Stacking Up Stats

Exploring OLCC’s 2013 wine report with a super Q&A

By Karl Klooster

Klooster's Clusters

Karl Klooster is the associate editor of the Oregon Wine Press and writes a wine column for the News-Register in McMinnville. He became professionally involved with wine in 1972.

The following is a conversation between fly-by-night, all-things-enological wine analyst Statman and his stalwart sommelier associate Dee Canter.

Stat: You know what, Dee? This OLCC annual year-end report titled, “Gallons of Wine Removed from Bond or Imported into Oregon for 2013,” is misleading.

Dee: Holy quantifiables, Statman! You mean, figures do lie?

Stat: What I mean is it all depends on how you look at them. Figures are only accurate in relation to a given set of circumstances. If you don’t have the whole picture, they can be misconstrued, even if they are correct within a particular context.

Dee: So, what should we make of this OLCC accounting?

Stat: First, we should agree that while its title might be accurate, it’s really long and boring. Second, we should chastise this writer for not getting the story sooner. After all, the report was released Feb. 20.

Dee: I was tweeting him a few days back, and he told me he had a lot of important and time-sensitive stories in the works. Maybe he didn’t want to pass this one up, but he just couldn’t get to it until now.

Stat: Tweeting, huh? Personally, I prefer screeching. Anyway, he’s still off my A-List for invitations to the StatCave. And, boy, will he regret it. You ought to see the potables and comestibles we’ve got lined up for the next big hangout. It’ll be a corker.

Dee: Don’t you mean “uncorker?” And what’s with this “ables” and “ibles” stuff?

Stat: Wine and hors d’oeuvres, Dee. Aren’t they teaching you anything in wine guru sidekick school?

Dee: Well, certainly not over-the-top terms like your snooty generation dredges up in an effort to sound superior. Wine and food are purity of the soil, dude — something people should enjoy without pomp or pretense.

Stat: Hmmph. Just remember who’s working for whom here. But back to the OLCC report. As you can see, A to Z WineWorks/REX HILL tops the list. The company paid Oregon tax on 450,067 gallons of wine with an alcohol content of less than 14 percent alcohol, not to mention 217 gallons with an alcohol content exceeding 14 percent.

Dee: What did that come to? You know, how much did they have to shell out in cold, hard cash?

Stat: Let’s see. The Oregon tax is 67 cents per gallon for under 14 percent and 77 cents for 14 to 20 percent. Adding that up, A to Z must have paid the state $301,712 in 2013. When you include federal taxes of $1.07 and $1.57, respectively, you can add another $481,913. Don’t quote me on any of this, though. I’m just using the amounts from the report.

Dee: The Oregon Wine Press estimated A to Z’s total production for 2013 at 288,000 cases. But the OLCC says it paid taxes on 189,240 cases. What’s up with that?

Stat: OWP reported how much the winery processed last year, not how much it sold. OLCC gallonage figures reflect sales of wines from more than one vintage, not including the most recent one.

Dee: Who else ranked high on the OLCC gallonage list for 2013?

Stat: Take a look at this. Right after A to Z comes Quenett Cellars at 436,042 gallons. Next is Willamette Valley Vineyards at 240,840 gallons, then N.W. Wine Company at 130,686.

Dee: Quenett Cellars? Isn’t that The Dalles outfit that sells Copa di Vino, the prepackaged wine by the glass? A lot more of it must be getting out there than I thought.

Stat: Must be. But, I’m pretty sure most of its grapes come from California. Among the Oregon-grown gang, Domaine Drouhin Oregon paid taxes on 139,787 gallons, Firesteed Cellars on 131,556, Union Wine Co. on 123,626, Sokol Blosser on 115,302 and King Estate on 113,832. That’s everyone over 100,000.

Dee: This is confusing. These figures don’t seem to correspond at all with the total estimated annual production for these wineries.

Stat: Well, in addition to the fact the figures are based on sales, there’s an export factor. Oregon wineries don’t have to pay Oregon taxes on wine shipped out of state. So, even if they pay all the taxes they owe, their true annual gallonage isn’t reflected in the numbers. Like I said, it’s all a matter of context. These reports are only guidelines. Throw them into the mix, put it all together and hopefully something that makes sense will emerge. And remember, what we see here is only an account of the number of gallons taxed. How much income a winery generates is an entirely different matter.

Dee: You mean, the average case price of one winery’s Pinot might be $180, while another’s might run $400? Or a winery might produce three different levels of pinots, but no whites at all, while another runs about 60 percent red and 40 white?

Stat: Exactly. Or more accurately, inexactly. The fact is, unless winery owners are willing to tell you, there really is no way to know precisely what any of them are doing.

Dee: Yes, and remember, smaller wineries pay no gallonage tax at all. If they produce fewer than 30,000 gallons, they’re totally exempt. So they don’t even show up on the OLCC’s radar.

Stat: That’s about the size of it, Dee. So just keep doing the good work you’re doing by telling people how terrific Oregon wines are. Meanwhile, we’ll keep doing our best to guess what the industry is up to.

Dee: By the way, Statman, what was the bottom line on that OLCC report? How many gallons were reported altogether, and how much did the wineries pay?

Stat: The total ran 4,996,000 gallons, or 2,100,000 cases, for wine of less than 14 percent alcohol. To that, you have to add 738,899 gallons, or 310,460 cases, of wine at 14 to 20 percent alcohol, largely the fortified stuff. All told, the state collected $3,916,272 on Oregon wine. That compares to $6,505,790 for the feds.

Dee: Wow. Ten mill in taxes before the bottles even hit the shelves. And then there will be income taxes and sales taxes to pay.

Stat: There’s no sales tax in Oregon, Dee. It’s another thing that makes us a little bit different.

Note: The above Q&A was previously printed in the News-Register, OWP’s parent company. OWP Editor Hilary Berg would like to apologize for the time difference between when the report was published (Feb. 20); Karl’s writing about it in the newspaper (April 25) and now the secondary publishing of the article in OWP. (Or maybe she should explain that the writer recently had his shoulder replaced and OWP needed a piece from the Karl Klooster story bank.) In any case, it’s a timeless piece, at least until the next report comes out in February 2015.

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