CA wineries: Time to renew your ABC licenses
Posted on 2015-05-05 by Ann Reynolds

Here in California if you are in business as a winery, which is known as a “Winegrower” with our Alcoholic Beverage Control agency by now you would have more than likely received a mailing with your type 02 license renewals. The CA ABC gives numbers to all the different types of licenses they issue, and for those in the winery game they hold the type 02, or winegrower license.

First of all, I’ve always gotten a kick out of that term, “winegrower”. I always thought wine was made, and grapes were grown. However the license name was derived by the CA ABC folks once upon a time they are still rather old school with their renewal process. All type 02 licenses, which is called the Winegrower come up for renewal by June 30th of each year. These renewals are sent out, and must be returned via snail mail to the CA ABC headquarters in Sacramento. 

So a head’s up to all you California wineries- if you don’t receive this renewal mailing from the CA ABC by the end of May- give their Sacramento office a call 916-263-6882. You’ll want to provide them with your ABC license # as well. In case you can’t easily track down what that number is- here’s a link to look it up on their handy license query lookup

The CA ABC states that it isn’t their fault if for some reason their renewal mailings don’t make it successfully to your mailbox, and if they don’t receive your renewal mailing back post marked by June 30th they will tack on a ranging rate of late fee, which depends on what your license fee is. I also suggest sending your renewal back to their office in some form that you can track confirmation that they received it.

One other point worth mentioning here is that if your wine business is the “alternating proprietor” type you will hold a second type 02 license, called a duplicate. This will list whatever your businesses address is, which is different from your other type 02 license that lists the winery’s physical address. This second, or “duplicate” 02 license is also up for renewal by June 30th of every year- so make sure that you receive that renewal mailing from the CA ABC office as well. Here is where to contact them again if you don’t receive it by the end of May.  (916) 263-6882.

Talking wine label compliance with Rob Mondavi
Posted on 2015-04-28 by Ann Reynolds

Winery compliance as a profession is a rare and generally unknown one. Most people I meet have no idea what the term “winery compliance” means. One of the easiest ways to explain what it is that I do is to point to a wine label and state “everything that you see there is regulated by the federal, and potentially state government and wineries are required to maintain records to back them up”. Their faces will light up and they’ll nod their heads with an “I get it” sort of look.

There is a lot going on behind the scenes of a wine label, so as part of my business I have a lot of conversations with clients around the topic. These conversations are most often in the label design stage of planning for a bottling. We talk about the specific details of their wine’s blend breakdown (Vintage, varietal, appellation, etc) and based on what those are then tells us what it will or won’t qualify to list on its labels.

I had one of these conversations recently with client, colleague and friend Rob Mondavi, President of winemaking for Michael Mondavi Family Estate who had a few questions around the use of two common wine label items, AVAs and vineyard names. He would tell me the percents of a wine blend and then ask whether an AVA or vineyard name could be listed on either the wine’s front or back label, or both.

For the first topic of listing an AVA, his question was if a wine blend was sourced from two of Napa Valley’s sub AVAs could they both be listed on the back label? The answer: no. YES! The federal requirements (TTB) for use of an AVA on a wine label require that a minimum of 85% of the grapes used to make the wine blend must come from that AVA. So then the math would never work to list more than one AVA on any wine label. False! See my updated blog which explains why the TTB may allow this. I will point out the “exception” to this is in the case of listing a sub AVA and its parent AVA on either the front or a back label. For example, for a wine with 85% or more of its grapes coming from the Atlas Peak AVA, it could list “Atlas Peak, Napa Valley” on either label. (Note: It would also be required to list both per CA state law – see earlier blog post on this topic)

The next topic we discussed was the use of vineyard names on a wine label. Rob wanted to know about listing more than one vineyard site on a back label. This would be acceptable to the TTB. They would require the vineyard source information to be listed in either of the following formats. Either the vineyard sources would be listed by name in descending order OR each vineyard would be listed by name along with it’s actual percent in the blend. 

This is different from listing a vineyard name on a wine’s front label. In that situation, use of a vineyard name becomes what is known as a “vineyard designate” and then per TTB requirements the wine blend must contain at least 95% of its grapes from that specific vineyard site. 

