Senate Select Committee on Select Committee on California’s Wine Industry

Good afternoon. And we're going to call the this first meeting of the Senate Select Committee on California Wine Industry to order. I'm Senator Christopher Cabaldon. I'm the. The chair of the Committee. And I also want to thank Assembly Majority Leader Cecilia Aguiar Curry for her leadership and her participation.

Want to welcome our presenters and Members of the public. We are being televised through the Senate's streaming service. So this, this is both live today and also will be available on the Senate website for repeat viewing.

And I want to say thank you to our host today at Napa Valley College for having us here on the campus and, and ask the superintendent to please give his welcome remarks.

All right. Thank you, Senator. Good afternoon, Dr. Torrence Powell. I'm the Superintendent President here at Napa Valley College. Just very briefly wanted to say welcome to our campus. It is an extreme privilege and honor for us to host such an important event for our region and for our state. Here at the campus, we are inextricably

linked to the wine industry in the wine field, being a licensed and bonded winery ourselves. So really looking forward to the chance for you to be on campus and to do some productive work. So just want to say welcome to Napa Valley College. Welcome to Napa and have a great meeting.

Terrific. Thank you so much, Mr. Superintendent. Assembly Majority Leader, would you like to make some opening comments?

I'll make it quick. Thank you everyone for being here. You know, Napa Valley is the heart of our wine and economic development here in the valley. Is it on now? Okay. I just want to thank you all for being here. Wine is such an important asset to our community. And it's just delightful to see everybody here today. As you know, is that I been working in this area for 10 years, hopefully a few more years.

And I've always enjoyed and appreciate the input that all of you have provided myself in your agricultural community. So thank you very much for being here today. I look forward to the conversation.

Thank you so much. And I also want to just welcome everyone and say first of all that it's hard to imagine civilization without wine.

We sometimes talk about the long standing wine industry, but really I think some anthropologists would make the case that might not be here at all if it weren't for the power of wine to bring people together, to.

To reduce tensions, to bring out creativity, to allow us to enjoy family and friends and to build the kinds of communities that all of human civilization is based upon. That's a bit larger than our mandate today. Today, our focus is really on California's wine industry, which.

Which is facing significant headwinds in so many different ways, many of which we will hear about reinforced today. But we changes in consumer habits, to tariffs, to workforce availability, to regulations down the line.

There are so many concurrent threats to the health and the vitality of the wine industry that we have work to do here in the state of California. Now, like Assemblymember Aguirre Curry, I represent the best and most productive wine regions in all of California. But. And so I have extreme confidence that we will figure this out.

And I know many of our partners in every aspect of the industry, from growers to vintners to workers to community leaders. Everyone is working together in order to meet the challenge. And we want to make sure today that the state of California is a critical partner. And that's because wine is our signature industry for California.

It's impossible to think about California in the world without thinking about Mickey Mouse movies, technology and wine. These are our signature industries. They contribute immensely to our economy as the wine industry does. And when I say wine industry, I mean including tourism and other industries that are associated with wine.

But wine is a major contributor to our economy statewide. It is the foundation for so many communities across the state, like the ones that the majority of Leonardo both represent, but also places from Santa Barbara to Temecula to Lodi to the Sierra Nevada, all over California.

California's wine industry is expressing itself globally and is in need of our help. But we're confident that we're going to meet this moment through a series of policy initiatives in conjunction in partnership with folks in various parts of the industry in order to succeed.

Today's hearing is focused around some of the ideas and the solutions that are out there, as well as a status report that we will be sharing with the rest of the Senate, with the rest of the Assembly and the Legislature.

And so we want to encourage folks, I know I don't have to say this, but to like to tell us the real stories. And I know there are lots of ideas not always universally shared. We want to hear them all. And we're not going to be voting on policies today. No legislation will get action today.

But today's really about learning, deepening our knowledge base so that as we take on these issues over this coming year, both in legislation and in the budget and in our oversight of state agencies that have. That have something to do with wine or with regulation, that we can be advocates.

Because when the wine industry thrives in California, California itself thrives. And we want to protect our economy, our communities. Folks who work in the industry, but also folks who live in, live in Younville or in Sisun Valley. And it's their, their little league depends on folks that are in, in the industry.

Your daughter's favorite coach, who always puts her in the game in the local soccer league, who is only there because they're, they're thriving and surviving and building and making a life for their family in the community because of the wine industry. So the stakes are high and we're ready to get moving.

So want to thank everyone again for coming. And we're going to turn directly to our first panel, which is on research and trends. And our hope today is to provide a snapshot on some of the research and the current trends and the challenges in the wine industry that'll set us up for the panels to follow.

So I'd like to, I was going to invite the panel to come forward, but I see, thankfully you're already here.

So I want to welcome Dr. Damian Wilson, the faculty Director of the Wine Business Institute at Sonoma State University, Ben Monpetit, the Marvin Sands Department Chair and professor of Viticulture and Enology at UC Davis, and Chris Bitter, the senior wine and grape analyst for Terrain. Welcome. And I believe we're starting with Dr. Wilson, is that correct?

All right, welcome and thank you for being with us today.

Thank you for that. Chair Caboldon. Good afternoon to yourself and Assembly Majority Leader Aguiar Curry of the Select Committee on the State of the Wine Industry. My name is Damien Wilson. As mentioned, I'm the faculty Director of the Wine Business Institute at Sonoma State University.

And I'm going to echo a number of the comments that you mentioned just earlier, Senator Caboldan. Firstly, that the wine industry will work its way through this.

On the challenge that we're facing at the moment, and despite the fact that things may look kind of challenging to a certain degree, we've got both the skills and the people behind us to get us out of this challenge. In your packets, you will find our briefing memo which outlines the structural changes impacting our industry.

The local wine industry is worth almost $80 billion to the Californian economy. And now putting that into perspective, it's roughly equal to the net surplus of tax revenue that the state of California contributes to the Federal Government. So losing that would be quite a loss indeed.

I'm here to talk about the recent change from the era of uninterrupted growth we enjoyed from 1993 to 202330 years of growth, which led us into the situation we find at the moment where wine production has plummeted from nearly 900 million gallons in 2017 to less than about 650 million today.

That's quite a fall in a short period of time. We are no longer in a cyclical dip. We are in a period of profound structural change. So our memo highlights three key headwinds that demand a bipartisan response. The first one is economic contraction.

Our producers are facing a triple threat of inflationary input costs, labor shortages, and a housing crisis. And as noted in our memo, these costs are squeezing margins for everyone from small family estates to our largest producers. The second challenge is the shift in consumption. We have a demand deficit more so than a supply of production.

This demand deficit has come about because of what I've termed the premiumization mirage. Because while direct to consumer prices from wineries, which is the most valuable distribution channel, rose 40% between 2021 to 2025, that's at an average currently of nearly $57 a bottle.

What that's done is effectively created a gap, or what is termed an absent welcome for Gen Zs and millennials, the new consumers who would typically be the ones we'd expect to be coming into the wine industry. We've effectively put wine in a position where we're risking pricing it out of the next generation of Californians.

And people are missing out on that joy and pleasure because the cost of entry is perceived to be too high. And that leads to the third challenge, which is the paradox of prestige. We have relied on a miseducated frontline salesforce who have primarily or for too long have promoted technical elitism over consumer accessibility.

This tail wagging the dog approach, where we're using the top end to lead the directions of the market, is quite simply unsustainable if we can't bring new consumers into the category. So what's the path forward? Well, we have a number of opportunities, and we're focusing on them specifically.

The first one is a strategic change or pivot to focus on net customer acquisition. Data and evidence from around the world across time and geography shows that 56 or five out of six brands grow successfully over time from acquiring new consumers, not just squeezing more from the ones we have or relying on loyal customers trading up.

We must instead focus on appeals that are more big, familiar and local to help rebuild our base of consumers. The second opportunity for us is the social conscience. Wines. There's a burgeoning market for wines that reflect modern values. No.

And low alcohol natural wines and biodynamic options all abound and are areas where we're seeing growth, but from a small base. And this aligns with our state's goals for health and environmental stewardship. And the third and more important option for those in business is to make evidence based decision making.

We must move from opinion based traditions to evidence based reality. As described in our memo, decisions on things such as vineyard removal or brand pivots must be backed by statistical reality, not gut feeling. So what we're doing at the Wine Business Institute is we are trying to position ourselves as the Silicon Valley of the wine world.

We're breaking academic silos. We've got feedback from the wine industry that says we don't want people who are rigidly focused on one particular area in the wine industry. They need to be more adaptable and flexible.

And so we're integrating students from computer science, Spanish, communications and gis as different majors and offering them opportunities that they can take up in wine business. This ensures that the coming workforce can handle everything from climate risk management to global digital marketing. And this will produce agile leaders. Our graduates contribute to a $400 billion global industry.

And we are training the CFOs, CEOs and CSOs who understand that a bottle of wine is a consumer packaged good with a soul requiring both technical expertise and data driven strategy. Chair Caboldan and Assembly Majority Leader Agui Arkari.

Whether the committee's priority is economic efficiency and inflation relief for small businesses or social progress and inclusive leadership, the Wine Business Institute stands ready as the laboratory for those solutions. We urge the Committee to support initiatives that bridge the gap between agricultural tradition and digital innovation.

Together, we can ensure California remains the global gold standard for the 21st century. Thank you. I yield the rest of my time to the Committee and I look forward to your commitment to your questions.

Thank you, Dr. Wilson. And you had to stumble over it a few times. You did it amazingly successfully. But just for the rest of the hearing, if you just want to say Committee Members, you don't have to say her incredibly long title and both of our incredibly long names over and over and over again just for your own convenience. But thank you. You did. You did it. You did it fabulously. But the... Definitely did. Thank you so much. Let's go up next. Doctor. Yeah.

