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  • Linda Murphy
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  • Linda Murphy
20 Feb 2009

California axes tax – for now

California wine producers, sellers and buyers dodged a so-called 'nickel-a-drink' tax when the state legislature approved a budget package that does not include increased taxes on alcoholic beverages.

After marathon negotiations between Democrats and Republicans, both houses of the California Legislature passed a package of bills on 19 Feb to close a $42 billion deficit. The new budget, expected to be signed by Gov Arnold Schwarzenegger on 20 Feb, includes $15 billion in cuts to such programmes as education and health care, and raises personal income and state sales taxes to recoup some $12 billion - yet did not hit the alcohol industry for a tax increase that, while pitched as costing just five cents per drink, would actually increase producers' tax from four to 29.6 cents per 750ml bottle – which would be passed on to consumers.

The Wine Institute led California wine-growing and producing organisations in convincing legislators that such a tax was exorbitant. However, increased excise and/or sales taxes on alcoholic beverages could be re-introduced later in the year, if the state budget continues to come up short.

Attention Trader Joe's shoppers: Two Buck Chuck wines are still $1.99 a bottle, plus California Redemption Value (CRV) and state sales tax ... at least for now.

Winemaking changes

Peter Luthi, winemaker at Trefethen Vineyards in Napa Valley for 25 years – equivalent to a lifetime for a non-family member employed at a California winery – has retired. John Ruel was promoted to director of viticulture and enology, and Zeke Neeley was elevated to winemaker. Luthi produced fine dry Rieslings and Cabernet Sauvignons during his Trefethen tenure, yet I'll always remember him for keeping oak and buttery malolactic levels down in his food-compatible, ageworthy Chardonnays. At a time when fellow vintners were earning high scores for ultra-rich, soft, cocktail Chardonnays, Luthi and the Trefethens stuck to their guns, and now most Napa winemakers have found their way back to a relatively moderate Chardonnay style.

Kevin Morrisey, since 2005 the winemaker at Stags' Leap Winery in Napa (not to be confused with nearby Stag's Leap Wine Cellars, founded by Warren Winiarski and now owned by Ste Michelle Wine Estates and Piero Antinori), has joined Ehlers Estate in St Helena as winemaker and general manager. Ehlers is a certified organically farmed estate with a noble mission: all proceeds from the sales of its wines go to the Leducq Foundation, which funds international cardiovascular research. The Ehlers Estate wines (Cabernet Sauvignon, Merlot, Sauvignon Blanc) can be quite good, though they aren't counted among Napa Valley's finest. Perhaps Morrisey, trained at Ch Pétrus and Etude Winery under Tony Soter, can lift the winery's game so that it achieves more prominence.

Napa Carneros' Artesa Vineyards & Winery hired former Duckhorn Vineyards winemaker Mark Beringer as vice president of winemaking operations. Beringer, a descendent of Beringer Vineyards' founder Jacob Beringer, spent 14 years at Duckhorn, eventually becoming director of winemaking. While I was the wine section editor at the San Francisco Chronicle, Duckhorn Wine Co was chosen the newspaper's winemaker of the year. Artesa is owned by Spain's Codorníu.

Phelps suit settled

A San Francisco judge awarded former Joseph Phelps Vineyards' winemaker Craig Williams and the estate of ex-Phelps president/CEO Tom Shelton a combined $24 million, settling a suit brought by the winery principals against the famous Napa Valley wine company.

Shelton (who died in July 2008 after a battle with brain cancer) and Williams, who served 32 years with the winery, were limited partners in Joseph Phelps Vineyards. After they resigned their positions in May 2008, the Phelps family challenged the compensation Shelton and Williams claimed they were due. In September 2008, an arbitrator awarded Williams and Phelps $24 million; the winery appealed the judgement, and this month, San Francisco Superior Court Judge Peter Busch ruled, 'There are no grounds to vacate the final award.'

Williams will receive $11.8 million, plus interest; Laurie Shelton, Tom Shelton's widow, will get $12.25 million plus interest.