A Santa Barbara County winery, Flying Goat Cellars, has formally challenged a newly approved wine marketing mandate that requires wineries to pay a 1% assessment on gross sales and has threatened legal action against the county.
The winery argues that the policy forces it to fund and join a private association, which it says violates its constitutional rights.
The challenge is being led by the Goldwater Institute, which sent a formal letter to the Santa Barbara County Board of Supervisors on behalf of Flying Goat Cellars.
What is the Dispute?
At the center of the dispute is a mandate requiring wineries to pay a 1% assessment on gross sales and become members of the Santa Barbara County Vintners Association. Flying Goat argues that the requirement compels it to fund and associate with a private organization against its will.
In its letter, the Goldwater Institute urges the county to amend the ordinance so that participation in the Wine Business Improvement District is voluntary.
Senior Staff Attorney Adam Shelton warned that if the county does not revise the ordinance, further legal steps could be taken, adding, “The Supreme Court has made clear that the government cannot force Americans to subsidize speech they disagree with.”
He also stated that individuals and businesses have a right not to be compelled into private associations.
The conflict arose after the Santa Barbara County Board of Supervisors approved the Santa Barbara County Wine Improvement District in February 2025. The district imposes a 1% assessment on qualifying gross wine sales to fund regional advertising and promotional campaigns.
Under the ordinance, wineries subject to the assessment automatically become members of the Santa Barbara County Vintners Association, which oversees how the collected funds are used. The program is projected to generate approximately $1.65 million annually.
Goldwater argues that the mandate violates the First Amendment by compelling speech and forced association, citing Supreme Court rulings that prohibit the government from requiring individuals or businesses to finance speech with which they disagree.
The Goldwater Institute also argues that the ordinance raises concerns under both the First and Fifth Amendments of the U.S. Constitution.
Challenging Times for Wine Industry Cited
Flying Goat Cellars has operated in Lompoc for more than 25 years and describes itself as an independent producer built through sustained effort.
Founder Norm Yost said he does not oppose collaboration or marketing but objects to mandatory participation, adding that he wants to run his business and connect with customers on his own terms.
Co-owner Kate Griffith described the current period as one of significant strain for the wine industry and said the added fee increases financial pressure on smaller wineries.
County officials have said the Wine Business Improvement District was created to strengthen regional branding and promote Santa Barbara County wines in a competitive market. Supporters view it as a tool to support local producers through coordinated marketing.
Wineries across California are facing rising costs, increased competition, and changing consumer habits, placing added stress on independent operators.
Who’s Involved?
The Goldwater Institute is a conservative and libertarian leaning public policy think tank based in Phoenix, founded in 1988 with support from former U.S. Senator and Republican Presidential candidate Barry Goldwater. Its stated mission is to defend and strengthen the freedoms guaranteed by the U.S. and state constitutions.
Originally focused on research, the institute added a litigation arm in 2007, becoming the first state-based policy group to do so. The Scharf-Norton Center for Constitutional Litigation pursues lawsuits against government entities across the country.
The Santa Barbara Vintners (Santa Barbara County Vintners Association) is a 501(c)(6) nonprofit founded in 1983 to protect and promote Santa Barbara County as a leading wine and grape region. Its membership includes wineries that produce at least 75% Santa Barbara County–labeled wines, along with a broad range of industry partners. The association organizes festivals, educational seminars and tastings, provides information to consumers, trade, and media, and advocates for the county’s wine industry.
In February 2025, the county Board of Supervisors unanimously approved a Wine Business Improvement District, creating a 1% assessment on wine sold directly to consumers at tasting rooms countywide starting April 1, 2025. Projected to raise $1.5 million annually for five years, the measure won support from city councils in Santa Maria, Solvang, Buellton, Guadalupe, and Goleta, with Lompoc reversing an initial opt-out to back the plan. Funds will flow to the Vintners Association to expand countywide marketing efforts—particularly affecting tasting rooms, including those in the Funk Zone—aimed at elevating the region’s profile and boosting the local economy.
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This progressive agrees with this lawsuit’s claims. There is no reason why the wineries/growers cannot create a voluntary organization and assess the members to create this slush fund. They have no equitable right to charge others who do not want it. Remember the wineries tried a few years ago to create a tax on tasting room receipts for this purpose (as I recall) and that was stopped. This replaced that effort as certain winery owners have strong political connections.
good luck, I hope you prevail!!!
When will accumulative taxation be too much? When?? Will any payer of the tax say, well I think that a 34.975 tax is too much so I’ll not buy the thing? I mean when? Questions to ask yourself: Why do taxes go up? Is there any theoretical ceiling? What happens if they don’t raise the tax rate? What happens if they don’t sell that bond to the dummies? What happens when the money runs out? Can the money ever run out? I dare you, ask yourself these things. What you got for answers?
Entertaining actually. Who is less needed – the bloated County government or the endless number of wineries that have taken over at land that used to be used to feed people? Tough call. I’d say the County bloat should be in the chopping block, not private enterprise. Endless increases in taxes in CA is getting old.
Endless con victim whines are getting old.