Grower Says Russan River AVA Expansion Could Increase Gallo Revenues $3 million Per Year

Wine grape grower Paul Bialla of Windsor asserted that E&J Gallo stands to reap as much as $3 million per year if the expansion of the Russian River Valley AVA is approved.

In his comment filed with the TTB opposing the expansion, (full text here) he asserted that:

“There is no question but that the driving force behind virtually every wine related issue is money. That is certainly the case with this petition.

“The Gallo Family owns 350 acres within the proposed expansion area, purchased some 10 years ago yet filing no request since then for expansion into the Russian River Valley AVA, even while the 2005 expansion was being processed.

“There is considerable value to the Gallo Family by such an expansion. In comparing wine prices of 9 wineries that sell both Russian River Valley and Sonoma Coast Pinot Noir and Chardonnay, one finds an average bottle price difference of $6.24 between wines produced from the two viticultural areas.

Bialla’s letter continues, in part:

“(One of those wineries was MacMurray Ranch, owned by the Gallo Family, where the price differential for their Pinot Noir averaged an impressive $14.37, based upon a survey of several wine retailers.) To see what the value of the proposed expansion would mean to the Gallo Family it is possible to take a representative example.

“If it is assumed that the Gallo Family was to receive one-half the average retail price in revenue, or $3.12 a bottle, and their 350 acres typically yield 3½ tons/acre, the 1,225 tons of grapes harvested annually would produce 80,000 cases of wine (at approximately 65-66 cases/ton of grapes), or close to $3,000,000 a year.

“That is considerable incentive to see on their wine labels the words “Russian River Valley” while nothing else has changed inside the bottle.”