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Matthew Mann
 
January 29, 2009 | Compliance, Direct-To-Trade | Matthew Mann

Survive Tough Times: Maximize Your Winery License Privileges

Even at a small level, entrance into the wine industry is a capital intensive and effort intensive undertaking. Purchasing premium barrels and grapes is expensive. Equipment and space, even if you are initially renting, comes at a cost. Let’s not forget packaging: bottles, closures, capsules and labels add up quickly. Finally, you have sales, marketing and overhead. Oh yes, one more thing, you need to put this money out a year or two in advance before you ever see a dime of income.

I don’t say this to scare people out of the business or to educate those looking to take on this financial hurdle. Most come into the business fully expecting and prepared to experience such costs and efforts. They even relish the prospect in order to pursue their passion. I mention all of this because as prepared as many new winemakers are to handle these burdens, they more often than not have no idea about the licensing required to operate. Sure, they may call the state alcoholic beverage authorities to find out which licenses they will need and how much they will cost, but rarely do they look into exactly what privileges that license conveys.

In California, the Type 02 Winegrower license conveys a bevy of privileges that go far beyond the mere right to produce wine. It grants the right to -

  • Sell the wines they produce at wholesale to on- and off-premise retailers and at retail direct to the public.
  • Purchase wine in bulk from other producers to blend or bottle under their own label.
  • Import wine to be packaged under their label.
  • Produce wine under multiple different labels if properly approved by the TTB.
     

These are just a few of the key privileges. There are a multitude of other privileges from sampling to pouring that Type 02 Winegrowers can take advantage of in operating their business. Learn what they are and use them to develop opportunities to bring in revenue.

I don’t have the space here to go into each state’s winery licenses and their privileges. As with so much in wine laws and regulations, they vary dramatically by state. But the point is to learn what privileges your license grants in your state. The wine business is expensive. You license has value. It is important to properly utilize every opportunity offered by the privileges your license grants to maximize that investment, especially in tough economic times where survival can depend upon it.


 

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