Yes, Chair, Members of the Committee, thank you for the time. As we're already hearing today, California's wine and grape sector is a cornerstone of our economy and our rural rural communities. And we've already heard challenges and opportunities on the business aspects of how this industry needs to respond.

What I'm going to raise is another set of factors that are threatening the industry which are going to be impacting industry boom or bust. And that is the issues of that are severely challenging this industry like grapevine diseases, extreme weather, water shortages and these pressures that are being put on the industry, raising costs and challenging them.

And what I would like to point out is that the solutions to these problems are going to be extremely complex. These are problems that the industry cannot solve on their own. And the innovation that is required to solve these problems is going to take years if not decades to realize.

And as was mentioned with our partners here at Sonoma State, we're very fortunate here in the state of California to have an amazing research and education system in our CSUs and our UC systems. And I really think of that as our superpower.

So California has these world class universities that are ready to respond and can approach these problems that are threatening this industry. We are asking in large part, and I don't want to kind of spout and go on and talk about all the problems that are out there, but rather the opportunities.

And I think what we need to discuss is how the industry can partner with the state and federal partners as well to address these challenges. I'll give you a few examples. When it comes to research dollars for viticulture enology research to address these problems. There's actually no state or federally funded program to address enology research.

So that's on the production side. There are industry focused resources that help on with disease pressures for instance, or, and we can use the Pierce's disease Glassy wing sharpshooter board as an example of this. This is a industry funded effort.

They pay, for lack of a better word, taxes or tariffs on the grapes they're growing and selling within the industry to Fund this research. This effort is commendable on behalf of the industry.

It generates roughly $2 million a year for research that goes into this and is narrow in scope in terms of focusing on a single class of issues that really addresses this issue, but again is of neither of the size or the capacity to really fuel the type of research that is required.

And there's public funding mismatches all over the place. In terms we heard the numbers earlier about the economic impact of grapes.

If you look at a federal level and the investment in other crops like corn, the mismatch is quite obvious in terms of the amount of money that's going into these other crop systems, their Economic impact, if you compare it to grapes. So what I'm raising here today is obviously recognizing the challenges that this industry is in.

The industry has work to do itself to kind of fix or address some of the structural problems that are internal. Again, I go back to this. Other issues that again, are going to be here, whether the industry is booming or is, or is struggling, which are these ones that require these research solutions.

So again, what I would raise is an opportunity, an opportunity to invest in research and education as a way of fueling this industry and helping it move forward.

When you do this, you kind of, you realize two deliverables, which I think we all recognize the power of, which is one, highly educated people that are ready to enter the workforce and drive this industry forward and recognize the solutions that are needed. And of course, the knowledge that is, that is key to that.

Senator Cabaldon and you referenced already these things that we're known for in California and Silicon Valley and these other ones. Again, at the heart of that has been our UC system and our universities really driving that. So I. Yeah, we'll stop my comments there and yield the rest of the time for conversation. Thank you.

Wonderful. Thank you so much. And Mr. Bitter, close us out.

Thank you for inviting me here today. I'm Chris Bitter and I'm a wine economist. I work for a lender, American Ag Credit, that finances vineyards and wineries, as well as agriculture more broadly here in the state of California.

So my role in that capacity is to provide insights to our customers to help them make better formed business decisions. So I want to share some of those insights with you here today so that you have a better understanding, particularly the challenges that grape growers are facing in the state of California today.

So growers are facing two overarching challenges. First is that grape demand and prices are deeply depressed right now. And second is that cost to produce grapes in California have skyrocketed over the last decade. So this combination has led to severe financial pressures for growers in this state. So why are we in this situation?

And Damien already alluded to a few of the things, but I won't explain a little bit more detail for the grower perspective. So the root cause of the slump in grape demand that we've experienced is that California wine sales are declining.

So following decades of steady growth wine sales, California wine sales have fallen by about 25% since 2019. So big drop. What that means is that wineries simply need fewer grapes than they did in the past.

So this has led to a severe grape clock in 2025 Allied Grape Growers estimates that 20% of the crop was left unpicked because there was no buyer for the fruit. And over the last several years, over a million tons of fruit were left on the vine because there weren't buyers for it.

So we have a severe grape cloud. And obviously that leads to depressed places when you have more supply than demand. And it's also led to vineyard removals. So even growers that have managed to sell their fruit in recent years are struggling today because prices aren't even high enough in most cases to cover growers farming costs.

And in some areas of the state, great prices today are lower than they were 10 years ago. So we've had skyrocketing costs and we've had no growth in prices in some areas. Now, NAP is a little bit of an exception.

And when I make these generalizations, we all have to realize that the grape industry, wine industry, is highly fragmented in each different area of the states in a slightly different situation. So a lot of growers have thrown in the talent recent years.

So Allied Grape Growers also estimates that between the 2023 and 2025 harvest, more than 50,000 acres of grapes were retired in the state of California. That's a big portion. You know, that's almost 10% of grape acreage. And those removals are continuing today.

The problem with that is that there aren't a lot of viable alternative uses in a lot of areas of the state to put that land to use again. So that is a severe challenge for growers.

Vineyard values have fallen between 20%, 50% from the peak a couple of years ago in most areas of the state of California as well. So the slump in California wine sales, it's important to understand why wine sales are declining. So the slump was really driven by three main factors.

First is that US Wine consumption is declining, so wine consumption is down by 15 to 20% over the last six years. The second is that California is losing market share in the US market. So today imports represent about a third of the market. Ten years ago that was 25% per quarter.

So imports have taken share from California wineries. And then finally, exports have plummeted. So we exported just half the number of bottles in 2025 than we did 10 years ago. And trade tensions have really exacerbated that slump. In the last year, exports to our main buyer of American wine, which is Canada, have collapsed.

So rising production costs are contributing to this slump in California wine sales to some extent as well. So I want to spend a little bit of Time talking about that. So cost of reduced grapes in the state of California have risen by somewhere in the range of 50 to 100% over the last decade.

That's about twice the rate of General price inflation in the country over that time. So regulatory and compliance costs are the two kind of biggest areas that have been driving that increase. And these rising production costs have put California growers at a competitive disadvantage relative to imports. So it's a lot less expensive to produce wine and grapes.

And some other parts of the world in competing nations, particularly those in the Southern Hemisphere, there are some foreign government assistance programs that help to exacerbate that differential. And even here in the US we have some government incentives that are potentially exacerbating the cost disadvantage as well, such as the duty drawback program.

So I'm going to close by offering a couple options, things that we might be able to do to help grape growers through this challenging time right now. First of all, I would say that it would be worthwhile to review regulatory implementation and associated cost in order to potentially provide some relief on the cost front.

Second, examining trade and market conditions that are affecting competitiveness with exports could help as well. Third, you might consider transitional support mechanisms to help defray the cost of removing unneeded Vineyards. And if California wine sales keep declining, we're going to need to move more Vineyards in the future. And that can be very expensive.

Three to four to five, even higher thousand dollars an acre to remove vineyards today. And then finally, evaluating barriers to replanting grapes on land that has been fallowed.

So in many areas, if you leave the ground, if you pull the grapes and you leave the ground without planting an alternative crop, that can present challenges a couple years down the road, if you want to go back and replant grapes, grape demand rebound in terms of water, in terms of permitting things like that.

So considering some ways to address that issue could potentially help growers as well. And that's all the comments I have for today. I have in the packet. There's a little bit more detailed handout covering some of the information that I've talked about here. I look forward to your questions. .

Okay, I have a few. Thank you very much. It's getting the a business economist and enologist perspective on this has been very helpful and a lot of similar themes.

Not, not surprisingly, maybe I could ask a like a big picture question with, with respect to what several of you, a couple of you hinted at, which is that, and I think especially especially Dr. Wilson, in terms of how the industry should, should change.

And I was reading through the slides that you, that you didn't present, but the, the end, the end slide that you present to the wine industry at the end is something like be the change that you want to see in the world, or it's like a Maya Angelou quote or something like, you had to do this, which, because what you were describing is that the, you know, the industry should change in this way.

It should shift its focus here. And all of that, all of which makes makes sense. The challenge, obviously, of course, is not a unitary entity. You know, it's not a question of a single company making a decision. Here's how we'll, here's how we'll market differently. Here's how we'll train the frontline workforce differently.

Here's how we'll price different, all of those things. So I'm curious, you think, how do we, how do we get there? And this is really for all three of you, but how do we get there through.

And excuse the, the nerdiness, we get through some sort of Lamarckian evolution where existing producers in the differentiated segments change themselves towards the direct in the directions that you in particular have outlined. But all three of you hinted at.

Or is it Darwinian evolution where we should wait until we should expect that a bunch of folks will just not be the fittest and survive to the next generation because they don't make those adaptations? How do you see this actually happening, given that there isn't a.

There isn't some single entity, some single board, some single CEO to say, here's our new shift in direction. But instead, we're talking about looking at the state of California as a whole, not just Napa. We're looking at lots and lots and lots and lots of independent actors.

Across differentiated sectors within the market.

I'll start on that one. Yeah, they're looking at me, so it looks like I'll start on that one. Thank you, Chair Cabaldon, and I thank you for the question. It's actually, I don't think it's as difficult as made out. It's just making a lot of decisions. You're right. It's not a silver bullet solution.

There's not one thing we can do that we can just turn the volume up and everything will be fine. And I think that's part of the problem. There are a lot of industry, a lot of producers who are looking for something simple.

They either want an intern to run their social media campaign or they want a way to come up with a message which is going to communicate with their consumers. But I think a lot of it, you know, the phrase from Thomas Edison comes to mind.

The problem with opportunity is that most people miss it because it's dressed up in overalls and looks like hard work. And that's the problem we're facing in the wine industry. We've gone so easily in the last 30 years for the consumer who walks in lots of money, the market's growing.

