The Wine Institute, which represents more than 1,100 wineries and related businesses, recently released its position on Schwarzenegger’s proposal. “The restaurant and hospitality industry as a whole is already reeling from declining sales and many in the industry, including wineries… [And] wineries would be forced to either absorb the tax increase, which would drive down or eliminate profit margins, or “pass through” the tax, raising the price of many popularly priced wines by 25 percent,” it stated. “We understand the [budgetary] need and will support broad-based revenue measures to help solve the budget crisis.”
Another publication released by the Wine Institute, titled “The Impact of Excise Tax Surcharge,” noted just how large an impact a tax hike could make on the wine industry. It estimated that wineries would experience a drop in sales and revenue that would lead to a job loss of anywhere between 6,756 and 11,545. Ironically, the state (and respective county) would also see a decrease in tax revenue that could total $73.55 million to $125.7 million.
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