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New Immigration Policy Points to Higher Wine Prices

Crackdown on illegal workers will force California growers to consider higher priced alternatives for vineyard labor

Daniel Sogg
Posted: August 28, 2007

No one can yet gauge all the social and economic effects of U.S. immigration policy reform, still in limbo after Congress failed to agree on a reform bill last session. But new regulations announced in August by the Department of Homeland Security will likely mean one thing for wine lovers: The price of California wine is going to rise.

The new immigration policy, announced by Homeland Security chief Michael Chertoff, involves a more vigilant watch of the Social Security numbers and other information provided by workers to their employers. Where there are discrepancies or invalid information, employers must fire the workers or face fines of as much as $10,000.

Due to the very nature of this issue, precise figures are unavailable, but no one disputes that illegal aliens make up a significant portion of the 50,000 employees required to produce California wine. "Because of where we are, [bordering Mexico], and the number of people we use in California, I'd say a figure of 70 percent [illegal workers] might be on target," said Karen Ross, president of the California Association of Winegrape Growers, a Sacramento-based advocacy organization.

"This will have a dramatic impact going forward," said Pete Opatz, viticulturist at Vino Farms, a vineyard-management company that farms 5,200 acres in Napa and Sonoma for 80 clients that include Darioush, Patz & Hall and Silver Oak.

While the rules prohibiting the hiring of illegal aliens have long existed in the United States, enforcement has been inconsistent. Though the new rules, called No-Match Regulations, will have no impact on the 2007 vintage, currently underway, vineyard work occurs year-round. Pruning, which requires especially skilled workers, occurs in winter—soon after employers will have to fire illegal workers. And spring and summer are the seasons for labor-intensive canopy-management practices.

Pete Richmond, owner of Napa-based Silverado Farming Company, farms 300 acres for wineries such as Araujo, Harlan and Dave Ramey. With the new rules about to take effect, his expansion plans are on hold. "In our company we're going to stay status quo. We're not growing our acreage, not getting new accounts, because we don't know if we'll have the labor to do the work," he said.

Some industry professionals said they expect to see additional mechanization in regions such as Napa. Others surmise that employers will explore the feasibility of guest worker programs, or simply bypass federal authorities by paying illegal workers in cash.

Whatever the ultimate resolution, producers anticipate major changes in the industry. "I think the stuff is going to hit the fan and the employers of California will have to adjust," says Opatz.

And it's consumers who'll likely be picking up the tab. "Over time, wine prices follow costs," said Daniel Duckhorn, CEO and chairman of Napa-based Duckhorn Wine Co. Labor accounts for a major portion of the operating costs of wine production, he explained, adding, "It's a given that if costs increase, wine prices will go up."

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