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Report: Wine industry generates $11 billion a year
Thursday, October 30, 2008
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Confirming that the wine industry is a dominant force in Napa County and a significant one for the state and national economy, a report released Wednesday states that the Napa County wine industry generated nearly $11 billion in local economic activity and more than $42 billion around the country in 2006.

The study was released by the Napa Valley Vintners, a trade association of more than 300 local wineries, and completed by Stonebridge Research Group, a Napa-based firm that tracks trends and economic opportunities in the wine industry.
The report takes into account everything from wine industry wages at local vineyards, bottling lines and cooperages to sales at restaurants, retail outlets and through beverage distributors.

It is the second such study of the local wine industry’s economic impact. A survey done in 2002 and released in 2005 showed the industry generated $9.5 billion in local economic activity. The new report finds a 15 percent jump between 2002 and 2006.
“Napa Valley’s wine is the heart of the county’s economic prosperity and certainly its international prominence,” stated the report, completed by Stonebridge President Barbara Insel.

“Napa Valley produces just 4 percent of California’s winegrapes, yet the region is responsible for nearly 30 percent of the economic impact of wine in California, and nearly 34 percent of the economic impact of California’s wine to the U.S. economy.”
The report found that the industry was responsible for nearly 40,000 full-time jobs in Napa County in 2006, where the total population is roughly 130,000, and more than 230,000 jobs around the country.

Local wages earned were roughly $1.5 billion. According to the report, some 3.5 million wine-related visitors spent $714 million here.

The study took into account direct, indirect and what are known as induced economic effects in reaching its conclusions.

Direct effects include employment and consumer spending at wineries, vineyards and through distributors. Indirect effects measure the way the industry creates growth in related industries, such as vineyard nurseries, trucking companies and other suppliers of goods, services and equipment.

Induced effects include private spending by wine industry workers on everything from groceries to health care.

The report states the industry has a “multiplier” effect. “The revenue derived by the wine industry becomes income for other workers and firms, who spend more money on other goods and services.”

Linda Reiff, executive director of the Napa Valley Vintners, said, “Especially during these tough times it is encouraging to know that we have a strong industry helping fuel our local and greater economy. We are also fortunate to have had the support of our community to uphold land protection measures that keep Napa County rural and in agriculture — successful agriculture — which is rare and valued.”

Reiff said that the current economic climate has had an impact on wineries, with some experiencing flat sales and others making modest gains.

“The industry has weathered downturns before,” said Reiff. “This report shows the industry is strong and therefore may be able to weather this one better.”

Register Features Editor Sasha Paulsen contributed to this report.

By the numbers: Napa County wine

A look at annual figures for economic activity of the wine industry.

Wine-related jobs in Napa County    39,900

Wine-related wages earned in Napa County    $1.5 billion

Cases of Napa Valley wine produced    9.2 million

Wine-related tourism spending    $714 million

Wine-related charitable donations    $72.9 million

Local and state taxes paid within Napa County    $601 million
37 comment(s)

constant comment wrote on Oct 30, 2008 8:16 AM:

" I've read this article twice and have not been able to discern how the local economic activity figures add up to $11 billion. A little more detail would make the numbers comprehensive. The stated activity listings account for around $3 billion...are we to understand that the other $8 billion is a function of the multiplier effect? "

Local Yokel wrote on Oct 30, 2008 8:36 AM:

" This is certainly a pretty penny, but I am not surprised when you can get wasted for a couple of bucks. I would be interested to also hear the statistics from our local health industries of how many people they tend with alcohol related illnesses - diabetes probably being one of the more common. If self control was so easy to come by, we wouldn't be a nation of fatties. Don't get me wrong, I enjoy a glass of wine as much as everyone, but I would be prepared to see an increase of tax per bottle to help support a national health care plan. Just an (unpopular) suggestion. "

reason-ator wrote on Oct 30, 2008 10:13 AM:

" Wow. I haven't seen any money from the wine industry.

But I did almost get beheaded by a blown re-treaded tire flapping off of a truck hauling grapes. I get to hit the potholes in the roads from the traffic and I get to sit idling at traffic lights waiting for the tourists to clear the intersections.

