Recommended Citation
Published in Napa County Farm Bureau News & Research, July 1, 2026.
Abstract
Unlike other food products, commercial alcoholic beverage production has been subject to federal regulation and taxation since the founding of the United States, with specific wine taxes being levied during the wartime Emergency Revenue Act of 1914 (Cilluffo and Gravelle, 2024). Since then, taxation and regulations have expanded, with many new laws originating at the state level. Additional regulatory costs, combined with the current decline in consumer demand raise questions regarding the long-term viability of California wine production. Napa County Farm Bureau contacted Cal Poly to assess baseline conditions in the industry by conducting a case study of regulations accruing to a Napa Valley winery. We interviewed one small winery (8,500 cases) in 2025 and documented the costs of complying with regulations in the following categories:
• Education and Training for Regulatory Compliance
• Air Quality
• Water Quality
• Water Supply
• Hazardous Materials and Wastes
• Employee Safety
• Labor Benefits
• Alcohol Production
• Food Safety
• Other Regulatory Costs
• Wine Sales Regulatory Requirements
The cost of regulatory compliance of wine production is $115,874 or $13.44 per case. Given a weighted average of product costs at $135.25 per case, regulatory compliance costs account for 9.94% of production costs. In addition, regulations associated with selling wine direct-to consumers adds another $87,958 or $10.20 per case. Including these with production regulatory costs brings the total to $23.65 per case, or 17.5% of production costs. Table 1 documents the categories of costs for the cooperating winery. This study is the first of its kind to document regulatory costs of a Napa County winery as well as any type of alcoholic beverage production.
Disciplines
Agribusiness
Copyright
© 2026 Hamilton and McCullough
Number of Pages
25
Publisher statement
Copyright 2026 by Hamilton and McCullough. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.
Included in
URL: https://digitalcommons.calpoly.edu/agb_fac/166