Seems like I see headlines on Wine Business Monthly’s website about wineries being bought and sold on a steady basis these days. It seems as though there are some parallels between the level of sales activity for wineries and sales of homes right now. By that I mean it appears investors are taking advantage of it still being more of a buyer’s market. Perhaps the same factors that influence the home value market don’t apply to winery values but regardless when the ownership of a winery changes it sets into motion an update to all of their licensing documents. (But no tall furry hats required)
A winery as a business has a set of licenses that starts at their local city and/or county level and goes up from there through state agencies and on up to the federal level. Each of the licenses and/or permits it holds at each level will need to amended/updated as a result of it changing hands from one ownership to another.
Each government agency has its own procedure and corresponding documents that they require to be filed to make this transition. Filings also must be submitted from each side of the sale: the winery that is being sold and the new ownership that is purchasing it.
Other details that the purchasing winery will want to pay attention to as part of this process are some of the specifics of their newly acquired site. Some of these include:
Local permits: Annual production volume. This is the total gallonage of wine they are allowed to ferment on site. This is also generally mentioned specifically in the real estate listing.
Site details: What are all the existing buildings on the site and what are their uses? As the new owner are there plans to add more buildings and so expand the footprint? Take this into account when amending the federal (TTB) permit and also in relation to the local permit detail listed above.
One other significant area to mention is taxes, specifically federal excise tax. If the business that is purchasing the winery also already owns other winery properties this can impact their qualifying to file for the small producer’s tax credit. The details of who is listed as owners and their corresponding ownership percentages are what need to be looked at across all winery ownership sites.
<See my earlier blog post on this>
The total count of US wineries continues to go up each year. In many cases some of those “new” wineries are coming from ownership changes of existing sites.
The changing of the guard means a change to the brands a site will be making and selling, perhaps the fruit they will purchase, and often many changes to their staff, but before all of that an ownership change starts with an overhaul of their compliance files.