Legal Issues When Transferring Winery or Vineyard Ownership
An interview with Attorney Ron Parravano
Parravano has been practicing law since 1976. For the last 20 years, he has been focusing mostly on Alcoholic Beverage Control or ABC laws, estate planning, and escrows. Working with many wineries in Monetary County and beyond, and even creating some Chardonnay himself on his small family vineyard, Parravano is familiar with the steps that it takes to buy, own and sell vineyards and wineries.
Q: What are some common scenarios when people would want to transfer over their business assets?
A: There are many reasons that people may want to transfer over their assets. Many of my clients are small, family owned vineyards and wineries, and often they will sell their vineyards if they are going into retirement and their children don’t want to carry on the business, they want to pursue something else, are going through a financial struggle, or for other reasons.
Q: What is the process of transferring over the assets?
A: Well there are many moving parts involved in transferring winery and vineyard ownership, because wineries all operate differently. Some wineries grow their grapes some of which is produced into wine and some of their fruit is sold to other suppliers. Many wineries have a tasting room and sell direct to the consumer, some wineries source their grapes from other growers, and some vineyards just produce grapes to sell. In most situations it is a two part process: selling the real estate and selling the business assets and goodwill.
Q: What should someone look for before buying or selling a vineyard or winery to avoid legal issues?
A: When it comes to the real estate, they should inspect the zoning to make sure that they would be operating within local and county ordinances, they should check for any environmental issues like drainage. All possible easements should be investigated. They should check the property’s water availability and access, and they should of course check the vines as well. Vines have a finite lifespan and will eventually have to be replaced. When it comes to the business side of it, they should hire an accountant to look over the books, and they should inspect the buildings and equipment. There is also some intellectual property that can be transferred, such as the name of the winery and the buyers. There are many more steps.
Q: How can someone make sure that something doesn’t slip through the cracks?
A: The best solution is to hire people that are familiar with the industry. You will definitely want to hire a great accountant, who will inspect the books for you, as well as a great lawyer that is familiar with the process.