You can do anything you possibly want, and you can pretty much sell wine easily. So what's the. What we've done, we've very successfully improved the reputation, prestige, and desire of California wine. It's, it's. It's up there around the world. You can. I mean, I'm from Australia. I knew about California wine before, before coming here.

It was something I was dying to try. I can't afford to buy it anymore. So it's a victim of its own success. And part of that problem is because the industry has grown so successfully. When the industry started slowing down, producers were focusing on the more profitable segments, and they're the more expensive wines.

So what we're calling the premiumization effect has effectively led producers to go for the more valuable consumers. And that's the wrong approach because we haven't made wine appealing at the entry level for consumers anymore. If you talk to anyone here, they'll tell you that they started drinking Lance's Rose or Bartles and James. Those products don't exist anymore.

And the big producers have been divesting from some of those big brands because they haven't been profitable for years. Because we, as an industry, we don't make them appealing. We talk about the pursuit at the top of the market. So it's an endemic change in culture that we need to be.

We've had the rhetoric that we've had to make wine more welcoming for decades and yet we're doing everything in the opposite by action.

So we have to produce those transitional products that, that can be produced on a scale that appeals to people and we have to welcome anyone drinking any sort of wine under any conditions, rather than telling them there is the precise way to drink this particular wine at this time with these people.

And so it involves a mixture of cultural change, innovation to create new things and using technology to communicate with those consumers where they are. And wine's not good at any of those things at the moment.

Just follow up, which is that we've heard on this panel that we're just not competitive in the eight dollar and under eight dollar bottle and under market. So how do we, and I think Bartles and James was less than that.

How do we make that shift given the global context and the competition at the lowest cost part of the market?

Well, if you think of wines from other countries, they're usually the biggest brands that stick out there. I mean from Australia you've got Yellowtail, you're thinking of Chile, you've got Concerturo Catena, from, from Argentina and the like, all these big brands stick out. The.

One of the challenges we have in number in the U.S. it's ironic that coming from Australia, where the, the concept of the tall poppy syndrome is endemic in Australian culture, where that, that sticks up, gets cut off, you tend to find that the wine industry, there's not enough of a focus on the success stories from the big producers.

You know, I mean, I, I can't remember ever talking to anyone, particularly any of my students. They come in with an expectation and no one wants to drink barefoot, no one wants to drink. 19 crimes. They look down their noses at it.

So we need to, we need to be embracing the success of those brands, what they represent and encouraging people to, to get into those. It's an open secret that, that we, that most consumers prefer sweet wine.

And yet if you ask them, they'd say dry because the wine industry has convinced them that dry wine is quality and sweet wine is something of poor taste.

So it's, we need to, we need to encourage those people and kind of highlight them who are making change, they're being successful and they make, they're, they're innovating to a degree that is attracting new consumers.

If I may just add to your question, as a microbiologist, I really like your Darwinian, you know, kind of model. Right. But I think for me and, and the conversations I'M having with the industry is most people want that playing field out there. They're willing to compete. They're willing to.

If it's a, if we remove those things that are anchoring them. And remember, the wine is a global commodity as well. So you know, if we're putting barriers in their way to compete on that global scale. So again, I can use research as an example to address some of these problems and just give you some numbers.

So something like Pierce's disease. You know, it's estimated that this is costing over $100 million a year to the, to, to our growers. And without change it's going to just keep increasing. Something like powdery mildew. 70% of all pesticides that are applied are directed at, at this, according to the numbers I have or something like grapevine viruses.

The estimated costs at the low end are about $10,000 an acre. And if you take the acreage in California at about a half a million acres, we're talking about a $5 billion problem. So yes, it should be competitive. Yes.

I think, you know, in my own opinion it should be a market where we let you know, the best companies rise to the top. But can we give them a playing field and can we help them solve some of these problems which they can't solve? Smoke impact.

You know, in 2020, the fire that caused, you know, estimated about $4 billion in economic impact. If we could, you know, that is something that they are not going to be able to address. And when it happens once in a while, you know, we, we have the research to help ensure against that.

And I have a couple of things to, to add too. So I agree with Dr. Wilson that we need to change the narrative which was developed around the baby boomers.

And it's really the baby boomers who drove that three decade long and know increase in wine consumption and they are moving out of the market and they're being replaced by younger generations that are much more diverse and have less experience with wine. And we're still have the same narrative that we had with baby boomers.

And we have to approach these younger generations a little bit differently. The cost side, you know, obviously that is one way that we can help support our, our wineries and growers is addressing the, the cost issue because it's, that's part of the problem.

But the kind of last points I want to make is that it's bigger than just we're telling the wrong story and we have high costs. Wine consumption has been declining globally now for almost a decade and a Half. So it's a broader problem. And not only is wine consumption declining, but alcohol consumption is declining now.

So if people continue to eschew alcoholic beverages, wine's going to have an upstream battle. So we have to fight everything we can do to increase wine's market share.

Share, if we have a shrinking market, is what we're going to have to do through both costs and through whatever efforts that we can do to support our industry in terms of shifting that narrative, whether it be promotional support or other things of that nature.

Can I address the health question in here?

I don't know if we're bringing up this consumption issue, and I think it's one that even if we just think about the California public to have this question in their mind of where does drinking alcohol, consumption of alcohol fall in terms of health benefits, health risks, et cetera, I think part of the challenge there is that we just don't have actually the information and the data to address them.

And I know of colleagues here in the state at UCSF that are interested in doing these studies, but they don't have the support and the funds to do it. And as scientists, what we want is just the data.

And I think with that data we can start to address some of these challenges that are out there, some of these narratives that are out there, and maybe help this question about whether consumption and some of the reasons for it and why it's declining.

And to add to your point there, if you ask folks today, many folks, what is the healthiest alcoholic beverage for you? And I honestly believe that their research shows that is wine, they'll tell you a hard seltzer because on the label it says 80 or 90 calories, no added sugar, no carbs.

It's so particularly with the younger generations, they don't understand the potential virtues of wine as part of a healthy lifestyle.

And there is research that shows that drinking alcohol and wine particularly can improve or reduce all cause mortality, which means that people who drink wine and alcoholic beverages in moderation tend to live longer than those who don't drink at all. So there's conflicting research there, and that's a really touchy subject. Individual wineries cannot make health claims.

They can't talk about that. So we need a broader kind of institution to talk about the, the, the health implications of drinking wine.

Yeah, well, and I, I appreciate the, the focus on the effect size as well that, you know, I, I, I have no idea if this is true, but it's what I tell people locally anyway, that if you are, if you choose to take the bus instead of drive for a week to go get your hard seltzer.

That's a bigger effect size than what we currently think about the difference between wine and not wine, just your all risk level for driving a car is extremely high in this state in particular. So it's a point well taken. I did want to ask you about the regulatory side.

So I had a question for you, Mr. Vitter and then shift more broadly. So you shared with us the data, I think California regulatory costs versus the world or versus the country?

Well, so I shared some figures and these are bulb estimates that costs to produce grapes have risen by somewhere between 50 and 100%. And there's a wide range because there are different ways of producing grapes, different areas. So there is no one answer to that question.

I thought after that though you said therefore are also California, the cost of producing is. Is substantially higher than it is in other countries or is that the rest of the country?

Right, so. So a couple points there. The growers, if you talk to growers, they will tell you that the two biggest components driving that increase are regulatory compliance costs and labor. And then other parts of the world that we compete with don't have the same level of regulations.

And growers are not against regulations for health and safety and things like that. They just want a level playing field. But if we look at places like Chile or Argentina or you know, other areas, particularly in the Southern hemisphere where we get a lot of cheap bulk wine, they don't have the same kind of requirements in place.

And their wine and grape production costs have not increased by nearly the same level that ours have here in California.

Yeah, understood. But part of what I'm trying to disentangle is how different are we from Oregon? It does matter because we are directly competing with Chile and with other places around the world. But some of kind of the background regulatory environment is obviously much more common across states than it is between countries.

And so I'm just curious if you have a sense of the magnitude of the difference in cost. I'm assuming because we usually are, we're more costly than Oregon as an example or other similar other wine producing states.

But by how much like how out of step how out of the norm for the United States is California in the regulatory context here?

So I don't work directly in other states. Our portfolio is focused here in California. I know our costs are higher, but I can't give you a specific percentage. But I would say that the rest of the nation is not been our primary competition.

We've lost more market share to imports as opposed to Oregon, Washington, which is the other two main commercial wine producing regions. So I'd be happy to try to do a little bit more research and get you some figures on that cost differential between California and these other states, but I don't have that.

Okay, great. No, I appreciate it.

And I mean it would be helpful because you know, the, you know, we have a set of minimum wage laws and other things that are more common across and we can't, we don't have the sort of, the unilaterally unilateral economic power to say, hey, let's just strip all those and we'll pick Chile's regulatory regime.

That's not, that's not really possible. Like we have to act within the family of states and expectations and we share common labor unions and environmental organizations and common National Farm Bureau. So it does matter sort of how we, how we stay in that land.

So I'd be really curious to see, you know, anyone that's got information that can give us some sense of how we compare to other states. Now maybe if I could switch. You were talking about our research capacity at University of California and CSU being our superpower.

And I could not agree more with respect to the industry and we wouldn't be the wine capital of the country and the world without that research power. And also appreciated your noting how under investing we are currently at the moment.

I also agree, but I wanted to kind of turn to this last question which was where also California and the EU are two of the main regulatory capitals of the world, sort of in General, whether it's on climate or food or AI or other, or other areas.

And that is, it turns out that's one of our principal competencies. Now folks at home here may not agree with that in every single way, but California is more practiced and more sophisticated on a regulatory approach than Chilean background. And I've done some work there as well, but, but also most other states.

And so I know we're, we're, I'm very interested because I represent UC Davis as the majority leader in how California can use our research capacity to, to, to, to be. To.

