Jan 05

Missouri Wine Industry Grows Despite Drought

Missouri’s Wine Industry Grows Despite Drought

Tax Incentives Credited As Part of Wine Makers’ Success

By Mike Ferguson

(Augusta, MO) – You may not drink it, but you at least indirectly pay for it.

Missouri’s Wine and Grape Tax Credit is praised by wine makers as one of the reasons that industry is growing in the Show Me State. The industry has an impact of over a billion dollars a year on the state and directly or indirectly impacts over 14,000 jobs, according to Mt. Pleasant winery owner Chuck Dressel. Dressel is also on Missouri’s Wine and Grape Board.

There are over 90 wineries and 400 vineyards in Missouri.

MWSnap075“The industry itself has many, many facets to it, to where it spreads virally into all sorts of sectors”, Dressel explains in an interview on “Missouri Viewpoints”, “…from agriculture to service to food supply to distribution to retailing, so it has hooks in many, many different industries in the state.”

A 2010 study by Stonebridge Research found about $386 million dollars in wages paid as part of the wine and grape industry in the state per year and over $176 million paid in taxes from commerce related to the industry. Of that, almost $82 million were paid to state and local governments.

MWSnap074The study found tourism related to the wine industry to have a $92 million annual impact on the state alone.

Lawmakers from both sides of the political aisle in Jefferson City say the state is looking at yet another tight budget year with spending cuts high on the priority list. The push to reevaluate many of the state’s tax credit programs is gaining momentum as state coffers deal with less revenue.

Dressel hopes the call to cut back on tax credits will not impact the Wine and Grape Tax Credit program, which provides incentives equal to up to 25% of the purchase of new equipment and materials needed to start or expand business in the wine and grape industry.

MWSnap076In other words, taxpayers are subsidizing the purchase of farm equipment to grow the grapes, barrels to age the wine and bottling equipment to get the beverages from the winery to the table.

“Since the end product, literally, goes throughout the state and also provides so many jobs and so much opportunity for revenue inside of the state…” Dressel says “It’s important to think not just of the winery selling wine here at the winery but think about it being placed on a store shelf at a Schnucks or WalMart, and what impact that has as opposed to a California wine.

“All this money stays in the state and it allows individuals who don’t drink wine to benefit from it.”

That’s probably not going to stop state officials from putting the Wine and Grape Tax Credit on the list of programs to reconsider, along with most or all other tax incentives. Dressel wants decision makers to preserve this program as is, because of the industry’s relationship with other business in the Show Me State.

“The big thing is not to just look at what the individual winery is purchasing but see where they are purchasing these grapes, or these barrels, or where that tax credit money is actually going to. It’s going to other Missouri industries for the most part.”

Unlike other Missouri agriculture industries, Dressel says wine and grape makers actually benefitted from the harsh 2012 drought.

MWSnap078“We say this with all respect to our neighbors who have suffered terribly to grow corn and row crops; this has been a great year to grow grapes.

“ The quality is unbelievable. The sweetness levels, the flavor levels, everything is just perfect to make a great bottle of wine. And, although I certainly don’t want to have a drought harm our neighbors again, we would love to have conditions like this again year in and year out.”

The tax credits, though, aren’t the sole reason for the growth of the industry in Missouri. Dressel says there’s an agricultural basis for that and it’s why he feels Missouri wines can compete with America’s better-known California wines.

“Our climate is suitable…our days of sunshine are suitable and, also, our customer base is suitable to drink our products…”

“Napa Valley (CA) and Augusta (MO) are almost on the same latitude so, therefore, we have the same amount of sunshine.”

An estimated 4,400 tons of grapes are produced in Missouri every year, with almost all of that being used for wines.

Permanent link to this article: http://missouriviewpoints.com/missouri-wine-industry-grows-despite-drought/