(The Center Square) – The South Carolina House endorsed a Senate bill Tuesday granting E & J Gallo Winery, the nation’s largest winemaker, an exception in state law to operate wine-tasting rooms.
Senate Bill 619 was approved in a 98-11 vote by the House and kicked back to the Senate for a procedural affirmation before being dispatched to Gov. Henry McMaster's desk, who has called on lawmakers to adopt the legislation and is certain to sign it.
The bill, filed by Sen. Luke Rankin, R-Horry, and four co-sponsors, passed the Senate on April 8 in a 31-6 vote.
Granting the exception in state law to allow Gallo to open three off-site tasting rooms in the state is a critical concession in allowing the California-based wine giant to move ahead with its plan to build a $400 million bottling and distribution center in Chester County.
The 640-acre site will serve as Gallo’s East Coast operations center and will create nearly 500 family wage jobs in Fort Lawn, a job-hungry former textile mill town.
The plant will open as a 5-million-square-foot warehouse, but Gallo eventually plans to bottle wine at the site, adding about another 500 jobs.
Wineries, breweries and distilleries can’t serve food or other kinds of alcohol with their products on premises under South Carolina law. Tastings are limited to 3 ounces a person, only permitted as part of tours and are prohibited after 7 p.m. and on Sundays.
SB 619 amends the same 1976 state law affecting distilleries, breweries and wineries addressed in Senate Bill 479, filed by Sen. Sean Bennett, R-Dorchester, and House Bill 3769, filed by 17 co-sponsors. Neither have advanced in committees.
SB 619 would allow distilleries, breweries and wineries “to establish satellite locations for sale of their products.”
Gallo can open three tasting rooms across the state, with no more than one per county, under SB 619. It can sell only wine and only six bottles to each customer – which must be bought through state-licensed wholesalers – and the rooms must close by 5:30 p.m.
Opponents argued allowing Gallo to sell products in tasting rooms would hurt retailers. Wholesalers, retailers and several other South Carolina wineries called SB 619 the “Gallo Giveaway” because they claim it gives an out-of-state corporation unfair advantages.
With an estimated $5 billion in annual sales, Gallo controls about 22% of the nation’s wine market – 40% in South Carolina – and, therefore, doesn’t need incentives to build a plant east of the Mississippi River, opponents said.
“It’s a basic principle of conservatism that we don’t pick winners or losers. We try to set up a level playing field,” Sen. Richard Cash, R-Anderson, said during an April hearing on SB 619. “This is certainly not a level playing field. We’re changing a law for this company.”
Proponents argued a $400 million investment in an old mill town that could create 500 to 1,000 jobs within a few years is too good a deal to pass up.
“I think the market picks those winners and losers. Depends on what the demand is,” said Sen. Penry Gustafson, R-Kershaw. “If they want to come here, that’s good. I think choices are good. I’m a capitalist at heart and welcome them and any other company that wants to come here.”