For breakthrough innovation in how we do regulation, how we implement regulation, how, you know, as opposed to, you know, so for today, you know, if you have to, if you're, if your winery has to get a national pollution discharge permit, we go through this whole set of procedures for that and for the Port of Cologne Water act is that both of which are from the 70s, do we have better science, better instrumentation, better tools, better ways that we could assure water quality, for example, than we might have 50 years ago.

That would perhaps impose a lower burden on the regulated community. And I'm just picking that as an example. But in virtually any domain, do you see the. Is there work already underway at UC Davis or elsewhere?

But it would normally be at UC Davis being both the food and ag capital of the academic world and also next to the state capital.

But do you see work that's happening or that's emerging or that you could imagine being, if we were to find funding for it to support really, really breakthrough, superpowered regulatory innovation as well, maybe also bring it. Dr. Wilson.

I was going to say. Sounds like I'll preamble to that one. I think the regulations, I mean, certainly as foreigner, I've come to the conclusion that you can't, you can argue all you want, you've got to deal with what you presented and then work on ways to improve the situation.

And I think with examples that you're putting in place like AB720 is opening up opportunity for wine producers. They're now looking at ways that they can expand their awareness to different parts of the market.

And certainly with SB 1273 that you're currently going to be debating, I think that from the business perspective that really gives producers a great opportunity to stemmer to promote themselves and take more control of what they're doing. So we can see that the regulations are changing.

With regard to the meta research, I'm always fascinated how little I perceive that there's money going into the business side of the research. There's a lot that goes into technical side and is very worthy. But I.

You'll find that particularly with wine producers, if you're, if you ask them about ways that they can work on generating demand, they're very scarce with their. With the money that goes into that. Whereas if they need new French oak, they'll cut a check in a heartbeat.

So I think one of the ways that we can work on improving that. I am absolutely fascinated and impressed by how much how many benefactors there are wanting to put money into research in this part of the world. There are sources of research funding. The challenge is being able to access it as researchers.

And typically red tape can often get in the way of those things. So I would encourage anything that you can do that can help facilitate the investment from the industry, particularly with the individual donors, to help Fund that, because that's one way we can get through it. And Ben, you probably want to add

to that No, I think, obviously my answer, you're probably going to guess what it is. There is a tremendous amount of capacity for us to generate, you know, these solutions, make, you know, more methodologies, technologies, approaches that are going to make the industry more efficient. But it needs that investment in it to, to make, to.

To realize that we've been very fortunate at UC Davis to have industry invest in us for a long time. I'll use our teaching and research winery as an example. That building was built with about $20 million of philanthropy from, from the industry. We consider that one of the most advanced technologically and sustainable wineries in the world.

So if people want to learn about water, you know, I invite people to come there. We have some of the, you know, most advanced systems around in terms of water conservation, etc. So we have an example of how it can work. It's just. There's no better way to put it.

It's been scratching and clawing for this, and it's really been the industry that's fueled it and not state and federal monies that have done it because we work on a product that contains alcohol. And that's. And that's always been the challenge for us. So we invite that and would love to be able to tackle these problems together.

All right. Yeah. I want to underscore, because as we start the conversation about this particular talk, what I'm talking about is research that can help redesign the way that regulations are crafted, how they're implemented, the. The instruments by which we detect, you know, things and what have you. So.

And we're doing that in several of the food and ag sectors and, and what have you. So. So. But wine, a lot of our research has to, you know, for the last century has been focused on, on how to improve production, how to fight disease and how to reduce environmental impacts, all of which are critical.

They're critical foundations for the conversation about regulations. But the reg. The science of regulation itself and compliance and everything else, and the cost of the efficiency of regulations really has been an under, in my view, an under researched area.

And it's one where we have a unique capacity in California at both universities, but particularly, particularly Lucy Davis. Majority Leader Aguiar-Curry.

Like Senators, the fact that we run these regulatory rules for whether it's AG or whatever, we don't go back to check to see if they're working.

And that's why I get frustrated for all of you is that, you know, we ask you to do these rules and regulations and there's a cost associated with it, but there's some of those rules and regulations that are obsolete, and we continue to go down that road. We have to follow those rules and regulations.

Maybe we don't need to. So I think there's an opportunity for us to actually investigate a little bit more about what's working, what's not working, and some of the rules that we're done and as well as with implementation are the rules and regulations that we have fought forward, were they implementable at all? So thank you.

You're here. All right. I want to say thank you to the panel. Extremely provocative and insightful. Really appreciate both the materials, your present and the discussion that we've had and look forward to continuing to learn together with you and then translate some of those learnings into action.

Thank you so much. Thank you, Mr. Mark.

Thank you for the opportunity. All right, we're going to turn next to panel two, which is on insights from the California wine and grape growing industry, where we hope to hear an update on wine and wine grape production, talk about current trends, and review possible steps forward. I want to invite our panel to come forward.

Michael Miller, the Director of government relations for the California association of Wine Grape Growers, Honor Comfort, the vice President of International Marketing for the Wine Institute, and Jaylisa Tamayo, board President for the Family Winemakers of California, is there coming forward.

I just, I neglected to introduce both Aaron Skaggs and Nicole Cuellar Nelson, who have been on our staff and supporting the work of the Committee. But even more importantly, Sergio, who is keeping time.

So as you're paying attention to the Committee for the Questions, glance at him once in a while just to make sure that we're on time. We've had no problems yet, but just want to make sure folks know that's what he's. And thank you. Thank you all for your support and your work today.

All right, so let's begin with the panel. Mr. Miller, are you first up?

I believe so. Okay. 20 minutes, right? I'm joking.

Thank you very much. Chair Members, I'm Michael Miller with the California Association of Wine Grape Growers. Thank you for holding this important hearing. And thank you, Aguiar-Curry, for joining us. I know that as I talk about farmers, this will relate to you as a farmer yourself, and I appreciate your comments and feedback today.

If you speak with the average grower, they will tell you that farming grapes has always involved risk. A successful season depends on avoiding frost, disease, pressure, extreme heat, wildfire, smoke, and a long list of potential perils. Growing wine is, at a minimum, a risky endeavor.

But today, growers are Facing something that is very different, Growers can experience a near perfect growing season, produce exceptional fruit, and there's nobody there to buy their grapes. And so what happens then is in some cases, grapes are harvested and dropped literally on the ground in the vineyard because there's simply no market for those grapes.

The situation is costing growers hundreds of millions of dollars a year. Where the industry finds itself today feels much more, much greater than an industry correction. This is a historic problem in the industry. Growers are struggling simply to stay in business, and far too many are being forced to exit the industry entirely.

If you're looking for a canary in the coal mine, look at the Salinas Valley. The Monterey County Vintners and Growers association, which represents the growers in the region's wineries. They laid off all their staff and effectively closed down.

In a region with more than 250 years of wine growing history, the Central Coast news outlets have been reporting repeatedly on wineries and growers who've gone out of business in the last few years. And that's not a unique story to that area. It's happening all over California. As growers look ahead, they're basically focused on two simple goals.

First, they just want to weather the storm. They want to get through this crisis and come out the other side.

Secondly, they want to emerge from it in a place where you have a sustain, where they are sustainable in a global market, and we're having a regulatory structure in place that recognizes that they are competing in that global market. Right now, the industry is undergoing a painful process of bringing supply and demand back into balance.

In 2022, California had approximately 615,000 acres of wine grapes planted statewide. In August of 25, that number was estimated to be closer to 477,000. To understand the scale of what the growers are experiencing, it helps to look at just a few key Data points.

Since 2023, nearly 100,000 acres of Vineyards have been removed, with a call for another 40 to 50,000 in 2025. In 2024, harvest was 2.9 million tons of grapes. That was the lowest harvest in 20 years. The 2025 harvest numbers are coming out tomorrow. It's estimated to be right now around 2.4 million tons.

That will be the lowest harvest in 30 years. Over the past three years, at least 1.3 million tons of grapes have gone unharvested because there was no buyer. That represents more than $1.3 billion in lost farm revenue, or roughly 433 million per year. To put that data into perspective.

That loss is roughly the equivalent nearly 1 billion bottles of California wine. That's wine that's not bottled, not sold, not toasted, not anything. Those numbers reflect a massive effort by growers to reduce supply and restore balance to the market. But moving vineyards is not a simple Removing vineyards is not a simple or inexpensive process.

There are significant costs associated with taking out a vineyard. Once vineyards are removed, growers must then determine how to dispose of the material. Burning is not often a feasible option due to air quality restrictions, markets for chipping and mulching are limited, and composting can be extremely costly.

As a result, some growers simply cannot afford to remove the vineyard at all, and instead they abandoned them. Those abandoned Vineyards create serious risk for that vineyard and the entire region with pest and disease and other perils. Even when Vineyards are successfully removed, the future of that land becomes uncertain.

If the land sits fallow for too long, it may lose its agricultural designation. What that means is that replanting in that same land is incredibly expensive due to federal, state and local permitting processes, and in many cases it's uncertain whether they could even get the permit.

To better understand things, COG partnered with the Allied Grape Growers and several regional organizations to commission a statewide vineyard acreage report from LandIQ. This work is helping our growers figure out what the situation looks like, how to make informed decisions down the road.

Even if growers successfully navigate this difficult market cycle, they will still face the challenge of competing in one of the most highly regulated agricultural environments in the world. And you asked for examples earlier. I do have some examples. I can get that in the Q and A if you'd like.

Growing gaps in growing grapes in California means operating under conditions that most global competitors do not face. For example, foreign governments often subsidize wine production, allowing those wines to be exported to the United States at a lower cost.

At the same time, large volumes of imported bulk wine continue entering the US Putting downward pressure on demand for California grown grapes. Some precision viticulture technologies that are used by growers in other states around the world are considered safer workers and beneficial to the environment, yet they are restricted in California.

