewise shouldering the latest tax from the state rather than increase its prices. “We’ll end up absorbing a significant portion of it,” said Larry Sharrott Jr., owner of Sharrott Winery. Charlie Tomasello, co-owner of Tomasello Winery, in hammonton, agreed. “It’s very difficult to raise your prices a few cents,” he said. “While trying to provide value to consumers, raising prices is not an option.” The latest excise tax increase from the state took effect in August. Along with wine, the price of liquor rose 22 cents per comparably sized bottle. Quarella said wineries cannot compensate for the tax by simply mov- ing more wine. “This is not the economy where you can just go out and sell your product,” he said. “It’s hard to make sales now. It’s not a growing market.” With the increased tax cutting into income, Quarella said he is looking for ways to reduce expenses, while hoping to recoup revenue when the economy recovers. he said though the number of sales at Bell- view increased this year, revenue slid as shoppers shunned premium vintages for lower-cost wines. Even with the election of a new governor, Quarella held little hope for relief from the latest levy. “It seems like taxes don’t go Mounting taxes are making it away,” he said. And it’s not just taxes that are adding costs — the high cost of even tougher for South Jersey’s fuel for farming equipment is adding expenses, too. A relative new- comer to the southern New Jersey wine market, Sharrott has kept wineries to stay profitable. abreast of what he calls the “long, slow progression of taxes” the state has historically doled out to the wine market. Nonetheless, two year-old Sharrott is still growing, he said. The winery produced 1,700 cases of wine in 2008, with Now, they’re being forced to 12 bottles per case, and is on target to produce 3,500 cases in 2009, he said. swallow another increase on Sharrott makes 14 varieties of wine priced from $10.99 ➤➤ See WINE on page 20 liquor — or risk losing customers. INTAXICATED www.njbiz.com njbiz u November 30, 2009 19 south jersey NJBIZ File Photo “People are beginning to recognize New Jersey wines. the quality is coming up dramatically, and we really are a bargain.” Larry Sharrott Jr., owner, Sharrott Winery Christina Mazza Smarter Agent CEO Brad Blumberg jokingly says his firm may be kicked out of a Camden business incubator for being too successful. He now employs more than 30. Incubator helping
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