California regulations limit wine producer access to farmers' markets
Summary: California’s restrictive farmers’ market regulations prevent thousands of local wine and craft beverage producers from participating, but a straightforward legislative update could transform these markets into true celebrations of the state's diverse agricultural heritage.
Every weekend across California, over 700 certified farmers' markets burst with local produce, artisanal foods, and craft goods. These marketplaces showcase the best of California's 3,000 small farmers and countless local businesses. Yet amidst the fresh produce and handcrafted goods, there's a conspicuous absence: California's wine industry. Despite being home to over 6,000 wine brands, most of them small producers crafting fewer than 5,000 cases annually, these local wine brands are largely missing from farmers' markets. The reason? A piece of legislation from 2000 that introduced the Type 79 license.
A brief history of the Type 79
In 2000, California's approach to wine sales at farmers' markets was fundamentally shaped by the passing of AB 2520 (Thomson). This legislation created the Type 79 license, with a notably specific scope:
Type 79 - authorize the licensee, under a winegrower’s license (Type 02), to sell wine produced and bottled by the winegrower entirely from grapes grown by the winegrower at a certified farmers’ market at a place in the state approved by the department.
The original vision seemed aligned with farmers' market principles. Estate-grown wines, like the fresh produce surrounding them, would represent local, small-scale production. For small wineries struggling to secure retail shelf space, these markets promised a valuable direct-sales channel.
Proponents of the bill include the sponsor, Family Winemakers of California, while opposition came from Wine & Spirits Wholesalers of California, Southern Wine & Spirits of America, and Youngs Market Company, under the grounds farmers’ market sales would circumvent the wholesalers role in the three tier system and that wineries, at that time, had sufficient opportunities to sell their products.
In 2014, the Type 79 license was updated by way of AB 2488 (Levine), allowing wineries to offer samples, a crucial change recognizing that customers prefer tasting wine before purchasing. During these discussions, lawmakers considered including cider producers under the license's umbrella, but this proposal stalled at first reading.
These two decades-old decisions, from 2000 and 2014, continue to define wine sales at California farmers' markets today, even as the craft beverage landscape has dramatically evolved.
The devil is in the details: Understanding Type 79's limitations
At first glance, the Type 79 license appears logical and a straightforward permit for selling wine at farmers' markets. Yet despite offering access to a lucrative market of local-focused consumers, only 165 active Type 79 permits exist in California, representing a mere 2.8% of the state's vibrant wine industry. This surprisingly low participation isn't due to lack of interest, it's because the license's strict requirements and enforcement exclude many modern producers.
Furthermore, the very existence of the Type 79 as a separate license category exemplifies the broader problem with California's regulatory framework. Rather than streamlining existing permits, regulators continue creating new, highly specific license types, each with their own restrictions. These farmers’ market privileges could have been simply added to existing licenses, creating a more accessible system for producers.
The first Type 79 restrictions begin with license eligibility. Only those holding a California Type 02 Winegrower license can apply:
Type 02 - A winegrower must have facilities and equipment for the conversion of fruit into wine and engage in the production of wine.
There is a lot to unpack in this statement.
This seemingly simple requirement creates significant barriers. While California has nearly 5,000 active Type 02 permits, it's also home to a growing number of "virtual wineries", innovative producers operating under a different license combination known as the 17/20 combo. Over 1,000 businesses use this arrangement.
Type 17 – Beer and Wine Wholesaler – permits incidental sales to other supplier-type licensees.
Type 20 – Off-Sale Beer and Wine - Authorizes the sale of beer and wine for consumption off the premises where sold.
These virtual wineries, often industry innovators bringing exciting new products to market through custom crush facilities, are automatically excluded, immediately barring about 17% of California wine brands from farmers' markets.
Second, consider the case of California cideries. While they operate under a Type 02 license, which permits 'the conversion of fruit into wine', they're excluded from farmers' markets by a single word in the Type 79 license: 'grapes.' Though apples are fruit and cider is technically wine under Federal and California law, the Type 79's grape-specific language creates an impossible barrier. This same grape-specific language excludes meaderies, honey wine producers, and creators of co-fermented beverages, even if all raw materials are from their estate.
Lastly, the requirement that wine must be made "from grapes grown by the winegrower" excludes numerous craft winemakers who source their fruit from small, family-run vineyards. These businesses, who often don’t have their own land but maintain close relationships with local growers, find themselves shut out of farmers' markets.
Expand the scope of Type 79
In 2024, broadening the Type 79 license presents a clear, non-controversial opportunity to strengthen California's craft beverage industry.