As a result, California growers face higher production costs for their domestic product wine. Water availability remains one of the most significant challenges facing agriculture, yet current policies make it difficult for growers to invest in groundwater recharge or small scale water storage that can help prepare for dark conditions.

When states such as New York and Oregon adopted an agricultural overtime requirement, they paired those policies with tax credits that help farmers pay those wages. California did not do that. Instead, growers were left to absorb those costs while continuing to compete in a global market.

That flawed policy has reduced the take home pay for our workers, causing them to get second and third jobs. Finally, we need to remind consumers that wine is an agricultural product. In California, we grow wine. Strengthening the connection between consumers, local wineries and the farmers who grow the grapes is essential to sustaining this industry.

Efforts that reinforce farm to fork and bind to glass that connection that helps to support California wine. And we appreciate Senator Laird has legislation that's pending on that very issue. Terms of Members I appreciate the opportunity to give this very brief overview of what is a very complex situation.

But if you drive through California's vine regions today, you can see the crisis unfolding as you drive by the Vineyards. Vineyards are waiting to be pruned, fruit still hanging on the vines, entire vineyard blocks being pulled out of the ground.

Behind every one of those Vineyards is a family, it's a farm family trying to decide whether they can continue farming for one more year. Thank you for the opportunity and I'm available to answer any questions you may have.

Our discomfort

I'm honored Vice President of International Marketing with Quatt Institute so much for inviting me to be here today.

I am going to shift the tone a little bit my comments and rather than continue to focus on the problems that are significant a number of different perspectives on I'd like to talk about one of the solutions project that we put together at winest.

The problem that we chose to focus on was I've heard repeatedly this afternoon is declining and specifically with baby boomers which were traditionally the core of the wine market as they aged out wine wine consumption, the millennial sector. While they are engaged, they are a much smaller demographic cohort.

So our focus is on the emerging the younger millennials, Generation Z those that are above legal drinking. Why we're not aging with them General, the relationship with alcohol is changing at their approach. While this cohort does have a positive image of wine, that wine is not relevant, it's not salient in their world.

Don't see it as a part of their daily life. They don't see it as part of their life. Yet this 25 to 45 year old audience relates the world and each other fundamentally differently than any prior demographic cohort. They're in large part to this in the way that they engage with the world through their digital devices.

As a result, wine as a sector needs to adapt. We need something where they are. We need to engage with them and build a relief with them, show up where they are, where they spend their time, what they watch, who they follow, understand what they're interested in.

So, solution Together we chose to dig in and better understand this problem. First thing we did was conduct our own proprietary research with Wine Institute and we worked with experts from outside of the wine industry to better understand these consumer.

Through this process we gained access to new information, significant insights, best practices on how to connect these consumers and great material that we are putting to work within our own communications. However, going through the through this process, we realized that the information that we were gaining was too good not to share.

But the broader winding we recognize that wine overall and collectively needs to level up its marketing and its community to rethink how we approach and engage today's consumer.

So in order to help us do this collectively, we created an online platform to share all of the expert insights, the marketing strategies, the best practices with the wine community and make it open access for all. This is the Chair Wine Collaboration which is currently up and running and available on the Wine Institute website.

Think of this as a marketing masterclass for winemakes park think tank, Park Test Kitchen. The Share Wine collab is at its heart collaborating by design.

We call it the collab partly as the play on the term collab, meaning a collaborative exercise that comes greater than the sum of its parts with everyone bringing, but but even more importantly because we see it as a community laboratory where the wine community can come together to learn, to test, to share the ideas that are working as we all learn together to improve how we connect and engage.

It's an online hub. It's built on a series of in depth webinars that are where we share strategy, research, thinking and execution to better understand this audience and how to reach them. Materials are available, we have case studies, tools and resources and it's all presented evenly and accessibly to the wine community as a whole.

We're offering what we call office hours. These are live online sessions that we hold regularly to dig a little bit deeper and to help bring people along within their own marketing Expertise. We're hosting one tomorrow at 11am you're interested, welcome you to come join us.

So and finally, we're also doing collab live events, partnering with regional organizations to be in front of their Members, their winery and grower partners to help walk them through some of the background information, the insights and how they can learn to apply these. So why is this not a campaign?

This is built on the whole notion of teach a person to fish and they will be able to better market their own brand much more effectively, tell their stories, be authentic, be better and more marketing approaches it's data driven and research based.

It's performed by experts from outside of the wine of the wine community that are bringing their own experience marketing agencies actionable. It's built on best practices and how tos. It's designed to help support wineries and winery staff from those that are two person enterprise to the most sophisticated have their own marketing and consumer insights.

It offers access to information that most wineries cannot get or do not have access to it. We're making broadly available. The goal is to help this sector as a whole become more strategic, informed and raise the bar. Recognize that this is an evolutionary challenge and as a result we designed this to be evolving and flexible dynamics.

So what are the results? To date we have more than 500 people that have signed up to register to participate in Share Wine. We're hosting live events. As I said, we presented at the recent DTC conference in January at Monterey, presenting at Paso Robles next month and working with our other partners in other parts of California.

The biggest challenge is getting the work out. That's what we're constantly working on and building engagement with them. Ongoing problem. However, we're focused on investing in positive collaborative change. Actionable solutions or wine response.

Thank you Mr. Mile. It.

That same here the novice complex. Shifts in climb. But the heaviest way. For 2 to 5 close Matt. Fasting when to manage automobile expansion quality mobile or proteins. Safe. Wineries are forced to help. Rural landowner helping some travel fight these challenges.

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All right thank you. Thanks for the entire panel.

There's a lot there and I know we both have we both have a lot of questions I wanted to start with with no actually with honors comments because the you know, we we talk a lot about some of the generational challenges and I think we we think we know or we're trying to understand and are finding easy answers for for the consumption patterns of younger younger consumers.

We both the majority leader used to be mayors of our own communities and there's a point at which we were being asked to only zone for housing that had no parking at all, that we didn't really need roads anymore. And the reason was because the evidence was very clear. Millennials were not driving. They didn't want cars.

They had no plans on ever having any children. And so we needed to change our house, so we needed to change and now they all they intended to spend the rest of their lives living above a dance club. And it sounds ridiculous now, but it was really it was absolutely true.

And developers came to us and said don't make us put parking in and whatever because this is the here are the facts. But of course, that was the trap that we always follow into in generational analysis.

We forget that folks are in any generation when they're 17, are more like other generations at 17 than they are like themselves at 40. And that is that is a fact of life.

So if we had done those things back then, if we had made substantial permanent policy changes, those same millennials now want the same mostly the same things that their Gen X predecessors wanted with some changes, but mostly the same.

And most of the predictions and the market signals that we were seeing back then turned out to be the signals were louder than the actual trend was happening.

The other thing that this reminds me of is, you know, at least among a certain but large demographic of younger Gen Z boys we've talked about, our strategy should be we just need to focus on making sure everything is inexpensive and what have you because none of they don't want they don't want status symbols and they don't want to and they don't have any money to spend.

But for a certain demographic that's large of younger Gen Z boys it's almost impossible to not have a conversation about extremely expensive men's colognes. And where many teens are, they will talk about colognes of 4 or 5 or 6 or 700, $700 an ounce with more sophistication than the best sommeliers here in Napa.

And it's just a reminder that, you know, that was totally unpredictable, Mark. Cologne was out for the, for the, for the generation before them. And certainly anything that was $600 was just not. We.

No one would have guessed that that would become such a trend and have such an important impact on the economics of that, even that industry.

So, so I appreciate the, the focus of not just like, let's find the answers, but let's keep finding the answers and let's look for when the moment, you know, when some surprising moment happens or lightning or an influencer strikes, that these trends are, they are not. They don't come from the Bible.

They don't come from 500 years of international panel on Climate Change data. They are mutable and we simply have to be. The industry has to be ready to take advantage of them because you'd be foolish over the course of human history to bet against wine. And so we need to continue to focus on that.

So I really appreciated the Warren Institute's comments in that regard. I also wanted to just know, we've talked about Canada here and I think it's a good morning for us. And I don't want to be mean and I'm not going to say any names, but that didn't just happen.

I mean, a lot of folks in our state and in the sector called for substantial tariffs. And I just want to be blunt, it was reckless, it was extremely reckless to call for a massive set of tariffs without knowing what was going to happen. And what happened was we lost our most significant export market.

And so quick, quick, radical, simplistic solutions are bad in Sacramento. We certainly both know that, because that's most of what we see that we have to vote no on most of the time. But we have to be cautious as we are being bold in the answers.

And that is a powerful example of what happens when we get carried away honestly and forget about the potential repercussions of the actions that we're called for. So we have to fix that. Canada, as you're right to say, it's an incredibly high priority for us to fix.

But then we need to understand that as the fourth largest economy in the world, when we make calls for international trade changes and what have you, sometimes we get what we want. And so we better be sure that what we want is going to produce the outcomes that we want to see as well.

And then I love this one drop five permits issue. And it connects to the conversation we were having with UC Davis as well about how to, like, how do we avoid that.

This Committee and former Senate President Pro Tem Mcguire did a lot of work last year on the, on the small winery or with the State Board and with the Northwest Regional Board, because it is, you know, I formerly served on a regional water quality control board before I was in the Senate in a different region.

And they're under very extreme expectations from both the state and the Federal Government. But that small winery order can't be complied with. It's just not possible on a systemic basis. I mean, the industry and family winemakers in particular, but different geographies in California, it's impossible to comply with it in that way.

And so while we will later on hear about some of the progress in that work, and in case you leave early, I want to thank the North Coast Regional Board and the Seaboard for collaborating with us and with family winemakers and others to continue to make that better. But it's not really about that specifically.