When will the wine industry finance a study showing us how much the wine industry is costing us ? "

chunk wrote on Oct 30, 2008 11:33 AM:

" How about some money back to the citizens like the citizens of Alaska get from the oil companies. "

Born-n-Raised wrote on Oct 30, 2008 12:23 PM:

" Geez people. Why can't you accept that you live in a tourist destination. To say that you haven't seen any money from the wine industry is ridiculous. It is all connected! Nearly every industry in the valley has a direct connection to the wine industry and the tourism associated with it.
All I see is negative response's to a industry that provides 40,000 jobs and 1.5 billion dollars in wages to Napa and its surrounding city's. Not to mention 72 million dollars in charitable donations. "

Rob C wrote on Oct 30, 2008 12:51 PM:

" " How about some money back to the citizens like the citizens of Alaska get from the oil companies. "

Sure - when the day comes you can drill a hole in the bare ground and have wine come out for the next 20 years... "

db76 wrote on Oct 30, 2008 1:05 PM:

" Does that 11 billion include money that should have been subtracted for re-paving the Silverado Trail at taxpayer expense? "

pat wrote on Oct 30, 2008 1:09 PM:

" What makes you think you should see a dime of the wine industries money? What makes you think you should see a dime of the wine industry’s money? What did you do to earn it, or are you just looking for a hand out?

And for the record, the wine industry that so many "born and raised" like to bash gives back to the LOCAL community close to 10,000,000 A YEAR. The amount raised at this years Auction Napa Valley was 10,300,000, and yes, it stays in Napa. "

freshair wrote on Oct 30, 2008 1:52 PM:

" $11 billion generated per year
400 wineries
40,000 employees
5 million tourists
$0 paid in traffic impact fees

Am I missing something? "

born-n-raised wrote on Oct 30, 2008 1:57 PM:

" Pat
Just to clarify. I was trying to point out that the wine industry is very important for the community. They in fact gave 72 million back to the community last year and I am very appreciative of that. "

born-n-raised wrote on Oct 30, 2008 1:58 PM:

" db76.
The wine industry pays taxes just like you and me. In fact they paid $601 million in taxes and i'm sure a chunk of it went to fixing roads. "

Rob C wrote on Oct 30, 2008 2:51 PM:

" *sigh*

What you are "missing" is that if it wasn't for the wine industry this precious valley would have been carpeted with houses, condos and strip malls a very long time ago.

Instead you get nearly $3 billion in LOCAL wages, spending and taxes to help keep your backyard perch free from all that icky sprawl.

How much did your employers industry pay in local "traffic impact" fees? "

MarshaMarsha wrote on Oct 30, 2008 3:04 PM:

" $11 billion taxed and the worst roads in the state. Figure THAT out. "

napaoldguy wrote on Oct 30, 2008 4:17 PM:

" Lets see the roads are all destroyed by the truck traffic, the roads are all clogged with traffic, the valley is over run by hte immagrents that are protected and do not have to follow our laws. Then they throw it our face how much money they generate. Thats so cool "

db76 wrote on Oct 30, 2008 4:23 PM:

" Most businesses get out of paying more taxes than they actually pay. Most fortune 500 companies don't pay any taxes at all, so don't be so sure that the wine industry is paying taxes to fix roads. "

vocal-de-local wrote on Oct 30, 2008 4:46 PM:

" I agree with Yokel. It would be nice to see some of those profits going toward the cost of alcohol related illnesses.

Be aware that an alcoholic in ICU who's on medicare or is uninsured can cost taxpayers $100,000 or more. The image of alcohol as a ticket to the "good life" costs us dearly. We pay for this on some level in every town or city, no matter how big or small. We are collectively unhealthier because of alcohol no matter how much we are brainwashed into thinking otherwise. We should be alarmed by the levels of these profits because it's indicative of a much greater problem. "

db76 wrote on Oct 30, 2008 4:56 PM:

" Hopefully some of that 1o million they raised (not donated) last year goes toward paying for the health care costs of the seasonal workers who aren't covered by medical insurance. Were health care costs subtracted from that 11 billion, or is that just a cost that society as a whole just has to eat? "

Rob C wrote on Oct 30, 2008 5:02 PM:

" ^^^^^ Are you including in your reply payroll taxes - the matching Social Security tax all employers pay? How much do you think that amounts to vis a vis the above payroll number? Bet you its over $100mm!

