Flying Leap Vineyards co-owner Mark Beres operates four tasting rooms for his Elgin-based winery. The new state farm winery license requirements limits wineries to two tasting room/retail operations.

Mike Christy / Arizona Daily Star

Arizona wineries that do not produce wine or grow grapes will no longer be allowed to operate under a state farm winery license.

State lawmakers last Wednesday approved Senate Bill 1397, a sweeping rewrite of the Series 13 farm winery license criteria that requires wineries to manufacture wine on site or produce it from fruit grown on at least five acres of land they own or lease.

Wineries have until Jan. 1, 2019, to come into compliance or lose their Series 13 license.

“We have all these business models operating out there and there really was a need to define what is a farm winery,” said Peggy Fiandaco, president of the Arizona Winegrowers Association, which lobbies on behalf of the state’s wine producers and vineyard operators.

The association worked with the Arizona Department of Liquor Licenses and Control to draft the changes. Rod Keeling of Keeling-Schaefer Vineyards in Pearce said the liquor board wanted to rein in the businesses that were operating under the farm wine license but were not really wineries.

The winegrowers association said the state has 83 licensed and bonded wineries — operations that have federal and state licenses to produce wine. Yet the state has issued 92 Series 13 domestic farm winery licenses, according to state liquor license records.

“There were so many business models that didn’t look like wineries,” said Keeling, who worked on the legislation.

The revamped Series 13 license requires that a winery obtain a federal liquor license and produce 200 gallons of wine on premise and have no more than two tasting rooms/retail operations per licensed vineyard.

That limit could pose a problem down the road for Flying Leap Vineyards, which has vineyards in Elgin and Willcox and operates four tasting rooms — one attached to its Elgin winery, one in Willcox, one in Bisbee and one in St. Philip’s Plaza that opened in February.

Flying Leap co-owner Mark Beres said he and his partners have nearly five years to decide if they will close any of their tasting rooms, get a wine-bar license or open a second licensed winery in Willcox, which would give them two more tasting rooms.

 “We’re in an enviable position because we’ve got vineyards in two counties," he said. "We may need to open another winery because we are producing so much fruit.”

It costs $200 to get a domestic farm winery license and $170 to renew it each year; a beer and wine bar license is purchased on the open market through a broker or lottery system, which means the price could run as much as $10,000 to $15,000, Keeling said. And those licenses are often in short supply since the state limits the number it issues.

Senate Bill 1397 meanwhile shot down proposed amendments to the craft brewing license that would have doubled the amount of beer a brewer could produce under the current license. Brewers had wanted a 40,000 gallon cap, but lawmakers would not budge on the current 20,000 gallon limit.

Brewers did get one concession: they can now sell growlers made out of stainless steel and ceramic. The current license structure limited them from using any material other than glass. 

The new liquor license requirements go into effect in July.

See the full story in Monday's Star.