These are fun and satisfying conversations for me to have with my clients. They exercise my wine label compliance muscles, and at the same time provide bite size pieces of learning for my clients. (The best way to learn winery compliance) Rob was doing his best to stump me during this conversation- and as he put it, “I’d really like to believe that you’re incorrect, but unfortunately realize that more than likely you’re not”. In other words the legal ins and outs of wine label regulations often don’t make sense to the folks being regulated by them, but they’ll play by their rules to maintain that “truth in advertising”.

If you want to know the full story on all federally regulated wine label items, you may be interested in my book, The Inside Story of a Wine Label.


Chiropractic adjustments for your winery compliance
Posted on 2015-04-22 by Ann Reynolds

In my weekly email newsletter sent out yesterday I talked to my readers about the benefits I’ve received over the years from getting chiropractic adjustments and how I recently recognized a parallel between them and the common “pains” I see in the world of winery compliance.

The parallel being that some simple adjustments can be made in how wineries are handling their required TTB compliance which will result in the current “pains” they are experiencing going away.

When we decide to have chiropractic treatments, it is because our bodies either have been injured or have become out of alignment from other sources and the adjustments put them back into proper alignment so they can function effectively as they are supposed to, and free from pain. However, once our bodies are put back into proper alignment then it is up to us to maintain that, otherwise the pain will resurface.

What do some adjustments look like in the world of TTB winery compliance?

1. Knowing exactly what required winemaking records they need to be maintaining and the specifics of setting them up to meet TTB requirements. (State & local here too)

2. Having a plan for exactly how your required reports are managed. This includes a set schedule for filing them & assigning their responsibility to the best person(s) for the job.

3. Having a big picture “blueprint” which encompasses all of their winery site’s local, state & federal licenses and how each of those are connected to the others as far as their required records or reports.  The management of this “blueprint” also needs to be assigned to a best fit staff member or members. By best fit here has everything to do with their aptitude and attitude towards the rather maze like qualities of winery compliance. Too often I see these tasks being assigned to the wrong staff members, which is a cause of the wineries “pains”.

Where can a winery compliance adjustment be obtained?

Training!   I’m hosting my next live training course on Tuesday, May 12th in Placerville, CA.

For full info follow the link below.

Winery Compliance: On the road

Winery Compliance Class: May 12th in Placerville
Posted on 2015-04-14 by Ann Reynolds

In last week’s blog post I wrote about how winery compliance is a conundrum of a task for the vast majority of winery staff responsible for managing it. What is the main factor behind this? In my opinion it comes from the following two sources:

  • (1) They are given little to no training specific to it
  • (2) The wrong staff person (or persons) are managing it

I was in the fist group back in my early days at Sterling Vineyards in the late 90’s, when I first began the compliance leg of my wine industry career. Essentially I felt like I was stumbling around in the dark as I attempted to make sense of the 6 figures of wine gallons I was tracking on and off site and how their details (vintage, varietal, appellation, etc) translated into what the TTB required to meet their regulations and keep in their good graces.

Fast forward from there to 2006 when in large part as a result of my less than ideal winery compliance learning experiences I began teaching the topic at Napa Valley College. Since then I’ve continued to offer compliance training courses through other venues, in both face to face and via online style.

I’ve decided to expand these training opportunities to a wider area and will host my next in person training in the Sierra Foothills region of California – where there are well over 200 wineries currently.

The course is being offered on Tuesday, May 12th from 9 am til 2 pm at the Cary House Hotel in Placerville. 

Full course info & sign up details are here:  

Winery Compliance Training: On the Road

This course is for you if you too have felt like you’re stumbling around in the dark as far as understanding what your winery is supposed to be doing to keep up with TTB regs and you’d really like some piece of mind that comes from a training like this.

Topics covered include:

What specific records you need to be keeping on your wines & what they need to look like

What reports you need to be sending to the TTB and how to fill them out to avoid any red flags

Time savers for your TTB filings: required reports and label approvals

TTB & CA BOE excise taxes: Is your winery filing and paying them at the correct rates

Wineries: How is your compliance confidence?
Posted on 2015-04-08 by Ann Reynolds

Winery compliance is  (more often than not) a conundrum. A conundrum is defined as “a difficult and intricate problem”. I think most winery staff who have had the responsibility of trying to figure out their winery’s TTB 702 report filings, excise taxes or label approvals would agree with me. So if you’re reading this and nodding in agreement, know that you’re definitely not alone. We’ve all been there. (Or still are!) I was there myself once upon a time!