Who do you think pays for half of what you will get in your dotage? Business payroll taxes are half of social security.

So just don't consider corporate income taxes when you think of what companies contribute to society.

Finally, corporate tax breaks designed to add or keep jobs (R&D tax credits, agricultural credits for farmers which funnily enough the wine industry employs, etc.) aren't necessarily a bad thing - just ask anyone employed.

And to come full circle, doesn't everyone on a wine-industry or related payroll pay sales and local taxes, part of which ostensibly go to fix the roads assuming there is any left after paying for service employee benefits and entitlements?

My advice is to drink more wine and less Obama kool-aid... "

whyn? wrote on Oct 30, 2008 5:19 PM:

" It is terrifying that a head of lettuce costs close to what a bottle of relatively good tasting wine costs. Anyone who wasn't living in wine bubble and had some common sense would start ripping out their vineyards and growing food. "

Rob C wrote on Oct 30, 2008 5:22 PM:

" ^^^^ Great, and lets tax McDonalds for obesity and diabetes. Lets tax Apple for i-pod related hearing losses. Lets tax GM for auto accidents. Lets increase taxes on groups of humans genetically predisposed to expensive medical conditions. Where does it end?

Everybody wants to jump on "windfall profits" bandwagon as panacea. How about somebody standing up for personal responsibility?

Sweeping comments assuring that we are "collectively unhealthier because of alcohol no matter" is alarmist, and plain wrong.

But to the point, anyone care to guess how much the wine industry has donated to health-related activities over the years?

Wealth redistributionists and social engineers everywhere you turn nowadays... "

Rob C wrote on Oct 30, 2008 5:30 PM:

" Lets see, did we get them all?

Windfall profits? Check.
Corporate greed? Check
Tax dodgers? Check
Worker exploitation? Check
Social pariah? Check

Oh yes...Potholes? Check

Wow - lets just revoke all the permits tomorrow... "

Rob C wrote on Oct 30, 2008 5:57 PM:

" Whoops - missed one!

Perhaps because "common sense" would tell you that the economics of lettuce production are completely different than wine.

Must admit though - didn't see that one coming.

Sheesh... "

MarshaMarsha wrote on Oct 30, 2008 6:44 PM:

" Rob C: They call the Napa Valley an "Agricultural Preserve", it is not a "Viticultural Preserve".

While I agree with you that without the wine industry this valley would be blacktop and concrete, it is protected for agriculture and not just viticulture.

Doesn't matter if you grow beans or grapes. It's just that producing wine is more "status quo". Grapes produce better revenue for greedy capitalists who are more concerned about which Italian tile to put on the floor of their Tuscan-style mansion rather than condition of the roads. Drink that. "

mofosheee wrote on Oct 30, 2008 7:07 PM:

" And while they generate 11 BILLION a year, they should also contribute to providing homes and medical care to the labor force that they illegally import and exploit. Shame on this "industry" for the burden that they cause to our society and the American taxpayers. "

db76 wrote on Oct 30, 2008 8:11 PM:

" mofosheee, as soon as you tell people that industry should take pay taxes and be responsible for their cost to society, you have certain people who misinterpret that as Socialism. Meanswhile, giving 700 Billion dollar cash payments to corporations, trillions in subsidies and tax breaks, and thousands of laws passed every year that favor business is not, for some reason, socialism. "

napasfinest wrote on Oct 30, 2008 8:26 PM:

" I love how these Napa locals hate the wine industry for God knows what reason. Do you people have to complain about everything? I'm assuming most of you are just jealous that you are nowhere near as successful as the wine tycoons. "

my name here wrote on Oct 30, 2008 9:14 PM:

" napasfinest : You might want to consider that the "wine tycoons" are Seagrams Beverages, Nestle Foods, and Anhauser Busch Inc., to name a few. Napa used to be another roadside attraction, but today it is a destination. The tourists don't get to the wineries by wing or rail. They drive. I don't hate the wine industry, it's very charming, but I don't believe that the wineries don't consider the impact they have on Napa's infrastructure. "

Napa Mom wrote on Oct 30, 2008 9:25 PM:

