Competitors blast ‘unfair’ deal to bring California wine giant to Chester County
With the backing of the governor, a South Carolina Senate panel voted Wednesday to advance legislation that would help speed up construction of a massive bottling, canning and distribution facility in Chester County, promising to bring a $400 million investment to start.
Senators agreed to forward the bill against the appeals of Gallo Winery’s competitors, who blasted the deal as unfair, arguing that existing wine, beer and liquor retailers in South Carolina would not see the same benefit as the California-based wine giant.
Gallo Winery publicly confirmed news this month that it plans to build a brand new facility, its first on the East Coast, in the former mill town of Fort Lawn in rural Chester County. The plan is to add nearly 500 jobs. The legislation in the Senate would let Ernest & Gallo Winery open four, upscale satellite locations where they could sell and allow tastings of a wide array of alcohol that they produce or bottle on top of its manufacturing plant in Fort Lawn — an addition that is not allowed in law currently.
Gallo told senators this month the roughly 600-acre site would spur a much larger investment from the company that would span five phases: bottling, canning, warehousing, distribution and, eventually, manufacturing its own cans on site.
“None of the nearly 100 wineries, breweries and distilleries would qualify for (this) groundbreaking law change,” testified Lock Reddic, president of Green’s Beverages, a large-scale wine, beer and liquor retailer with stores in the Columbia area.
Reddic told senators the legislation is unfair to South Carolina alcohol retailers, who, he said, would not have the same advantage from the amount of alcohol they can allow a consumer to sample to how many days in the year they could open.
The Senate hearing was not the first time heads have knocked over alcohol-related law changes.
Two years ago, breweries and wholesale distributors battled over legislation that would have allowed breweries to open standalone taprooms and transport their own beer to separate retail locations, which they also cannot do under the law.
“It’s one thing for them to produce product in South Carolina and then offer that for sale in stores. That’s bad enough,” Reddic said. But to allow Gallo to sell and sample their entire alcohol line up, he said, “is an absolute complete retail operation. That’s not a tasting or education, there’s no education to that. It’s just sales. It puts us in direct competition with a manufacturer of our product.”
Gallo representative Rob Donoho told senators Wednesday the company is willing to find a compromise, starting with the removal of beer and spirits from its proposed satellite locations and restricting the number of bottles that could be sold.
Donoho added four satellite locations would not make South Carolina unique.
Other states allow for more tasting rooms, including, he said, a neighboring state that allows for five tasting rooms.
“We’re not looking to compete,” Donoho said.
Competitors still were not sold.
Harry Root, who owns North Charleston-based Grassroots Wine, called Gallo’s move to South Carolina a smart business plan, but testified Wednesday that while he recognized the importance of investment and job creation, tasting rooms were too much.
Root, who said Grassroots does not do business with Gallo, said the satellite locations create an uneven market for wholesalers, retailers and bars, and would threaten jobs and divert hospitality money from existing South Carolina businesses. Root said he collected more than a dozen signatures in opposition to the bill, including from Charleston restaurants Husk, Fig, Butcher and Bee and pizza chain Mellow Mushroom.
Senators told Gallo they want to make the deal work and believe a compromise can happen, asking Gallo, retailers and wholesalers to meet immediately and hammer out a compromise to ensure the bill can get full Senate approval before the Legislature’s April 10 crossover deadline.
“We want to come to South Carolina,” Donoho said. “It would be a shame not to come to South Carolina.”
This story was originally published March 24, 2021 at 5:41 PM with the headline "Competitors blast ‘unfair’ deal to bring California wine giant to Chester County."