Add to this “conundrum” nature of winery compliance the fact that it is just one item on the long list of overall responsibilities held by the winery staff  who manage it.

What does this mean for most wineries? They combine this “difficult and intricate problem”  with not a lot of time to learn how to solve it and that adds up to improper record keeping, incorrectly filed reports, claiming TTB tax credits they don’t qualify for and wine labels that are out of compliance. These are the most common scenarios I see and hear about firsthand from winery staff in all parts of the country. So TTB compliance remains on some level a constant conundrum that hovers in the background for winery owners and staff, leaving them feeling ill at ease and often vulnerable to being audited.

I think at the end of the day the winery staff that are responsible for managing any required TTB filings would like to have a sense of confidence around it. Confidence that you know you’re filing your numbers correctly, paying taxes at the rate you qualify for and that your wine labels would pass TTB review. (just to name a few!)

There are some fairly simple ways this can be achieved. A brief checklist to begin with, which will start a winery down the path of assessing the key problem areas associated with TTB audits, and whether or not their winery is at issue for them. From there they can begin to fill any holes they may have in the different areas of their TTB compliance.

I’ve created a brief questionnaire wineries can use to start this process which can be accessed here:

5 Step Winery Compliance Self Check

AVAs on Wine Labels: Continued
Posted on 2015-03-31 by Ann Reynolds

Last week I wrote about the conjunctive labeling laws on the books here in California – and specifically the requirement of placing the parent AVA, Napa Valley next to any sub-AVA of it that is listed on any labels placed on a bottle of wine.

I realized this topic ties directly in with a TTB requirement related to how wineries are tracking those loads of sub Napa Valley AVA grapes. This topic is an issue I have seen often at wineries over the years, and is related to their weigh tags, or more formally known as weighmaster certificates.

Weighmaster certificates are a legally regulated document which track the purchase/sale of a load of wine grapes. (in this example) They are required to have a specific set of text & fields on them, however an appellation field is not one of them.  Here is where the TTB rub comes in.

The TTB sees a weigh tag documenting a load of grapes as a “source document” or in other words think of them as birth certificates for your wines. The details that you fill in on a weigh tag tie directly in with what you eventually will or will not qualify to list on the wine label for the wine those grapes become a part of.

Here is an example of what I’ve seen commonly happening on weigh tags. A load of grapes from a sub AVA of Napa Valley comes into a winery. The winery does have an appellation field on their weighmaster certificate template. (Score one point for their compliance!)  However when they write up the weigh tag for that load of grapes they fill in the appellation field with “Napa Valley” when they need to list the sub AVA instead. This will mean that come label design time for the wine those grapes are made into it would NOT qualify to list the sub AVA on its label – because it was not documented on the “source document” or weigh tag.

If wineries would first make sure to include an appellation field on their weighmaster certificate template and then next ALWAYS be as narrow as possible in the AVA they list on all their weigh tags this will provide them the widest options come label design time & cover them to any TTB scrutiny.

Give Napa Valley credit or lose your license
Posted on 2015-03-25 by Ann Reynolds

I recently heard from 2 clients telling me they were contacted regarding their use of a sub AVA of Napa Valley on their TTB approved wine label. What they were specifically being contacted about was that their labels did NOT also list Napa Valley next to that sub AVA.

This scenario is one example of what are known as conjunctive wine labeling laws here in
California. In the case of Napa Valley it is sourced from California Business & Professions code #25240 , which has existed since 1990. What it placed into law is the requirement that any wine label which lists one of Napa Valley’s sub AVAs (which we now have 16!)  must also list “Napa Valley” next to it………..Anywhere that sub AVA appears on the label by the way folks!

What might happen to your winery if you don’t do this you ask? You could be required to pull all of that bottled wine out of warehouses, retailers, etc and re-label it correctly. Or your winery could have its CA ABC license suspended or revoked.

There are currently 4 conjunctive wine labeling laws on the books in California. Besides our Napa Valley scenario here the other three are Lodi, Paso Robles & Sonoma County.