" MarshaMarsha - grow up - you really think the land values can support lettuce? Maybe you should go back to second grade math. There are two crops that Bay Area (and yes, like it or not, we're part fo the Bay Area because of our proximity) can afford to sustaing - wine grapes and houses. All of you - pick which one you'd like. That's the reality. And maybe we'd all be better off if we did call it the viticulture preserve, the rest is just fluff that lives off the wine industry. Take your choice, Napa or San Jose, it's up to you. "

dire-wolf wrote on Oct 30, 2008 9:39 PM:

" mofosheee, if you follow the articles in this very newspaper you should know that the wine industry voluntarily supports charities that provide housing and medical care for workers, not just those in the wine industry, but for everyone in need. Maybe some other local industries should step up to the plate and do likewise. "

MarshaMarsha wrote on Oct 31, 2008 12:09 AM:

" Napa Mom: Before this valley was carpeted with lush cabernet, juicy zinfandel, and sparkling pinot noir, it supported plums and walnuts. Climate isn't right for lettuce, you're thinking Salinas. It's OKay if you flunked California history.

Any retired Napa native will tell you more stories about picking plums than making wine. Just a handfull of wineries for decades. Things were all right back then.

And we had good roads, too! "

whyn? wrote on Oct 31, 2008 4:03 PM:

" Most of the donations to charity are "hush" money. Such as to the women's shelter. How much do you think alcohol contributes to domestic violence? "

LMW wrote on Nov 4, 2008 9:20 PM:

" I am ashamed that we have these numbers yet our county is having transportation needs. Time for the wine industry to take part on the local transportation issues, thanks for all the charity dollars and much needed charity dollars but I see it as being unfair to who is responsible for our county roads....Were looking to Impact fees from developers, I say we seek the numbers on this stonebridge study and evaluate who also should be in those discussions on impact fees. The roads are used by the trucking companies in the county to move grapes from A to B so.....Change is here america, time to change a whole lot of Napa county too. "

fedupinnapa wrote on Nov 6, 2008 8:00 PM:

" Is this some sort of joke! "Hush Money" wow nothing like doing something nice then having people kick you in the teeth. I guess I can just rip up my checks this year. I would hate to see the fed's call it a bribe.

I assume that Bill Gates and Steve Jobs donations to education are simply hush money because the product they sell causes pornography addiction in children and lowers their IQ.

Now to economics. The artical states that the wine industry generated 11 billion in local economic activity not profit! We are talking about money spent at local businesses like browns valley market, restaurants like Pearl owned by great people like the Zellars and many other local owner operated businesses. These people are not rolling in piles of money they are great local Napans working hard to make a living. Read the artical Jobs, Tourism spending, charitable donations, tax revenue.

If you want to complain about the loss of small farms in napa with plums and walnuts then you should look at your need for cheap food driving down the commodity prices starting the boom of industrial agriculture and running out family farms. If small scale plum farming was profitable they may have not converted to grapes. "

109823 wrote on Nov 6, 2008 9:46 PM:

" As noted the vineyards have kept the valley floor from urban sprawl but I'm not sure if that outweighs the element that the wineries have attracted for employment. Our communities have suffered as a result and so the pros and cons will continue to discuss whether the wineries are good for Napa Valley or not. I can't think of one way that the wineries help me, but I'm sure that people believe that I'm in the small minority. "

Terry Hall wrote on Nov 7, 2008 2:03 PM:

" Thank you fedupinnapa for helping the many posters who did not understand the Economic Impact Report. The wine industry generates this revenue-like throwing a pebble in a pond and its ripple effect-that's how economic impact is measured. As part of the total consider $$601 million in state and local taxes and $553 million in federal taxes are generated annually from the Napa Valley wine industry's presence in the county--also consider that 95% of wineries in Napa County are family owned businesses...read the whole report at www.napavintners.com, it will make it all a lot clearer. "

14obama wrote on Nov 11, 2008 5:59 PM:

" They're making alot of money. They don't need it all. Give it away to get something back. Don't fall in love with the stuff. "

14obama wrote on Nov 12, 2008 4:52 PM:

" Sorry,"fedupinnapa" but I must correct your grammar. It's article not artical.
I remember when the San Jose area was all orchards and Napa was orchards and independent,family farms. I enjoy the vineyards in all seasons,but,they get monotonous sometimes. Why they continually make the rows vertical instead of horizontal makes me wonder if they care about erosion. I suppose it would have to be terraced,though or the tractors would be tipping over. "

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