Neighborhood wine bar closing in California? It’s a symptom of a statewide crisis

Another wine bar is closing in LA, signaling the growing crisis in one of California’s iconic industries.

The Augustine Wine Bar in Sherman Oaks, widely recognized as one of the best in the city, is shutting down after more than a decade.

The owners simply can’t make the math add up anymore.

Partly that’s because of the nature of the restaurant business, anywhere in the world, and especially in California. 

Margins are low and costs are high. Regulations and labor disputes loom. Politicians pose for pictures, then raise your taxes.

There’s also been a change in the market.

Young people drink less than they used to in previous generations. Or at least less wine.

People are still calorie-conscious, but they no longer trust the “French diet” to keep them healthy. (France has low rates of heart disease despite a diet heavy in fats, thanks in part to red wine consumption, some experts believe.) 

Instead, many Americans are turning to the new GLP-1 “wonder drugs,” which help reduce obesity — but also depress the appetite for alcohol.

And there is less alcohol portrayed in popular culture and advertising than before — just as cigarettes have almost completely disappeared from movies and television.

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But there are also problems in the wine industry as a whole, which has seen its costs rise as the heavy hand of the state has intervened. 

Farmers face new fees of $99 per acre on land that they irrigate — which, in much of California, covers just about every inch of every vineyard.

The fees are the result of a 2014 law, the Sustainable Groundwater Management Act (SGMA). 

Other input prices in winemaking are also higher. 

Fuel costs, inflated by state policies that make California’s gas the most expensive in the nation, cut deeply into farmers’ and wineries’ margins. 

So when a wine bar closes in LA, it’s not just a signal about the tough business climate in the city. It’s also a siren about the ongoing crisis up and down the supply chain.

When Hollywood loses tens of thousands of jobs, politicians push for tax credits.

When farms close down, or uproot vines, fewer people rush to help.

The wine industry doesn’t need handouts. But it needs help from state leaders to lower costs, and to make water storage more plentiful.

We cannot forget about rural California — especially when its products no longer reach our tables.