It's just that our regulatory approaches are off. They are often outdated. They are, as the majority leader said, they are often oversized, as mentioned, and they are often based on avoiding compliance risk and therefore over way overdoing them, or a consultant community that develop expertise in the coolest, most expensive solutions that then become expected by the regulators.

So we have to get a handle not just on one regulation, but the overall way in which we write regulations, we implement them, and then we, as the majority leaders go back and not 20 years later, I keep going back, is this working? Is it getting the results we have?

And by the way, are we already collecting the data that we could, we could have you not come to the regional water board office because we've already gotten that same data four times before. Can we use that data better?

And can we develop more instruments, even just regular sensory instruments, in order to allow us to really look at the outcomes and not just at the like, how much are you spending enough money to comply?

But let's really just monitor the outcomes and the unique so that we can see past the unique geography to really, you know, is there an impact on water quality from Vineyards and from wineries as well? We haven't done a good job on that.

So very much appreciate the whole panel's identification of the range of problems, but also the range of opportunities that are before us and turn the majority leader quick.

Like one of the challenges that we have is educating our colleagues. And every year we rotate through a group of new people. Every year we need to continually educate them. And we have new sponsors or people in outreach that come to see us. And everybody has their own opinion.

And we unfortunately have a lot of people that don't understand the industry. I've spent more time being an educator and when I see the new group coming through, we try to get them out to the field, give them tours, have the rural stand.

So the challenge is for all of us to keep on top of my colleagues as well. And it's to show up when you can to community hearings, advice, to advocacy days. Tell the story. And I would really appreciate those stories being told to our urban areas because as you know, that's where the boats are.

And so we represent rural areas and we only have a couple boats in Northern California. But if you go to our urban areas, that's where the boats are coming from. So I just want to you know that I've mixed all of you many times before and will continue to do that.

But there is a frustration that I know and attend the consequences. Just keep raising it like we had all the time. So let's get it down to one drop of water with maybe three regulatory, I don't know. But anyway, I want to thank you all for being here.

I'm going to have to step away soon, but I am always available. I appreciate already being here today. I have my grandchildren are flying in boat. I'm so excited. I can't stand it. But anyway, thank you everyone.

There's no better time to introduce them to wine.

Gotta start early.

Okay, thanks so much to the panel. Very, very much appreciate your participation today and your continued leadership and problem solving approaches because as the majority leaders says, there isn't, there isn't quite yet a wine majority in the Legislature.

Although everyone loves it, not everybody understands how challenging it can be to and you know, I Chair the new technology and Privacy Committee in the Senate where everybody celebrates what great risk takers they are and all of that, as Mr. Miller said at the beginning, really no one, no one takes more risks every single year.

You know, the Silicon Valley startups and entrepreneurs think they're putting it all online, but no one does that more than ag, and particularly grape growers in particular and the wineries that they support.

And so just very much appreciate your continued engagement with us today and then throughout the year and policy and regulation to make sure that we are doing the least amount of harm and being as helpful as we can to make sure that California's premier industry thrives. Thank you so much for joining us.

And we're going to turn next to panel three. And again thanks to the majority leader for joining us. And just to reinforce she's not walking out on anyone. She's a. Yes.

Thank you very much. Thank you. And as our, our panels come over, I did also want to note, and I'm sure this is dangerous because there's some folks that we are, we are here in, in Napa cavity today, which some people in California associate with wine appropriately.

So I just want to acknowledge in addition to the, to our panels that the, the leaders of the Napa Chamber of Commerce and Supervisor Ann Cottrell from the Board of Supervisors, the Napa Valley Vintners, that they're. That Napa, you know, I'm a partisan.

Napa is the, is the, is the beating heart of the wine industry in California and has thought carefully and hard and then taking action on these issues. So appreciate everyone that's that's here with us today. And let's turn to our panel beginning with Linsey Gallagher, the CEO of Visit Napa Valley.

Then we'll hear from Sonya DeLuca from the Napa Valley Farmworker foundation and finish up with Annalisa Kihara from the State Water Board. Thank you for joining us.

Good afternoon. Thank you for this opportunity. I'm fresh off a flight from San Diego where I was attending the Visit California Outlook Forum, the annual conference for tourism in the state of California. And in full disclosure, for 10 years prior to being in this role, I was with the California Wine Institute in honors job.

So I have a long history with international marketing of California wine. And I now have the privilege and the pleasure to market Napa Valley as a destination on the world stage as part of the California dream and the work that Visit California does at a statewide level.

But it goes without saying visitors are coming here to Napa Valley because of the world class wine and the incredible agricultural community and product that we produce here. And so the challenges in the wine industry are being felt also on the tourism side of things. And the impacts of the international trade situation right now are not.

The tourism industry is not immune to that either. The theme of the last two days at the statewide Outlook Conference was the impact to the Golden State of those visitors from Canada not coming here as great numbers as they once did. And how do we prepare to welcome them back when they're ready to come here again?

So just wanted to add that piece of the puzzle into the mix here. But I appreciate the opportunity this afternoon to talk about visitation to Napa Valley and how that impacts our community here.

And I'm happy to share that we are currently still outperforming other destinations in terms of the lodging metrics and the people who come here to stay overnight in Napa Valley and experience what our wineries are offering, as well as our restaurants and our outdoor attractions and our wellness offerings and music and all sorts of other things that they're coming to the Napa Valley for.

But we did outperform the rest of the state and. And much of the nation in terms of hotel occupancy. Last year, we were up 3% in the number of visitors who came and stayed overnight in a hotel, and our hotel rates remained flat last year.

And that is probably counter to a narrative that we're hearing and reading about in the media.

But I did want to share, you know, that is really good news for Napa Valley and good news in terms of those consumers and visitors coming to this valley to connect with this, with the community here, to support our quality of life and to, you know, partake in the wine that this valley does such a wonderful job of producing.

With that being said, the work that we do in the destination marketing organization, we are charged with inspiring visitors to come to the Napa Valley, and I will share that a lot of that work is now shifting into things in addition to wine. We will always be a wine destination. We will always be a luxury destination.

We have some of the nicest resorts in the world here in the Napa Valley, and we're very happy about that. But at the same time, it's important that we appear to show a diversity of experience that people can have here in the Napa Valley, whether that's leaning in a little bit more to cuisine and our culinary offering.

A lot of conversations this week down in San Diego were around building the culinary platform for California. California and Napa Valley, of course, has been part of that farm to fork movement before it was a tagline and a saying, so lots to be optimistic about there. We were also a wellness destination before we were a wine destination.

And this. This destination had the railroad built from San Francisco to come to the northern part of the valley up in Calistoga in the mid-1800s because of the healing waters and the wellness offering that was there. So we are finding ourselves in a situation where we're always going to be leading with wine.

We need to be more expansive in that Message shifting a little bit closer to home. Here in the Napa valley, we are a community of around 130,000 residents. We welcome 3.7 million visitors into this destination every year. So that's everyone here putting out that welcome map for visitors from around the world.

Typically, we have 20% of those are international visitors. That's down below 5% now. And so we've had to, in order to, you know, continue to have a thriving visitor economy, we have to look for those visitors closer to home, either here in the state of California or here in the United States.

Those visitors spend two and a half billion dollars annually in Napa Valley, and 70% of that spending comes from our overnight hotel guests. So the work that we do at the destination marketing organization is to inspire people to stay in a hotel so that they will have more time to experience things in our destination.

We want them to stay longer and spend more money. And when that tourism economy is functioning well, we contribute. Those visitors contribute 108,000, $108 million a year in tax revenue into this community that supports 16,000 jobs. And that's $7 million a day that those visitors are spending here in the valley.

They also leave behind several important revenue streams from a tax and an assessment standpoint that really fuel the quality of life of our residents. One is a transient occupancy tax, which goes to each city or the county here and can represent somewhere between 20 and 80% of the General Fund budget in those towns.

Going coming from visitors who hotels and also the tourism improvement district. Revenue that we get from those overnight guests allows us to do the marketing to more guests to encourage them to come into the valley. So we are. We exist and succeed from the tourism side because of the work that's being done in the wine industry.

And we are here to preserve and protect all of that so that we can continue to welcome visitors from around the world and have that benefit our resident quality of life here in Napa Valley.

Thank you, Linsey. Thank you. And before we turn to Sonya, maybe I can follow, because we're going to be talking about more distinct topics this time than we were in our prior panels. Just for a quick follow up, I'm glad that you just came from that conference. Can you give us any sense?

I mean, clearly Napa is the top of the game among all of the peer parts of California. But for Santa Barbara, for Temecula, for other wine parts of California are. How are they grappling to the extent that, you know, with some of these, some of these challenges and are There insights for. For them.

The other Members of the Committee will be reviewing the hearing and I want to help as they see that. So they don't necessarily are. Are led to believe that there are. There is good office Napa and as good off. I mean by meaning they have you and your team leading this work.

But what do we, what do you know about this, the state of the tourism industry related to wine in the rest of the state?

If you, if you can share anything, that's where we have the advantage of outperforming here in Napa Valley. And it's not great. You know, we certainly are faring better than most. And as I heard many times at the conference this week, flat is the new up. So for us to be up is.

But it's not, you know, the numbers I think that many of our hospitality community would like to see. So I think, you know, when I mentioned I was leaving the board meeting early today to come here, several of my colleagues in the wine regions asked me to convey that they too are experiencing challenges.

They too are worried about the impact, the economic impact on their destinations, not only on the wine side, but for potential reduced visitation. And I think what Napa Valley has, you know, we're very fortunate to have many things in addition to wine to encourage people to come here.

We're trying to present wine as part of a healthy lifestyle. We are, you know, really trying to get people to understand that we have the Napa Valley Vine Trail, which is going to be a 47 mile asset where you can bike through the entire valley and enjoy wine and be in the outdoors.

