Here we are at years end. A time often focused on assessing the years events & developments, ups and downs. For the winemaking world 2012 has already been marked as an incredible one in relation specifically to the grape harvest. (At least here in California) But what about in relation to compliance? What were the stories there? And what’s to come for wineries in 2013 that they’ll want to pay attention to for keeping on top of their compliance?
Quick question my winemaking compliance friends, When you researched for the answer to a compliance question were you ever frustrated with the first answer you were given? And by frustrated I mean the answer you were given either was not very clear or just didn’t sound like the right one you were after? My simple solution when this happens to you? Get a second opinion.
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 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 this annual American tradition from our founding days I’ve summarized a few of this years compliance “developments” that I’m grateful for.
There are currently over 7,000 wineries in the US. I continually am in contact with folks at the beginning stage of starting a wine business, and many of those are as a “bonded winery”. Basically what that expression means is they are licensed as a winery, so a business that makes wine, grape to bottle. It’s a pretty exciting stage to become officially licensed, but then after that initial excitement wears off comes all the “what do I do now?” questions as far as compliance related to that new permit. Believe it or not everyone I interact with that is starting a winery is doing so because they’re excited about making and selling wine……….not because it means they’ll get to deal with compliance.
I recently wrote a post about one of the potential compliance side effects related to this years high yield harvest. Afterwards, while I was talking to a client I was reminded of another potential compliance issue. He asked about the topic of bond coverage and what happens if wineries go outside their limits.
First, let me put all of that into laymans terms and how it ties into this years high volume harvest. All wineries have specific bond coverage (TTB requirement) which is an insurance policy that covers the total tax liability for wines they have on their site at any given time. If their total volume goes over that coverage amount in the event of an accident or an audit they would be outside their coverage amounts on their TTB reports. In both cases something they can be fined for or worse, held responsible for tax liability on wine that accidentally was lost.
Winemakers, do you cringe at the thought of having to deal with your compliance? If you said yes (And you know all of you did) then I’ve got some good news for you. There are some simple ways to make keeping up with your compliance an easier task. Really, there are.
I’ve conveniently summarized a list of my Top 3 Tips just for you, which if followed consistently are guaranteed to spare you from a lot of unnecessary cringing.
Harvest of 2012 has definitely shaped up to be a very welcome banner year for wineries here in California. I’ve been reading story after story about the high tonnage amounts, and picture perfect looking fruit that has been arriving at wineries over the past two months. But what happens when too much of a good thing is showing up at your winery? That is you’ve got more fruit ready to come in than you’ve currently got tank space open to ferment it in?
There’s no shortage of questions around the topic of winery compliance. I hear them all the time from folks across the spectrum of the business, from those just getting started to well seasoned veterans who have worked years at many wineries. One of the most standard resources I point them towards for the answers to their questions is the TTB’s website. So with that in mind I thought I’d put together a Top 10 list of what I see as the most useful items that can be found there.
Compliance not popular? No way!
Well actually yes, that is the way compliance is for many folks who deal with it. It is an undesirable, unsatisfying chore that they dread and put off til the last minute. I know this from interacting with a lot of winery colleagues over the years and hearing their sad stories of frustration and distaste for this “necessary evil” task on their to-do lists. After listening to their stories I then like to ask them how they’d feel if they never had to deal with it anymore. You can take a wild guess what their answers are.
I talk to a lot of people who are just getting started with a wine business. Many of them are either starting as a custom crush client (wholesaler) or as an alternating proprietor. (See my two previous posts) No matter which of these types of licensing they are getting I always start out our conversation by asking them questions about what their business model is going to look like. Why am I so curious about their business model? Continue reading