Tips To Ensure Grape Grower Payments From Wineries
Brad Goehring was always surprised to hear from fellow California winegrowers who said they were having trouble collecting on the grapes they had sold to wineries. But while the recession may be over, a lot of winemakers â€” especially vintners of high-end wines that really saw sales plummet as consumers moved to more affordable price points â€” are still reeling. And the growers who supplied their grapes are getting splashed with all that red ink.
Dale Stern, the California Association of Winegrape Growersâ€™ legal representative, says thereâ€™s no question such problems have increased, and the wineries arenâ€™t small unknowns. â€œWithout a doubt I am getting more calls from winegrape growers and this is involving more wineries than in the past,â€� says Stern. â€œA lot of the calls that I get are wineries that are larger and have been around for a long time and owe quite a bit of money to growers.â€�
Goehring, who has been stiffed for the first time by a winery that while not overly large is publicly traded, still canâ€™t believe heâ€™s been caught up like some of his friends. â€œNow Iâ€™m one of those growers,â€� says Goehring, who farms 400 acres of winegrapes near Lodi. â€œI used to think â€˜Iâ€™ve got a lien in place â€” Iâ€™ll be one of the first to be paid.â€™ But there are too many loopholes.â€�
No Wine â€” No Payment
Among the loopholes, says Goehring, is the fact that if the winery has sold the wine, the grower who supplied the grapes to make that wine basically doesnâ€™t have a lien any more. In addition, the wine must have some value. â€œIf itâ€™s a 2007 Sauvignon Blanc itâ€™s not worth anything; most white wines are out of the tanks and into the store within a year,â€� he says. â€œThese are some of the problems CDFA (California Department of Food and Agriculture) really needs to address and tighten up.â€�
Goehring says heâ€™s not a complainer. A fourth generation winegrower, heâ€™s never been to court before. And he emphasizes that the great majority of wineries take great care of the growers that supply their grapes. However, for those wineries who donâ€™t play by the rules, the CDFA simply doesnâ€™t have the situation under control. For example, in his case, the agency slapped the winery with a six-month suspension of their license to buy grapes. â€œBut the suspension runs from December through June when there are no grapes (harvested),â€� he says. â€œIt didnâ€™t even catch the wineryâ€™s attention.â€�
Even if the wineryâ€™s license is suspended, that only means they canâ€™t purchase grapes. The winery can still purchase bulk wine and bottle it.
Get The Ball Rolling
Goehring has perhaps more insight on this situation than the average grower because not only is he a member of CAWGâ€™s Board of Directors, but he has some input on 10,000 acres of winegrapes in the state, with his involvement ranging from providing advice to custom farming. He can understand how a lot of growers can get caught, especially with the recession. â€œMaybe youâ€™ve been through the ringer the past few years and youâ€™ve had trouble selling grapes,â€� he says. â€œYou just want to make a sale, so youâ€™ll sign any contract.â€�
But a good contract is critical if a grower wants to try and ensure payment (see â€œGrower Payment Checklistsâ€�). Even with a good contract, as Goehring says he had with the winery who hasnâ€™t paid him, growers have to be prepared to take action.
Goehring and a half-dozen other growers whoâ€™ve been stiffed by the winery are currently talking to an attorney. The growers range in size and the amounts owed, which Goehring says ranges from four to six figures.
Goehring offered the following advice to growers regarding payment. â€œFirst, hold onto those relationships with those wineries that are good, that are valued. Two, make sure you have a contract that ensures your rights. Three, on day one (of payment due) pick up the phone and call the winery.â€