Oregon Legislature Takes Up Cider Bill

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For several decades in Oregon, production of alcoholic beverages has firmly occupied the shifting regulatory border between agricultural and commercial uses, the latter of which Oregon law discourages or prohibits on agricultural land. In 1989, the Oregon Legislature passed a law allowing wineries of certain sizes in Exclusive Farm Use (EFU) zones.  Nearly 30 years later and in the midst of a nationwide boom in hard cider consumption and enthusiasm, the Legislature is poised to do the same for cideries.

Production of apples and pears for cider is a farm use and generally unregulated on EFU land. However, establishing a cider production facility on EFU land is not straightforward.  To do so, a cider owner usually must obtain a conditional use permit for a “commercial activity in conjunction with a farm use,” which involves substantially more process, expense, and risk than permitting a winery does, even though the production process is very similar.  Senate Bill 677 would essentially replicate for cideries (called “cider businesses” in the bill) the regulatory scheme currently applicable to wineries.

If enacted, SB 677 would allow two classes of cideries on EFU and mixed farm and forest lands: those producing less than 100,000 gallons, which require a minimum 15-acre orchard, and those producing more than 100,000 gallons, which require a minimum 40-acre orchard. This acreage can be owned or rented by a cidery, or can be the source of fruit purchased by a cidery, but in all cases must be contiguous to the cider business.  Like the definition of “winery” in Oregon law, the definition of “cider business” in SB 677 is fairly broad, and includes the production, bottling, storage, distribution, wholesale or retail sales, and tasting of cider, among other things.

In addition to allowing cider businesses themselves, SB 677 provides for a range of accessory activities, including associated food services such as cider maker’s dinners, bed and breakfasts, and up to 18 days of agri-tourism events per calendar year (which requires additional county approval in most cases). Sales of incidental, non-cider items are allowed to generate up to 25 percent of a cidery’s gross income.

So far, SB 677 has faced little to no opposition in the Legislature. It has been supported by the NW Cider Association, Friends of Family Farmers, and the Association of Oregon Counties.  The bill easily passed the Senate without opposition and will likely do the same in the House.  The new law will certainly be an improvement on the status quo for cideries on rural land, which have had to use a variety of permitting strategies depending on where they are located and what their operations entail.

However, the bill is not perfect. A 15-acre orchard may seem small, but as the price of agricultural land in the Willamette and Hood River valleys continues to increase, many nascent cideries and aspiring cider makers may find it difficult to assemble enough land to meet the minimum orchard size requirement.  This could leave many aspiring cideries in the bizarre position of having to go through a much more rigorous permitting process than what would be required to establish a larger cidery.  A better bill would require a smaller amount of contiguous acreage and allow the remaining acreage requirement to be met through the open-sourcing of fruit from agricultural land that may not be contiguous to the cidery itself.  This would not only provide additional flexibility for cider makers, but would further expand the market for Oregon’s orchardists, many of whom are already moving to dense, high -yield planting to maximize limited acreage‎.  Although SB 677 is certainly an improvement for the industry, cideries with very small orchards will still have to contend with the challenges of the existing regulatory scheme.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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