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Study: U.S. wine industry chips in $162 billion a year

WASHINGTON—Drink up. It's good for the American bottom line.

The U.S. wine and grape industry pours more than $162 billion annually into the nation's economy, according to a first-of-its-kind study released Wednesday. That counts jobs, sales, taxes and indirect benefits: the whole kit and caboodle.

And although California is the far-and-away leader, with 2,275 bonded wineries and 800,000 grape-planted acres, other states are moving up.

"This is something that reaches across all 50 states, and it's tremendously important to those states," said Democratic Rep. Mike Thompson, who represents California's Napa Valley.

The 30-page study, commissioned by the wine industry, is the first to tally the wine and grape story in all states. Potentially, it also surpasses mere academic interest.

Prepared by MKF Research, the analysis is replete with figures that wine-friendly lawmakers hope will pique congressional interest. For instance:

_ The number of U.S. wineries increased to 4,929 in 2005, up from 2,904 in 2000.

_ Members of the wine and grape industry pay a total of $17.1 billion in state and federal taxes annually.

_ About 1.1 million jobs nationwide rely on wine and grapes.

_ Some states are picking up speed, viticulturally speaking. In North Carolina, for instance, the number of grape-bearing acres increased to 1,300 in 2005, up from 850 acres in 2002.

The study's political bouquet was immediately apparent, in the industry's decision to uncork it on Capitol Hill

Thompson and his Congressional Wine Caucus allies were to distribute the study Wednesday night at a reception for newly elected House members. Thompson co-chairs the caucus along with Rep. George Radanovich, R-Calif.

The 250-member wine caucus is one of the largest in Congress. Reinforced by trade groups such as the Wine Institute and Winegrape Growers of America, which helped fund the new study, the caucus periodically hosts social events such as Wednesday's reception. The studies and the socializing, in turn, are supposed to build support for specific legislative goals.

"We can really do some things that will help with the industry's growth," Thompson said.

Research is one priority, as wine-state lawmakers push for money to dig into vine-killing Pierce's disease and other threats.

Conservation funding to preserve farmland will be another front, as Congress rewrites a broader farm bill. The wine and grape industries are also part of a much larger specialty-crop coalition that's seeking a bigger piece of federal farm spending.

"We can't do much about the weather," said Jim Bedient, a New York grower and the chairman of the Winegrape Growers of America, "but the business climate is largely shaped by our public officials."

Dollar by dollar, the direct impacts add up. For instance, nationwide winery sales total $11.2 billion a year. Wineries spend $80 million a year on advertising, $40 million on stainless steel tanks and $573 million on glass bottles.

Wine tourism adds another $3 billion in annual spending, as Americans flock to hot spots such as the Napa and Sonoma valleys. California alone claims more than 19 million wine tourists a year.

Pennsylvania, Texas and North Carolina all record more than 800,000 wine-related tourist visits annually.

"It really is interesting how wine is generating a new kind of tourism," researcher Barbara Insel said.

Some of the tallies may be unexpected, such as the $128 million in annual charitable contributions that the wine and grape industry makes.

More than half of the $162 billion counted in the study comes from indirect or induced economic benefits. These are calculated through a formula that only economists could appreciate.

For instance, purchases by wineries create jobs in the electricity industry. This counts as an indirect effect. Induced effects occur when winery workers spend their money in their communities.

The wine-industry report is available online at http://www.wineinstitute.org/industry/statistics/2006/docs/mfk(underline)us(underline)econ(underline)report07.pdf

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(c) 2007, McClatchy-Tribune Information Services.

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