States Pour Government Money Into Wine

Dick Seibert has lost money every year since he opened Knob Hall Winery in rural Maryland in 2006. Now he’s looking for the financing needed to double his vines to 60 acres by yearend. “We’re not making money yet, although we’re not that far away,” says Seibert, 58.

Businessweek reports that Seibert’s optimism is buoyed by the silent partner he shares with many young wineries: his state government. He has received some $8,000 in aid from the state, including $1.50 of the $3.50 cost of each of the 4,000 vines he planted in his first two years.

Five other vineyard owners in Maryland–where the number of wineries has doubled to almost 50 since 2005–are getting a total of $75,000 in state grants this year to expand production capacity.

“The whole concept is to become a destination [for visitors] from Baltimore and Washington, a great day trip,” says Seibert, sketching out his vision of a profitable future for the verdant hillsides, 75 miles from the capital, where his family has farmed soybeans and corn for more than two centuries.

A decade ago, only a handful of states subsidized wineries, according to WineAmerica, the industry trade group. Now all U.S. states offer funding for them.

Viticulture “is at the core of agri-tourism, and states should do more” to support it, says Cary Green, chief operating officer of WineAmerica. Texas, which has 212 wineries, allocates $2.3 million a year for wine research, marketing, and grants for producers, nine times the level in 2005.

Ohio spent more than $1.1 million on subsidies for its wine industry in the 12 months through June, up 38 percent over the previous year.

And Virginia dedicates 70 percent of its tax of 30¢ per bottle of wine–a total of about $1.3 million this year–to promote the industry.

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