Those elements of our product are important to emphasize. And I think that we have, we have the benefit of having more of that than other regions do. So I think that they are even more anxious than we are. That as goes the wine industry in their region, so goes the hospitality side of things.

So we, you know, we love to be a leader, we love to be a good example, but I think there's cause for all of us to be nervous. And at the same time, here in Napa Valley, this community comes together like no other.

From an agriculture, from a marketing, from a community standpoint, that's when we're able to pull ahead and outperform. And I think that we appreciate being an example to other regions in that regard.

Terrific. Thank you, Sonya. Welcome.

Sonya DeLuca. Thank you.

I'm the Executive Director and CEO and I want to start by just saying that behind, you know, every bottle of Napa Valley wine is a farm worker whose skill, dedication and family support make it possible. And when they struggle, the impact is felt across our entire community. Our organization has supported farm workers through education.

Over 33,000 farmworkers in total over the last 15 years and about 3,000 people annually. High quality training programs focused in viticulture and seed. That these programs strengthen the agricultural workforce here, resulting in increased wages. Also help develop the next generation. None of these opportunities exist out of thriving wine and grape industry.

California loses roughly 50,000 acres of farmland every year. And in a region like Napa Valley, where agriculture defines our landscape and art, protecting farmland means protecting the workers and the families. Our agricultural workforce is concentrated.

Sonia, would you mind moving the microphone a little closer because I know your your testimony.

Oh, there we go.

It's going to be my on most watched. Sorry.

Okay. Can you hear me now? I don't have to start over, do I? Our ag workforce here is concentrated with 9,000 to 11,000 farmworkers, most of whom are Latino immigrants. They constitute just 5% of our total workforce, but are vital to 99% of the gross agricultural production in our valley.

So when the wine industry struggles, our farm worker families are the first to feel that impact. Over the past 20 years, our workforce has shifted from mostly migrant labor to a year round permanent workforce of families rooted in our community.

Farm workers are not only the heart and soul of our industry, but they're integral to the strength and prosperity of our community at large. The value proposition of agriculture being the highest and best use of the land here in Napa Valley has been critical to our region's success since 1968.

However, what happens when economic pressures from declining wine sales to rising farming and production costs, along with global trade uncertainty, make it increasingly difficult for growth growers and wineries to remain profitable. The result of that is a negative trickle down to the workforce and our community at large.

When growers are struggling to barely hang on, they must look at their budgets and make hard choices. Labor is often the largest expense and the biggest line item. So when growers are forced to make those difficult financial decisions, hours are reduced, layoffs occur and training programs are paused.

This results in lower take home pay and added stress for hard working farmworker families. This is compounded by California's overtime laws that have also limited available work hours, further reducing income for many. For some farm worker families, this can be the difference between paying rent or falling behind.

As with other ag regions, Napa Valley faces ongoing labor shortages. So retaining skilled vineyard workers to farm our premium specialty crop is critical. Fewer hours and fewer opportunities for advancement push farmworkers to seek second jobs or leave the industry entirely. Losing these highly trained workers threaten vineyard quality.

They increase production cost and accelerate mechanization in a region built on skilled hands and careful craftsmanship. This further threatens the economic viability of Napa Valley's billion dollar industry. These issues also compound existing community challenges related to affordable housing, health care, immigration, and overall economic vi concerns that we unfortunately don't have time to address today.

We have built here in Napa Valley through the farmworker foundation, A very unique model not only in California, but anywhere in the world. Farmworkers are respected, valued partners who work side by side with growers to sustain Napa Valley's globally recognized reputation for quality. Our agricultural wages are among the highest in the nation.

So if farmworkers here are experiencing challenges in the Napa Valley, those challenges are felt even greater across the state of California. So moving forward, supporting farmworker families will require thoughtful action. And we would encourage the state to consider a few different ways to do that. One, providing targeted relief for growers facing severe market pressures.

Two, removing barriers to wine and grape sales. Three, exploring wage loss support programs for agricultural workers who are experiencing less take home pay on an annual basis. And also continuing to invest in bilingual workforce training and education through organizations like ours and others across the state. Investing in a skilled agricultural workforce is essential to California's future.

This investment strengthens families and employers. It supports higher wages and stability for growers, bolsters California's wine economy, and advances a more equitable workforce for immigrant workers across the state. We believe that California has the opportunity to lead the way in this regard.

So thank you for the opportunity to be here and share our perspectives and I'm happy to answer any questions you might have.

Thank you very much. And the majority leader Aguiar-Curry, wanted me to emphasize that how supportive she is in this way. She is carrying legislation this session that I know many of you are aware of in conjunction with Napa county on farm worker housing and services, and I'm a co author with her. And we also have in the.

In the statewide housing bond which I'm carrying for a billion dollars, the largest allocation ever for farm worker housing and this as well. So it's a critical, critical, critical, critical issue for a lot of the reasons that you said you didn't have time to talk about, which was housing affordability. In particular.

But the health of the industry is obviously critical too. You know, just, you know, over in virtually every conversation I have with growers and sometimes vintners, but, but mostly growers, the topic of, of automation, autonomous, you know, tractors and what have you comes up.

And obviously there, you know, they're, there's interest in the deployment of more of these technologies in order to deal with costs and productivity and what have you.

And the challenge, the challenge I think that's been, that's present in state law is that we're not interested in destroying work opportunities and the careers and the livelihoods of farm workers.

But we've also heard from several, from lots and lots of growers that look, we're, we're like, we're, we're on the margin, we are on the edge of existing or not existing.

And if we can't deploy some of these technologies that exist elsewhere, then we will be laying off far more farm workers because we were no longer in business. Can you give us any insight or thoughts about that?

This question about when, how much under what conditions we might think about increased use of or authorizing increased use of technologies in Vineyards?

Yeah, I think we talk a lot here about innovation and technology. So there are certain things specifically in a, in a high end wine region like Napa Valley where a skilled hand is much better than a machine. But there are a lot of technologies that can be used for, you know, tracking weather, pest and disease pressures.

You know, there are, are certain vineyards here that have, that are fully automated. Every, every grapevine can be seen from an Ipad. And so I think there's a couple of different things that happen or that need to happen when those technologies and innovations are introduced to the vineyard.

One, there needs to be some upskilling and training and education. Two, I do think it will help mitigate some of the labor shortages that we are seeing. And certainly an aging workforce is another asp that as well. I don't think that there's any of our sort of cultural practices that require that skill that would technology could replace.

But there are certain things that we can do. For example, going through and doing a pre prune mechanical hedge prior to that certainly saves labor hours. And so looking at any of those ways that could create efficiencies by saving labor hours each year are certainly things that we're looking at here in various aspects throughout the season.

Do the, and I've been to, you know, several, several sites where folks were sort of giving up back breaking work and taking on remote operation, drone, drone operation.

What have you do are what is the state or the capacity of upskilling programs and other things that would, you know, if a legal change made it more possible to deploy some of these technologies.

How ready is the is the workforce development system both on, you know, on site and in the community to how ready is it to make that promise real here?

We're ready. So the nice part about Napa, which I think is similar in other regions but maybe not quite as robust, is our model is grower supported, farm worker driven. So most of the programs, probably 95% of the programs that we offer throughout the year are during the workday and employers are paying their employees to go.

And so those are, you know, skill building, canopy management, pruning, you know, those types of things in the vineyard, but also leadership, management literacy, computer literacy, financial literacy, all across the board. Growers here are investing in the workforce in ways that other regions aren't.

And we are ready at the first site and if we had resources and the people to help with that bilingual education to implement those tomorrow, if we could.

Perfect.

Yeah.

All right, thank you. And next, and finally we're going to turn to Annalisa Kihara, the, the assistant Deputy Director of the Division of Water Quality at the State Water Board.

And you know, we, we invited, we invited Assistant Deputy Director Kihara today really to celebrate probably a little strong but, but to, for, for a status report on where we are with respect to the, some of, some of the, the, the, the small winery order in particular, but for the purpose of, of also describing how we've gotten here and the collaboration, the progress, the enduring have anywhere there might be possibilities and lessons learned here that might speak to some of the broader concerns that we've heard through the rest of the hearing.

So thank you so much for joining us.

Thank you Chair Cabaldon and I appreciate that. Tee up. And just kind of recognizing that I'm the regulatory representative here today, just wanted to make sure that you know that I'm going to be providing background and an update on our winery general order.

But I do hope that I'll also be conveying that we at the water boards recognize that there are a lot of challenges and that we are expressing our willingness to consider what potential opportunities there are and what solutions are at the table.

As you had mentioned, my colleagues at the San Francisco Bay as well as the North Coast Regional Water Quality Control Boards could not join me today, but they do send their regards.

And then I also just wanted to say I really appreciate the opportunity to be here from the very beginning of this Committee and to hear about just the opportunities and the challenges and just the different aspects of winery and winery production as a whole, wanted to share that gratitude. So I'll just start off with some background.

Wine making, as many of us have said, and many of you have said on the previous panels, is a very important industry that annually generates billions for the California economy as well as the national economy. It also creates and supports hundreds of thousands of US Jobs through either direct employment or ancillary operations.

And we recognize that at the water boards, as a regulatory agency, we also recognize that winemaking also generates winery process water. And the primary concerns of that winery process water that can affect groundwater quality are nitrogen salinity and biochemical oxygen demand.

So at the water boards, we implement the California Water Code, which requires that a person discharging waste or proposing to discharge waste that could affect the quality of waters of the state will file a report of that information with the appropriate regional board.

So under that authority, under the California Water Code, In January of 2021, what we did at the State Water Board was we adopted a General waste discharge for winery process water, also known as our winery general order.

And historically, before that time, wineries were permitted individually, which took a lot of time and resources to develop each of those individual permits.

And then another permitting vehicle that we were aware of were region specific permits, which were help in terms of bringing more people into one permit, but also varied significantly by area when it came to each of the regional boards.

