State legislation would allow operations like Valley View Winery in the Applegate Valley to bring in up to 25 percent of their revenues from non-agricultural sources such as tastings and retail sales. - Mail Tribune file photo

Wineries enjoy taste of success as bill passes

Oregon lawmakers removed some of the guesswork for the state's wine industry, allowing wineries to operate wine-tasting operations, but limiting the revenue that can come from nonagricultural activities on exclusive farm use land.

The bill allows non-agricultural revenue for wineries of up to 25 percent of gross receipts without requiring conditional use permits. The revenue sources include tastings, tours, incidental item sales, wine club activaties and events promoting operations. The bill was approved Monday and now awaits the governor's signature.

"It really helps all the wineries, as well as people considering investing in or putting in a new winery, because it clarifies the rules," said Valley View Winery President Mark Wisnovsky. "Up to this point, there were different rules depending on when people got their permit. It clarifies the rules across the state. There was a lot of ambiguity as to what kind of food service or events. You can imagine what the differing opinions as to what a wine-related event meant."

A previous, but somewhat ambiguous, law was due to expire soon, which could have led to chaos. There have been discussions about dramatically limiting non-agricultural activities at wineries, with allegations that some wineries were essentially operating retail and event businesses under the guise of growing and processing grapes.

As a result, more than 800 vineyard owners and 400-plus winery owners pushed for the legislation, which would replace an existing winery land-use statute written in the 1980s. A key element in the bill is language that expressly allows wineries in farm zones to operate tasting rooms open to the public.

"There were groups, such as the 1,000 Friends of Oregon and some in Yamhill County, that thought it was too permissive," Wisnovsky said. "They didn't want to see destination wineries."

The best way to preserve farmland, the industry countered, is to help farmers grow products profitably.

"This bill is good for small and medium wineries as well as larger wineries," said Sam Tannahill, chairman of the Oregon Winegrowers Association. "It gives winery owners the certainty they need to promote and sell their wines and continue to grow, while still maintaining a balance that protects our special farmland."

Wisnovsky said Valley View, which has been in operation in the Applegate Valley since 1972, is expanding its vineyard for the first time in a quarter century, adding 11 acres to the existing 25.

"One of the main reasons is because of retail sales from the tourism wine trade," Wisnovsky said. "We're planting land that hasn't been used productively for 40 years. There's a lot of money and jobs involved in doing that."

Although the revenue percentage is arbitrary, it fits most wineries' needs, he said. "The good majority of revenue comes from the land. We're not going to get near 25 percent of our revenue from corkscrews, T-shirts and a few weddings."

On the other hand, the law would block someone who wants to plant a few vines and then turn a rural area into a concert and event center.

"I think it's a real positive," Wisnovsky said. "In essence, it gives us the same set of rules that would have sunsetted. But then we would have had some real problems if we couldn't get everyone to agree on the bill. We would have had some very restrictive rules."

Reach reporter Greg Stiles at 541-776-4463 or email

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