Winery staff that are involved in the compliance side of wine label design & obtaining TTB label approval need to be the watchdogs on behalf of their winery or wine cellar for this California requirement. The TTB is not going to flag your label approval submission for not meeting this state of California conjunctive labeling requirement! 

Through the wonderful technological tools now available for doing TTB COLA searches- our CA ABC offices or anyone else interested in keeping a “conjunctive labeling” eye on TTB approved wine labels can easily run searches to spot those that are out of compliance.

This is another great example of what I refer to as the “connect the dots” big picture that wineries need to have in relation to successfully managing their ongoing compliance. By “connect the dots” I mean how one item of your winery compliance, in this instance an individual wine label and its TTB label approval is then connected to meeting requirements of CA ABC law.

Who has this “connect the dots” view at your winery?

Things To Be Thankful For In Winemaking Compliance
Posted on 2014-11-25 by Ann Reynolds

Yes I know, “thankful” and “compliance” don’t usually show up in the same sentence together. But if you’re someone who has spent the past 15 plus years interacting with the TTB from a recordkeeping and reporting standpoint you can appreciate the improvements that have come along to simplify the process. Plus I’m a person who believes in a regular practice of gratitude. So in the spirit of marking this Thanksgiving week I’ve summarized a few of this years compliance “developments” that I’m grateful for.

Continue reading

How to KNOW your excise taxes (TTB) have REALLY been paid!
Posted on 2014-09-25 by Ann Reynolds

This headline in the wine industry last week caught my attention- Wine Cellar owner sentenced to prison . This was related to lack of payment of TTB excise taxes due for over a year’s period of time. The thing was, this business had been including on their customer’s invoices payments made for excise taxes but those taxes were never paid to the TTB, so the owner was just pocketing those amounts. 

The owner of this wine storage & shipment business was actually sentenced to 9 months of prison time in addition to restitution payment due to the TTB of closer to $900,000. That dollar figure would come from the past due tax payment amounts, late fees and penalties related to her knowing neglect in paying them.

But what about the wineries that stored their cased wines there? What about their responsibility? Are they in trouble with the TTB as well? No they are not, their responsibility would lie in the details of how they shipped their wines to the warehouse. The paperwork that goes along with a shipment of cased wine to a storage warehouse is called a bill of lading. (or what the TTB call a transfer in bond record) On their bill of lading a winery would have specifically indicated “transfer in bond” on it, meaning that the federal excise taxes had not been paid on those cased wines. This in turn generally means that when the winery receives an order for those wines it is forwarded to the warehouse for fulfillment and then they, the warehouse as the site that actually shipped the wines are required to file the federal excise tax report and submit payment to the TTB on the amount of wine shipped.

This is what all the winery customers of this warehouse in Salinas thought was happening, especially since they were seeing the tax payment amounts coming back to them on their invoices. Why would they have suspected otherwise?

The only way a winery can be 100% sure that all their TTB (And California BOE by the way too) excise tax payments have been made is if they are filing them themselves. 

What this scenario looks like is all of a winery’s cased wine shipments going to a wine warehouse for storage & fulfillment are all sent “Taxpaid”. This “taxpaid” statement is also indicated on the bill of lading sent with the wine to the warehouse, so the warehouse will know how to log in into their system and keep track. Plus it is also the start point indicator for the warehouse that they do NOT have to submit any of the tax filings/payments on shipments of those wines. The TTB excise tax reporting and tax payments are then fully the responsibility of the winery itself.

Another item of note related to this same issue I have heard several times in recent months is that some wine storage warehouses in Napa and Sonoma county are no longer willing to file TTB excise tax payments under the small producers tax credit. So for any of their winery clients that qualify for this hefty 0.90 cent a gallon tax credit they would essentially be telling them “if you want to take advantage of this huge tax savings on your wines, you’ll need to send them into us “Taxpaid””. Which would mean that the winery would document their bills of lading of cased wines being sent to their warehouse as “Taxpaid” and then follow up on those shipments for their next reporting period by submitting the TTB excise tax report along with payment.

For more info on the bill of lading document go here: BOL info

For more info on the TTB excise tax for the small producers credit go here: SPC tax info

To talk more about your winery records and reports please contact me here:                  

OR     707-320-8575