Senate select committee hears warnings on steep demand slide and rising costs for California wine industry

The California State Senate’s Select Committee on the State of the Wine Industry convened in Napa to hear testimony from academics, industry groups and state regulators about a sharp downturn in demand and mounting cost pressures facing growers and wineries.

Chair Senator Christopher Caballon opened the hearing and framed it as a learning session rather than a venue for votes. He told attendees the committee sought "the real stories" from growers, researchers and local leaders about causes and possible policy responses.

Damien Wilson, faculty director of the Wine Business Institute at Sonoma State University, told the committee that the sector is in “profound structural change,” noting in his briefing memo that the local wine industry is “worth almost $80,000,000,000 to the Californian economy.” He urged a strategic pivot toward new consumer acquisition, more accessible product lines and evidence‑based decision making.

Chris Bitter, a wine economist, said California wine sales have fallen about 25% since 2019, that LA Grape Growers estimated 20% of the 2025 crop went unpicked because buyers could not be found, and that growers have retired more than 50,000 acres between 2023 and 2025. Bitter attributed the pressure to falling domestic demand, lost export markets and rising production costs.

Speakers from growers’ groups and the Wine Institute emphasized both short‑term relief and longer‑term industry changes. Michael Miller of the California Association of Wine Grape Growers said nearly 100,000 acres of vineyard have been removed since 2023 and warned that removing and replanting acreage carries large costs and regulatory obstacles.

Industry and academic witnesses urged more public and private investment in viticulture and enology research and workforce development. Ben Mompetit (UC Davis) and others warned of disease and climate threats—citing examples like Pierce’s disease and powdery mildew—and said California lacks state or federal programs focused on enology research at scale.

State officials described existing regulatory efforts. Annalisa Keyhar of the State Water Board reviewed the winery general order adopted in 2021, explained the four‑tier enrollment approach and said the board has enrolled 56 wineries with 122 under active review; she emphasized the board’s intent to balance statewide consistency with regional flexibility.

Speakers also raised tourism and labor concerns. Lindsay Gallagher of VISIT Napa Valley said visitor spending still contributes billions and thousands of jobs to the valley but noted international visitation—particularly from Canada—has fallen, amplifying local economic stress. Sonia DeLuca of the Napa Valley Farmworker Foundation described a concentrated farmworker population in Napa and urged targeted relief, wage‑loss support, and continued bilingual workforce training.

Public commenters and growers urged regulatory reviews, faster access to relief, and attention to insurance and contract remedies for growers facing canceled grape contracts. Several witnesses warned that rapid or blunt policy actions (for example, tariffs) can produce unintended damage to export markets.

The committee concluded the session without votes and said it would continue working with stakeholders through the year to convert hearing findings into policy options and oversight work.