When originally crafted, the license addressed a simpler landscape of 1,450 wine producers. Today, California's industry has transformed dramatically, tripling to 6,365 bonded wine producers and welcoming hundreds of innovative virtual wineries each year. Meanwhile, the distribution sector has moved in the opposite direction. Consolidation among wholesalers has created an ever-narrowing pipeline to retail shelves, making traditional market access increasingly challenging for small producers. This simultaneous expansion of producers and contraction of distributors makes the need for alternative sales channels more crucial than ever.
While the original legislation's narrow focus on estate-grown grape wines may have made sense in 2000, it now unnecessarily constrains California's diverse wine community. Modern producers are crafting exceptional beverages through co-fermentation, fruit wines, and wine-based ready-to-serve products. These creators deserve the same market access as traditional estate wineries.
A straightforward solution is to expand Type 79 eligibility to include 17/20 license holders and broaden the definition beyond estate grown grape wines.
With minimal regulatory effort, we could bring an abundance of new and local products to farmers’ markets, capturing a new audience of buyers and beginning to reverse the declining trends we see across the industry.
A producer’s story of being banned
I was recently speaking to a California producer, who was applying for a CA Type 79 for their business and here is their harrowing experience. These limitations on the license have real consequences and can be make or break for small up-and-coming businesses.
Since we do fruit wine and mead, a lot of California ABC laws wording don't really encompass a small winery like ourselves, so we feel we miss out on opportunities. For example, we are not allowed to participate in the Certified Farmers’ Market because originally, it was for grape wineries only. If you grow your grapes, you're allowed to participate. We do fruit wine and mead. There's no way we can grow all of the various fruits we process and ferment. And we don't do beekeeping, yet. We are new and different, so a lot of the current regulations and laws' wordings don't benefit us.
Here you have to understand the bigger wineries do grow some of the fruit, but these are also not the wineries that are attending farmers' markets, although maybe they would if others did as well.
Imagine a vibrant farmers’ market with a section for local adult beverage producers to share their products. Name a better pairing with fresh local produce than a fresh local adult beverage. It’s a match made in heaven.
The California producer continues:
Under TTB COLA, mead AND fruit wine are considered "other wine". Most of the fruit we process is from local farmers and folks who have excess fruit that are overripe or "ugly", and usually organic. So while we rescue these fruit from otherwise being thrown away or composted, we buy from them for our wines and meads at a discounted bulk rate, allowing us to keep our costs down, and ultimately our prices down for consumers. We purchase honey only from certified beekeepers.
Here is the latest rejection notice from the ABC. While they are the enforcement agency and are not at blame, it’s a shame to see such a transactional nature for something that is so important to the producer and the overall success of the adult beverage industry.
A simple fix and a great future
California's craft beverage industry needs a straightforward legislative update: amend the Type 79 license to embrace all wine producers, both physical and virtual, who craft beverages from fruit or honey, whether estate-grown or sourced from local suppliers. Grape based wines have had a 9 year head start – let's help our other craft wine, cider, fruit, and mead producers and open up this definition.
The precedent for such change already exists. In 2015, a new license, CA Type 84, was created to allow beer producers to sell their products in farmers’ markets. The license does not allow tastings however it does not have the same stipulations of using all local ingredients to qualify for the license.
This statute [CA Type 84] is different for beer manufacturers than it is for most wine makers. If all of the winemaker’s ingredients are local, they are allowed to participate in the Certified Growers Market section of the event. Because wine makers must be certified to show that they have used only locally grown ingredients they are required to obtain a Department of Agriculture Certified Producer Certificate. Beer manufacturers do not have all locally grown ingredients and therefore are not required to obtain this certificate. Because of this beer manufacturers are required to only sell beer in the community event area of the farmers’ market (where prepared foods such as breads, cookies, jams, etc. are sold).
Beer producers sell their products in the food section of the market and have to be accepted into the market by the farmers’ market. Even if a beer producer is approved for the Type 84, they do not automatically get access, whereas if a wine producer gets a Type 79, they receive automatic access to a farmers’ market.
Importantly, expanding Type 79 eligibility wouldn't diminish farmers' market integrity. Wine producers would still need to obtain their Department of Agriculture Certified Producer Certificate, maintaining the high standards these markets are known for. The key difference? More local producers could participate.
This restrictive licensing isn't just an inconvenience, it's actively hampering industry growth. While California's craft beverage sector bursts with innovation, outdated regulations continue to create artificial barriers.
We do not need such narrow definitions, our legislators and regulators are literally killing the industry because they never ask “why” and “what ripple does this create”. It is up to the industry to push for change in these areas. While we can't alter consumer preferences overnight, we can remove unnecessary barriers that have constrained our industry for nearly a century.