Santa Barbara Winery Challenges Mandatory 1% Sales Fee for Regional Marketing

A dispute has emerged in Santa Barbara County after Flying Goat Cellars, a winery based in Lompoc, formally challenged a new county mandate that requires wineries to pay a 1% assessment on gross wine sales. The fee, approved by the Santa Barbara County Board of Supervisors in February 2025, is intended to fund regional marketing and promotional campaigns for local wines. Under the ordinance, wineries subject to the assessment automatically become members of the Santa Barbara County Vintners Association, which manages the use of the collected funds.

Flying Goat Cellars, represented by the Goldwater Institute, argues that this requirement forces it to join and financially support a private association against its will. The Goldwater Institute sent a formal letter to the Board of Supervisors on behalf of Flying Goat Cellars, urging the county to amend the ordinance so that participation in the Wine Business Improvement District is voluntary. Adam Shelton, senior staff attorney at the Goldwater Institute, stated that if the county does not revise the ordinance, legal action may follow. He cited Supreme Court rulings that prohibit government from compelling individuals or businesses to subsidize speech with which they disagree and argued that forced association violates constitutional rights.

The Wine Business Improvement District was created with support from several city councils in Santa Barbara County, including Santa Maria, Solvang, Buellton, Guadalupe, and Goleta. Lompoc initially opted out but later reversed its decision to support the plan. The program is projected to generate about $1.65 million annually over five years. The funds are directed to the Santa Barbara County Vintners Association for coordinated marketing efforts aimed at raising the profile of Santa Barbara wines and supporting local producers.

Norm Yost, founder of Flying Goat Cellars, said he does not oppose collaboration or marketing but objects to being required to participate and fund an organization he did not choose. Co-owner Kate Griffith described current conditions as challenging for small wineries and said that additional fees increase financial pressure on independent operators. She noted that many wineries are already facing rising costs and increased competition.

County officials have defended the creation of the Wine Business Improvement District as a necessary step to strengthen regional branding in an increasingly competitive market. They argue that coordinated marketing can help local wineries attract more visitors and boost sales at tasting rooms throughout the county.

The Goldwater Institute is a public policy think tank based in Phoenix with a focus on defending constitutional freedoms through research and litigation. Its legal team has argued that both the First and Fifth Amendments are implicated by the county’s ordinance.

The Santa Barbara County Vintners Association is a nonprofit organization founded in 1983 to promote and protect Santa Barbara County as a wine region. It organizes festivals, educational events, tastings, and advocacy efforts for its members.

The new fee applies to wine sold directly to consumers at tasting rooms across Santa Barbara County starting April 1, 2025. Supporters believe it will help elevate the region’s reputation and benefit local businesses by attracting more tourism and consumer interest.

As of now, Flying Goat Cellars continues to press its case against the mandate. The outcome could have implications for how similar marketing districts are structured in other regions where independent businesses are asked or required to participate in collective promotional efforts. The county has not yet indicated whether it will consider amending or repealing the ordinance in response to these concerns.