Study by Pitt-Bradford faculty finds room for growth in Pennsylvania wine industry

A report on the Pennsylvania wine industry by a Pitt-Bradford faculty and former faculty member assesses the state of the industry and found that it has capacity for growth.

The report by Dr. Shailendra Gajanan, associate professor of economics, and Dr. James Dombrosky, a former member of the hospitality management faculty at Pitt-Bradford, notes that Pennsylvania’s wine industry currently operates at only 76 percent of its current capacity and that it could achieve economies of scale by increasing its production.

The report was commissioned by the Center for Rural Pennsylvania, a state legislative agency that serves as a resource for rural policy within the Pennsylvania General Assembly.

Legal Tastings – A Wine Law Blog reviewed the report and called it “chock full of interesting facts, cogent analysis (that) should be required reading for anyone interested in wineries located in Pennsylvania.”

“Winemaking is a big industry in Pennsylvania,” said Gajanan, noting that the state ranks seventh nationally in wine production. “The question is, can it get bigger and can the government do something to help it get bigger?”

As part of the study, Gajanan and Dombrosky compared practices, results, funding streams, regulations and marketing efforts with those in Ohio, Maryland, Virginia, North Carolina and New York.

The researchers found that one of the great limitations to growth, however, are the current laws and policies that limit the amount of Pennsylvania wines sold by the Pennsylvania Liquor Control Board state-run liquor stores. The authors noted that it is uncertain how the possible privatization of liquor sales in Pennsylvania would affect the wine industry, but lifting a prohibition against shipping wine to Pennsylvania would also allow wineries to ship out of Pennsylvania. Currently, researchers said, a shocking 81 percent of all Pennsylvania wine is sold directly by wineries to wine outlets and tourists.

Gajanan and Dombrosky recommended that the state consider designating any revenues from shipping wine out of state to wine research and marketing; encouraging increased signage for wine trails and regions; enacting policies to facilitate increased sales of local wines at state-run liquor stores; and providing incentives for wineries to use Pennsylvania grapes.

The full report is available at www.rural.palegislature.us/documents/reports/pa_wine_industry_2013.pdf.

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