ZAFA Wines Obtains Licenses to Make and Sell Wine — With Conditions | Food News | Seven Days | Vermont's Independent Voice

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ZAFA Wines Obtains Licenses to Make and Sell Wine — With Conditions


Published March 24, 2021 at 10:00 a.m.
Updated March 25, 2021 at 5:22 p.m.

  • James Buck/File ©️ Seven Days
  • Krista Scruggs
The Vermont Department of Liquor and Lottery issued four licenses on Thursday to ZAFA Wines. The licenses allow the Burlington-based wine business, which the state had previously shut down, to manufacture, sell and distribute wine.

Zafa Wines, founded and owned by winemaker Krista Scruggs, was ordered last November by the Department of Liquor Control to cease operations because, according to the department, it was operating without proper licenses in place.
Wednesday, ZAFA Wines brought its case before the Vermont Board of  Liquor and Lottery. The board formally issued its decision Thursday, with five conditions attached.

“We’re very pleased with the outcome of today’s hearing,” Burlington attorney Heather Ross, who represents Scruggs, told Seven Days afterward. “Krista Scruggs is thrilled to be able to get back to running her business."

The licenses are the first issued by the state to ZAFA Wines and Scruggs, according to Gary Kessler, deputy commissioner of the Department of Liquor and Lottery. He said his department did not receive a complete application from Scruggs until February.

“ZAFA Wines and Krista Scruggs have not previously been licensed to manufacture or distribute wine in Vermont,” Kessler said.

Several conditions were part of Thursday's order. ZAFA Wines must comply “with all the rules and regulations related to the manufacture, storage, sale and/or distribution of alcoholic beverages.”

Scruggs must notify the commissioner of the Department of Liquor and Lottery within 48 hours if the “Applicant is charged with additional criminal and/or civil violation(s) (beyond those served on or about March 10, 2021) and/or convicted of a criminal and/or civil violation(s).”

The specific charges brought against Scruggs aren't yet publicly available. Asked what she thought of the state's condition related to those charges, Ross replied: “If there are criminal charges, that is a prime example of Krista, as a Black woman, being treated differently and more harshly than others.” Ross declined further comment on the March 10 charges.

Wednesday’s hearing was the second proceeding related to ZAFA’s licensing. The first hearing, on March 18, started with assistant attorney general Jacob Humbert enumerating three issues that he suggested the board consider in advance of making its decision. The issues flagged by Humbert, who was representing the Department of Liquor and Lottery, were:

  • ZAFA’s “prior conduct related to manufacture, sale and export of wine product prior to securing a state manufacturer’s license”

  • Scruggs’ alleged “activities related to securing a credit card in the name” of another person

  • A “pending securities law issue” identified by the Vermont Department of Financial Regulation
“The department is taking no position on the application,” Humbert said at the March 18 meeting. “Its only position is that it believes the board should consider these issues before taking action on the license.”
A glass of natural wine at CO Cellars - SALLY POLLAK/FILE ©️ SEVEN DAYS
  • Sally Pollak/File ©️ Seven Days
  • A glass of natural wine at CO Cellars
After Wednesday's hearing, Liquor and Lottery board member Thom Lauzon told Seven Days that  he believes allegations of wrongdoing are not grounds for denying an applicant's license.

“I understood there are charges pending,” Lauzon said. “But those are allegations. What’s important in this instance [is] you have to allow due process to play out.”

ZAFA registered its business with the Vermont Secretary of State’s office in March 2018. It's operated a tasting room on Pine Street in Burlington, CO Cellars, in partnership with Shacksbury Cider, a Vergennes-based cidery. The Pine Street location has been closed since mid-November.

Scruggs leases a farm in Isle La Motte from the Vermont Land Trust where she grows some of her grapes. The nonprofit in Montpelier has provided “bridge financing” to ZAFA while the business has been shut down, according to VLT president and CEO Nick Richardson.

“Krista has continued to try to operate and grow her business while she’s been dealing with these regulatory issues,” Richardson said. “And she needs working capital in order to do that.”  The decision by the board is “a step forward,” he said, adding that he’s hopeful it’s an indication of what’s to come.

“Vermont needs more great entrepreneurs like Krista to be starting food and beverage businesses that make the most out of the Vermont brand,” Richardson said.

A November 2020 order by the Vermont Department of Financial Regulation, which prohibits ZAFA from seeking investors, remains in effect, according to the department.

An attempt to reach Scruggs by telephone was not immediately successful.

Read the ZAFA Wines order from the Vermont Department of Liquor and Lottery below.
See related PDF ZAFA_WINES_ORDER.pdf

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