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Thursday, January 18, 2007

Money Grows on Vines: Grapes Have a $162 Billion Impact on the U.S. Economy

The next time you use a corkscrew you will be adding to one of the most vibrant sectors of the United States economy. According to figures released this week in Washington, D.C., by MKF Research LLC of Napa Valley, wine, grape and grape products industries contribute more than $162 billion annually to the American economy.

The MKF Research report, "The Impact of Wine, Grapes and Grape Products on the American Economy: Family Businesses Building Value," looked at the economic impact of the grape, wine, grape juice, table grape and raisin industries. It measured employment, agricultural statistics, product revenues, tax collections and other factors.

The study found the industry supports 1.1 million full-time jobs and that 23,856 grape growers have 934,750 acres under cultivation as vineyards. In 2005, there were 4,929 wineries operating in the U.S., up from 2,904 in 2000. In addition to producing wine, the wineries also are a generator for tourism revenue, with 27.3 million annual wine-related tourist visits counted by the study. The industry also pays its fair share in taxes, $17.1 billion overall, including $9.1 billion in federal and $8 billion in state and local taxes.

The report noted that the industry does face challenges because of a lack of funding for research and education, a lack of skilled labor, difficult access to capital for start-up or expansion, a competitive wine market because of low cost imports and regulations that limit market access.

The study was funded by a number of industry trade organizations.

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