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TAX-BREAK VETO SHOCKS WINERY OWNERS

Tourists on a two-lane blacktop skirting the La Sal Mountains of southeastern Utah often are astonished by the sign pointing to Arches Vineyards, the state's only winery.

A winery in Utah, famed for its abstemious Mormon heritage and strict liquor laws?"Everyone says that," says winemaker Ted Telford. "That's the big pull for tourists coming into the tasting room. That works in our favor."

But Republican Gov. Norm Bangerter delivered it a crippling blow Tuesday by vetoing legislation that would have given Arches a tax break.

The governor, a Mormon who defended the proposed tax break against the early opposition of church leaders, said he had no choice. State attorneys felt it would violate the U.S. Constitution by discriminating against out-of-state sellers.

"It was a shocking blow," winery owner Anita Bradford said Wednesday. "We're back at square one. Right now we've grieving."

Arches Vineyard, a few miles south of Moab, began operating in 1989 when Bradford, her husband, Allen, and Telford bottled their first wine. The winery now produces 7,000 gallons a year of vintages ranging from chardonnay to zinfandel.

The Bradfords, both devout Mormons, see no moral conflict with their church's ban on alcohol. They say the winery and 15 tiny vineyards are an economic boon for the rural economy and sensible use of the land.

Arches is the sole buyer of grapes that have grown in the area since 1972, when the state encouraged the planting of crops that could survive the hot summers and bitter cold winters.

Dutch Zimmerman is one of the growers who used state-backed low-interest loans to plant and irrigate vines. He estimates he's put $150,000 into his 10 acres over the years, hiring 10 seasonal workers a year to tend and harvest the grapes.

Like other growers, Zimmerman's options are limited if Arches doesn't buy his grapes. Colorado wineries won't buy out-of-state grapes and there is no market in other surrounding states.

"If the winery doesn't succeed, then the growers don't succeed," he said. "I feel so bad for Anita and Allen because they put their heart and soul into this thing."

Bradford said she's invested about $175,000 over the years. She said she and her husband never have made a personal profit and planned to put the tax break back into the business.

The problem stems from the state's markup on wines and spirits. Private retailers sell only beer, while wine and liquor are sold in state-owned stores at a 61 percent markup that helps fund school lunches.

Bradford asked the Legislature to cut the markup on her wines in half. After church leaders retreated from their early opposition, the bill passed easily.

Now that it's been vetoed, Bradford said, there is nothing to be done except try a new tack next year - if the winery can find external support to survive.

"The tragedy is the loss to the region, what it could have become, and the growers," Bradford said. "I don't know what the outcome is for them."