Wilridge Winery near Yakima, Wash., is the first certified biodynamic and organic winery, distillery, and vineyard in Washington — and it’s owned by Paul Beveridge, a man suitably named for his calling in the wine and spirits business.
His career as an environmental lawyer didn’t stop Beveridge from making wine. In the 1980s, he and his then-wife Lysle Wilhelmi opened a restaurant in the Madrona neighborhood in Seattle and it was there Beveridge began to see the limitations and restrictions of the notorious three-tier system of alcohol sales in the U.S. It didn’t sit well with him, and while he and Wilhelmi parted ways and closed the bistro, Beveridge continued not only making and selling wine, but fully immersing himself in the industry — joining the Washington Wine Institute as a member of the board of directors, a move his law firm, Heller Ehrman, approved of.
That process was road-blocked again and again according to Beveridge, by politics and bureaucratic delays. Eventually, he resigned from the Institute and helped form Family Wineries of Washington, a collection of small wineries focusing on what’s good for consumers and small wine shops in the state. The organization also supported Costco in the now famous and successful 2004 lawsuit filed by the retailer against the state of Washington for violating fair trade and commerce laws.
Beveridge continues to make award-winning wine and spirits, runs several tasting rooms, and even sells organic pies with fruit fresh from organic orchards at Wilridge Vineyard — all while continuing to fight “the good fight” for wineries and wine consumers. Indeed, because of Beveridge, Washington may be the only state in the U.S. that has — at least in part — thwarted the three-tier system.
VinePair talked to Beveridge about his 30-plus years of challenging existing alcohol laws in Washington.
1. What was the first alcohol-related law you challenged?
Well, when we opened the restaurant and had wine there, we wanted to sell the wine to our customers and let them take a bottle home if they wanted. So we applied to the liquor control board for a license and were told it was illegal for a winery to have a restaurant. That was our introduction to the three-tier system. That fight took three years. Fortunately, the state had just passed brewpub legislation. So, if you think about it, the brewpub is an exception to the three-tier system. It’s a brewery-having retailer. So, we were able to get wine pubs legalized. That was my introduction to all of this.
2. What made the wine pub law unique?
We wrote that law so that we could have more than one winery at the tasting room. So, we opened up at Pike Place in Seattle. It’s the first multiple-winery tasting room in Washington. To the public, it seems like a co-op, but in reality, Wilridge opened that and shares the cost with other wineries. That’s huge for us because it’s great exposure for small wineries in places where consumers want to be.
3. How has Family Wineries of Washington State helped change liquor laws?
One example of what we’ve done is to get refillable packaging approved for wine. Ninety percent of the carbon footprint of a wine is transportation and melting of the bottle. Something like 50 percent of all alcohol in Europe is sold in refillable containers. We thought, “What a great idea. We’re the Evergreen State. Of course we’re going to pass this.” Well, Chateau Ste. Michelle’s lobbyists said “they’ll be selling wine in mayonnaise jars … they’ll ruin the reputation of Washington wines.” Of course, it’s all because they don’t want to compete with local wineries for glass pours. Keg wines and refillable containers support the little guys. The liquor board said, “Where does the statute say you can put wine in a refillable bottle or keg?” We got the attorney general’s office involved, and the liquor board said the statute doesn’t say you can put wine in a refillable bottle. We pointed out it doesn’t say you can put wine in a brand new bottle, either. Overnight, we got kegs and refillable bottles approved; the liquor board said OK to that. You still can’t get a bottle refilled at a restaurant, but you can at a winery.
4. What initiatives are you currently working on?
Our latest bill — and we’ve been working on it for six years — is just to give a tax break to small producers. Washington has the highest alcohol taxes in the nation. The breweries, cideries, and distilleries all get tax relief. Most small businesses get some kind of tax relief. We want to encourage them to be successful; we don’t want to stop them right off the bat. How come they can get this tax break but we can’t? We’re going to write again this year — we’ve drafted it so many ways. What we’re asking for is that the first 20,000 gallons be given a tax break. That would mean that 94 percent of the wineries in Washington State would get major tax reductions because they’re smaller than 20,000 gallons of production. We even offered to write it so the big wineries would get the same tax break, but they still oppose it.
5. You did get the ability to distill spirits. How did you get that passed?
I always wanted to make grappa because [at the end of winemaking], you have this waste product. But the liquor board said, “Where does the statute say that a winery can have a distillery?” Well, where does it say that you can’t? What if we have it on separate properties? Well, I’m a small business, I can’t afford to buy or rent another property — how about we do it in separate buildings? Eventually, the Feds allowed [wine and liquor to be made in] the same building with a line on a floor; you can just paint it. But in Washington State, I was only able to get [them to approve] chain link fences. So, you can go into facilities in Washington today, and you’ll see it’s a chain link fence, separating one owner from another owner, or one operation from another operation — well, that’s from me, from our little group. And the thing that always slays me is the gates are always open on the chain link fence. They don’t even lock them. And that didn’t take legislation — that just took staff at the liquor board saying, “We are beyond reasonable on this; we’ll let you do that.”
6. Where do all these prohibitive laws stem from?
We call the liquor board “the department of no.” Any little thing you want to do, you have to go to the legislature — the reason [the three-tier system and ensuing laws] survive is they protect the big guys and the distributors from competition, and they fund a lot of lobbyists in Olympia. That’s why they don’t want a free-market organization like Family Wineries of Washington State to be successful. Even if what we propose is innocuous — or even totally beneficial, like our tax bill — they’ll fight it.
We met with the chairman of the House committee that regulates alcohol about 10 years ago. We brought him a case of wine donated from all our members that he could use during fundraisers. He said, “Oh Paul, this is so nice. Yesterday, the distributors wrote me a check for $50,000.” And he was willing to stand up to them — he couldn’t be bought. Until we get the money out of politics, this will never get fixed. But at least in Washington State, we have Costco and Amazon — we have powerful retailers, so we’ve been able to do more than any other state.
7. So it really is about protecting the three-tier system?
Yeah. In most states, you are legally required to go through that middle tier, the distributor. As all this evolved, we actually successfully got rid of the three-tier system in Washington State. We may be the only state where you are not required to go to a distributor. We have direct sales (and that’s due, in part, to Costco’s lawsuit). And what’s amazing is that not a single distributor went out of business. They don’t need to have this legislative mandate; that’s just laziness. Good distributors go out and sell their product and add value. 90 percent of the wineries in Washington don’t even have a distributor. We’re too small, we’re just a hassle. The guys really getting screwed are the small retailers. How many small wine shops are there left in this state? They can’t sell spirits, they can’t get a quantity discount, they can’t get 30-days credit. So then, you end up with no selection. Costco’s great if you want to buy the name-brand stuff, but they don’t represent 90 percent of the wineries.
8. Ultimately, this falls on the consumer, doesn’t it?
That’s it. Part of the three-tier system is the old argument that alcohol is evil, and public safety is at risk. So, anything that’s going to make alcohol less expensive or more accessible has to go through the legislature. And the old-timers who support this say, “Well, if it’s not permitted, then it’s prohibited.” But that’s not democracy, where things have to be declared illegal before they’re illegal. It’s a story we keep having to tell because the consumers don’t have anyone in Olympia representing them.