Farm winery licenses authorize the licensee to manufacture wine containing 21 percent or less of alcohol by volume and to sell, deliver or ship the wine, in accordance with Virginia ABC regulations, in closed containers, to Virginia ABC, wholesalers resale or persons outside the Commonwealth.
Such licenses shall also authorize the licensee to sell wine at retail at the places of business designated in the licenses, which may include no more than five additional retail establishments of the licensee. Wine may be sold at these business places for on-premises consumption and in closed containers for off-premises consumption. In addition, wine may be premixed by the licensee to be served and sold for on-premises consumption at these business places (COV 4.1-207).
A farm winery license is designated either as a Class A or Class B (COV 4.1-219):
- For Class A farm winery licensees, at least 51 percent of the fresh fruits or agricultural products used by the owner or lessee to manufacture the wine shall be grown or produced on such farm and no more than 25 percent of the fruits, fruit juices or other agricultural products shall be grown or produced outside the Commonwealth.
- For Class B farm winery licensees, 75 percent of the fresh fruits or agricultural products used by the owner or lessee to manufacture the wine shall be grown or produced in the Commonwealth and no more than 25 percent of the fruits, fruit juices or other agricultural products shall be grown or produced outside the Commonwealth. No Class B farm winery license shall be issued to any person who has not operated under an existing Virginia farm winery license for at least seven years.
The federal court ruled in the case of Brooks v. Danielsen that portions of the Virginia statutes dealing with the Virginia farm winery laws were unconstitutional. As a result of this ruling, farm wineries are not permitted to wholesale (self-distribute) their products to retailers. Farm wineries desiring to sell their wine to ABC licensed retailers have to find a Virginia wine wholesaler to do so on their behalf.
Also note: Although a farm winery may appoint more than one wholesaler, it may not appoint more than one wholesaler within a specified sales area.
As a result of limitations placed on the privileges of farm winery licenses, Virginia ABC has had to reevaluate the monthly reporting requirements that each winery must complete for Tax Management. Rather than completely overhauling the current process of remitting the monthly excise tax, we ask farm wineries to continue with the current method of reporting those taxes. For clarity, please be guided by the following:
- Wines that are reported by farm wineries on the monthly Wholesaler's Summary of Wine Sales and Taxes (PDF) shall only be those wines that have been transferred to the farm winery retail operation.
- A purchase order must be executed and submitted to the Tax Management Section when the wines are transferred to your retail side.
- Any wines that are sold to a wholesaler for distribution to other retail outlets must be sold on a purchase order and those purchase orders must be submitted to Tax Management by the wholesaler.
Shipping and Common Carriers
Farm wineries are not permitted to personally deliver wine sold for off-premises consumption using retail privileges. However, this does not prohibit farm wineries from continuing to sell wine at the winery for off-premises consumption, or selling wine for off premises consumption at approved remote locations. This regulation simply does not allow a farm winery or its employees to deliver the wine to the consumer away from the winery or remote location. If you desire to ship wine to consumers via common carrier, you may apply for a shipper’s license.