A. For Class I farm winery licensees, all of the fruits or agricultural products used by the licensee to manufacture wine shall be grown or produced on the licensed premises. Class I farm winery licensees shall have on the licensed premises a growing area no smaller than one and one-half acres that produces fruits or agricultural products used to manufacture the wine of such farm winery. Class I farm winery licensees shall ferment on the licensed premises no less than 2,250 liters of wine per year, and all of the wine sold by such licensee shall be fermented on the licensed premises.
B. For Class II farm winery licensees, at least 51 percent of the fruits or agricultural products used by the licensee to manufacture wine shall be grown or produced on property in the Commonwealth that is owned or leased by the licensee and no more than 25 percent of the fruits or agricultural products used by the licensee to manufacture wine shall be grown or produced outside the Commonwealth. Class II farm winery licensees shall have on the licensed premises a growing area no smaller than three acres that produces fruits or agricultural products used to manufacture the wine of such farm winery.
C. For Class III farm winery licensees, 75 percent of the fruits or agricultural products used by the licensee to manufacture wine shall be grown or produced in the Commonwealth. Class III farm winery licensees shall ferment on the licensed premises no less than 4,500 liters of wine per year, and no less than 75 percent of the wine sold by such licensee shall be fermented on the licensed premises.
D. For Class IV farm winery licensees, 75 percent of the fruits or agricultural products used by the licensee to manufacture wine shall be grown or produced in the Commonwealth. Class IV farm winery licensees shall have on the licensed premises a growing area no smaller than 10 acres that produces fruits or agricultural products used to manufacture the wine of such farm winery. No Class IV farm winery license shall be issued to any person that has not operated under an existing farm winery license for at least seven years.
E. A farm winery licensee may trade with other farm winery licensees fruits or agricultural products grown or produced on property in the Commonwealth that is owned or leased by such farm winery licensees. For the purposes of this section, fruit or agricultural products traded or exchanged between farm winery licensees shall be considered grown or produced on the licensed premises of the receiving licensee for the purposes of meeting the fruit sourcing requirement in subsections A, B, C, and D, provided that verification is provided to the receiving licensee that the fruit or agricultural products traded or exchanged were grown or produced in the Commonwealth by the farm winery licensee engaging in such trade or exchange. Both licensees shall maintain complete and accurate records of the quantity and source of any fruit or agricultural products traded or exchanged. Such trades or exchanges shall be bona fide transactions based on the fair market value of the fruits or agricultural products traded or exchanged. For the purposes of this subsection, “agricultural products” means the raw materials used or intended to be used in the manufacture of wine or cider by farm winery licensees.
F. Notwithstanding the provisions of subsections A, B, C, and D, upon petition by the Department of Agriculture and Consumer Services, the Board may permit the use (i) of a greater quantity of out-of-state products if supplies grown or produced in the Commonwealth are insufficient for a farm winery licensee, whether Class I, Class II, Class III, or Class IV, to achieve the level of production that otherwise could be anticipated during a given license year or (ii) by a Class I, Class II, or Class IV farm winery of a lesser percentage of products grown or produced on the licensed premises or on property in the Commonwealth that is owned or leased by the licensee, as applicable, if unusually severe weather or disease conditions cause a significant reduction in the availability of fruit or other agricultural products grown or produced on such property to manufacture wine during a given license year.
G. As used in this section, the phrase “property in the Commonwealth that is owned or leased by the licensee” shall include, in the case of a cooperative licensed as a farm winery, any property in the Commonwealth that is owned or leased by a member of such cooperative.