Selling at the cellar door

Opinion

5 Feb

Cellar doors are a popular summer staple and provide an important connection between wine brands and consumers. Pervinder Davies explains what businesses need to know…

New Zealand’s vineyards in their picturesque landscapes have made our cellar door experiences a cornerstone of the nation’s tourism and cultural identity.

For many businesses, the sale of alcohol at cellar doors is not only a revenue stream, but also an opportunity to connect with consumers on a personal level. It is a chance for visitors to experience a wine brand in its ‘home’, and often get a behind-the-scenes look at how it is created.

In an increasingly crowded market, these points of sale have become increasingly important as a way of setting a wine brand apart from its competitors.

In this article, we look at the current landscape of wine sales at cellar doors in New Zealand, the specific responsibilities that sellers must uphold, and some potential changes ahead under proposed amendments to the current legislation.

The Cellar Door Experience:
The concept of selling alcohol at cellar doors has gained in popularity as a means for producers to create a unique and immersive experience for consumers. Visitors can engage with the craftsmanship behind the products, sample different varieties, and often learn about the production process directly from the experts.

A ‘cellar door’ is the term used to describe manufacturers, producers, and distributors of wine who offer alcohol for sale from their premises. In order to sell alcohol from a cellar door to take away, an off-licence must be held.

Current position:
Wineries can sell alcohol in several ways, not just from the cellar door. These include:

On-licence: If a winery wants to sell alcohol for people to drink on-site, they need an on-licence. They also have to offer food and low and non-alcoholic drinks.

Off-Licence: If a winery wants to sell its wine (in bottles) that visitors could take away (i.e. off the premises), then an off-licence is needed. To obtain an off-licence, the business needs to show that 85% of its revenue has come from the off-licence sales.

Remote Sales: This type of licence is needed when a winery sells alcohol via a website, over the phone, or by mail order, and then delivers it to the buyer. If a winery only has this type of licence then no visitor can buy alcohol at the winery itself.

Special Licence: If a winery wants to host an event that their regular licence doesn’t cover, like a private function or promotional event, they need to apply for a special licence.

“The concept of selling alcohol at cellar doors has gained in popularity as a means for producers to create a unique and immersive experience for consumers.”

Under the current legislation, tastings may be offered from the cellar door, but no fee can be charged. If a fee is charged, the tasting becomes a sale and an on-licence is required, meaning a winery must also offer a range of food and non-alcoholic drink options. This can be prohibitive for some smaller wineries.

Not being able to charge visitors for tastings can make the product seem less valuable, is a cost to the winery and can lower profits, and can make visitors feel like they have to buy something to show they appreciate the tasting.

The Sale and Supply of Alcohol (Cellar Door) Amendment Bill:

These issues under the current legislation have been recognised and changes have been proposed to the current law by way of the Sale and Supply of Alcohol (Cellar Door) Amendment Bill (Bill).

The Bill, if enacted, will:

- Define ‘winery’ and ‘winery cellar door’;

- Enable wineries and operators of cellar doors to charge for tastings of no more than 40mls; and

- Add a category of off-licence available to a winery holding an on-licence (similar to those available to hotels and taverns).

While the cellar door experience is meant to be enjoyable, it is necessary to operate within the boundaries of the legal framework. Ensuring that alcohol is not sold to individuals below the legal drinking age and/or to intoxicated persons is a fundamental responsibility of cellar door sellers.

Establishing clear guidelines for responsible service, such as limiting the quantity of alcohol served to an individual, is crucial to maintaining compliance. Sellers must maintain accurate records of all alcohol transactions, including the types and quantities of alcohol sold and the identification details of patrons.

By prioritising these responsibilities, cellar door establishments can create a safe and enjoyable environment for visitors while upholding the integrity of their brand and contributing to a culture of responsible alcohol consumption.

Note: Public submissions to the Justice Committee on the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill closed in September 2023.