So the winery order was developed to address a backlog in the regional board's issuance of those individual permits, improve consistency of water quality protections, and then streamline the permitting process to increase transparency as well as predictability from wineries.

So statewide consistency and requirements was also a request from the wine industry representatives that the water boards coordinated with during development of the winery order.

I recognize we have representatives from the Wine Institute and the California Association of Wine Grape Growers who did provide a lot of great input that were considered as we developed the order as well. So the State Water board also considered significant wine industry feedback on compliance costs.

That was very important to us to understand, and we were hoping that it was reflected in the regulatory tiers and compliance schedules. So as a high level summary, the order contains a streamlined enrollment process and multi year enrollment schedule. It includes one to four tiers.

So tiers one to four based on permitted annual winery process water and the discharge design flow in gallons. And so that was our attempt for it to be able to be applied statewide was have multiple tiers within one permit.

Those tiers have increasing requirements for monitoring and reporting for process water ponds, land application areas and subsurface disposal systems. And the tiers were also intended to minimize impacts to small wineries through an exemption for wineries that are discharging less than 10,000 gallons of winery processed water per year.

Where tier one wineries, which we were really targeting as those small wineries, required primarily operational controls and very minimal monitoring and reporting.

And then Tier two, Tier two, which targeted the small and medium wineries, includes a pathway to use existing process water ponds mainly just ensuring that it is low risk for surface water impacts either by size or by age.

So winery costs and fees to discharge winery waste to land does depend largely on the age of the facility operations and location. Fast forward five years since the winery general order adoption and where we are now. Crazy that it's been five years. The water boards have enrolled 56 wineries and 122 are actively under review for enrollment.

So that tells me, especially when we recognize that there are 2,000 plus wineries statewide, is that there's steady, thoughtful enrollment that the regional boards are doing and working with the wineries to do so.

Another point is that our program is coordinating with our first sustainability partner, California Sustainable Wine Growing alliance, and in initial stages to develop an approval process for a sustainability program which can assist significantly with demonstrating compliance. And this is outlined in the order.

And this really gets to your question Chair Cavaldon about how research can help and can kind of guide regulatory innovation. Our overarching waterboard priorities at this time are to enroll previously unregulated existing wineries with ongoing discharges and then mainly to provide technical support, especially before enforcement.

And then being in Napa County, just wanted to share the appreciation for the coordination between the wineries, Napa County Environmental Health and the San Francisco Bay Regional Board, where finding flexibility within the General Order has been their main goal.

And just also wanted to say that, you know, being here, I'm grateful to hear the inputs and the insights from the groups with us today and especially the openness to share what's working and what's not and what's obsolete, especially within our regulatory tools.

I just wanted to briefly connect a thread that you started regarding early coordination with the Pro Tem office that started in 2024. Appreciated the opportunities to be able to hear about the challenges, especially in the north coast, and then to get some additional information that we've been looking at, we've been considering.

I just wanted to share that we are evaluating the statewide conditions across the regional board areas, especially with the varying winery sizes.

And given the fact that the winery general order is intended to serve as a statewide regulatory tool for all California wineries, we recognize that any deviations from that are a significant and complex kind of decision decision to be able to implement.

What we are really hoping not to do and thinking about is we don't want to revert back to the scenario that I had mentioned before where there were individual permits and then individual regional permits, where there was less consistency statewide and predictability in terms of what the requirements are.

And so with that, I just wanted to thank you for your time, the opportunity to hear about all the updates, and I'm happy to answer any questions as well.

Great. And appreciate you being with us today. And thanks for the overview and the continued willingness to collaborate to work through these issues.

We still have a ways to go, and I think it may not be the most fun part of the hearing, but it is a good way, I think, to close our panels today because I think part of the reason we're in this situation is that that the state has a hard time seeing the wine industry in all of its glorious diversity.

And so this, as I mentioned earlier, I was a member of Regional Water Board and those regions, there are nine regions in the state that are split up half the states in the Central Valley region that I served on the board for.

And it's in recognition that each of the major watersheds in California are distinct, that they are fundamentally different in very important and powerful ways.

And so we should have most of the water quality regulation activities happening at that regional scale with the state board to make sure that things don't get off the rails and where appeals can be heard.

And so in this situation, I think it's an example where the State Board and others heard from folks in parts of the wine industry saying, you know, what's really important is statewide consistency.

And if you have, if you happen to own, you know, Vineyards or wineries in several regions, if you're a large player in the market, then that's a great value.

Like, I don't want to have to comply with something different in the Lahontan region on the other side of the Sierras and in the north coast, and then separately for the Leopards no more, mostly are split between two different regions. So wouldn't it be great if we had a lot more consistency between the regions?

And that's often an objective in state public policy. But the trade off is then it's almost impossible to See that the different regions have different conditions on the ground, both the economic capacity often of the wineries and the Vineyards themselves, but also the actual.

For some of the Sonoma wineries that are very near the coastline and have different kinds of sand in the soil, there are different conditions. And so I think one of the questions that arose during this entire process on this order was are we getting that balance right between. Because consistency is important. It's not the only objective.

It's also important that we are attentive to the very local needs based both for the industry locally, but also hydrologically locally too. And so I hope we continue to make progress in this regard. I think this does.

The order will always need to be improved and the State Board 's done a good job, I think, on the, on the whole and on average. But if you're not, if you are not in an average place and you are operating a relatively small but not micro winery, it's still, there's still substantial challenges.

So I very much appreciate the board being here. I think it's a good example of some of sometimes the challenges that we put ourselves into on the regulatory space and look forward to continue to working to improve this order, but also to help sure that.

Help sure that future water, air and other regulations are attentive to the diversity of the. Of wine and the wine industry here in California. So thanks so much to our panel. We're going to turn next to public comment and invite folks to come forward to the podium and provide public comments if you would like.

If you would like to do so.

Good afternoon. John Dunbar of Napa. I appreciate seeing two of my former mayor colleagues here in our state leadership roles Today, having spent 12 years as the mayor of Outfill and lived almost 30 years here in the Napa Valley. I appreciate the time that you're taking to, to look at the wine industry and hospitality.

One thing I want to make sure you're aware of is that the Napa County Farm Bureau is already working with Cal Poly to do an analysis of the costs associated with grape growing and wine production, comparing it to other crops in California. So you made a comment earlier in the hearing today about wanting to see comparisons.

And I think that's one place to start is see where they are with that, that research. I also wanted to. She's no longer here, but I want to appreciate the majority leaders comment about analyzing regulations.

I remember looking back in my last couple years as mayor spending two full years reviewing all of our regulatory policies in town in the small town of Yale. It took us almost two full years to do that, that. But we found a lot of junk and we deleted a lot of stuff that didn't make sense anymore.

That never happens, right, in government. And so it would be very helpful to find out what regulatory frameworks are still relevant, are viable and makes sense to still have. I also just wanted to mention very quickly, insurance has not been brought up today.

It's very challenging with a lot of the vintners you're looking, not only because of the wildfires that we've had, that they're, you know, insurance in general is very challenging.

But you often have somebody that has an agricultural component to their property, a residential component, and then the production facility, kind of a commercial industrial component makes it very complicated. There's a way to recognize those relationships and make it easier. That would be appreciated.

Thank you. Thank you.

Thank you.

Anyone else to write comments to the, to the Committee?

Good afternoon. My name is Brian Shepherd. I'm from over the Hill, Sonoma. Wine grower dependent on a winery to purchase my grapes. Very, very fortunate. I have a, a long term contract. But through the conversations I been hearing today, I'm thinking about what happens if that winery doesn't fulfill that contract.

You're asking for immediate things that maybe can help a grower out. If a winery decides to cancel my contract, they have a lot more money than I do. They can litigate longer than I am or I would be able to.

So if you guys could think of some way that we could get relief until we're done with our litigation or some, some form of enabling us to hang on long enough to hold our properties. What else is complicated about pulling out or what to do with our grade lines is we're not row crops.

We don't do three crops in a year. We have to look ahead a minimum of three years. Where we're going to be in three years, who knows. So those decisions are difficult. We're not in the business because it's easy. I'm a fourth generation farmer. My fifth generation son works with me now.

And right now we're just fighting open to hold that property. So my sixth generation grandkids could do the same.

Thank you. Thank you very much. And thank you. Thank you for being with us today and during the story, but also some ideas. So we'll follow up after the hearing as well. Anyone else should provide any testimony to the Committee. All right. I'd like to thank everyone for joining us today. Again, thank you.

To Assemblymember Aguiar-Curry, who is a stalwart advocate for wine. I mean, many folks believe the best wines come from grapes that have faced at least some adversity. Rocky soils, steep inclines, what have you. And so we are making the wine industry as.

As resilient and delicious as it can be with all of this adversity coming at once. But that said, we have to work together.

The state of California needs to modernize its policies to meet the moment, because the wine industry is, as we said at the very beginning of this hearing and throughout, it is so central to the state overall.

But certainly, as the majority both know from representing this particular community, that it is the foundation for so many of California's communities, who we are and our success and our brand in the world as California. But it is also a marker. It's not the only industry facing virtually any of these challenges, except maybe the.

Maybe the generational consumption ones. But regulatory issues, insurance issues, impacts from tariffs, we're seeing these across many of the key economic drivers in California.

And so wine does not stand alone in calling for reforms and improvements in some of those areas so that we can assure that the wine industry, and by including the wineries, the growers, the marketers, the farm workers, the hoteliers, the hospitality workers from throughout every part of the communities that make this industry what it is that California depends on them, and they can depend on California to step up.

And this Committee is going to be working together, together with many of you and with my colleagues in the Senate over the coming year to assure that we're. That we're ready to make that happen. So thanks again for joining us today. Appreciate all of the comments.