• Legal Issues Affecting California Wineries & Vineyards
• Legal Issues Affecting Idaho Wineries & Vineyards
• Legal Issues Affecting Oregon Wineries & Vineyards
• Legal Issues Affecting Washington Wineries & Vineyards
• Check out the Wine Press article on our practice group chair.
• View our Breweries, Microbreweries and Brew Pubs brochure
Business Formation
Owners of a winery or vineyard must choose from several legal structures to operate their business. Each structure has certain advantages and disadvantages that will apply to different wineries depending on the specific attributes of each winery. Several issues should be considered when establishing a winery under a particular legal structure or changing from one type of legal structure to another. They include liability, continuity, management and control, sharing of profits and losses, taxation, transferability, and costs and expenses. Wineries should pay particularly attention to the issue of liability, due to vicarious liquor liability and other liabilities of the business. We have provided counsel to dozens of boutique wineries with formation issues and are versed in the pros and cons of each business structure.
State and Federal Beverage Licensing and Permitting
Attorneys in the Winery and Vineyard Management Group are experienced in the preparation and filing of beverage license and permit applications at the state and federal levels for the manufacture, sale and import/export of wine products.
Financing
Vineyards and wineries, like any other business, generally need financing for acquisition and development of vineyards, construction of facilities, for initial business operating costs. While financing can come from many sources-including angel financing, venture capital and public capital markets-the most likely sources of financing in the early stages for smaller operations will be debt financing. While many of the forms of finance are straightforward, lawyers in the Winery and Vineyard Group can assist you with the complex features and documents involved in tax-exempt financing.
Land Acquisition
The wine industry throughout the West Coast region continues to grow and expand at a tremendous rate. One key factor in this growth has been the acquisition of land for the development of new vineyards and wineries, as well as the acquisition of existing vineyards and wineries. The complexity and importance of these transactions require prospective buyers and sellers to keep a number of issues in mind in order to avoid closing day surprises, facilitate a smooth transaction, and ensure that the purchaser's plans for use of the property will not be blocked or slowed by unidentified barriers. Stoel Rives attorneys are experienced in avoiding these stumbling blocks by conducting feasibility studies; checking title and access; obtaining land use permits and proper zoning; reviewing surveys and inspections; and drafting land lease agreements.
Construction & Design
Construction and design law issues typically arise when a contractor is hired to design and/or build a winery, install or repair a vineyard irrigation system, or perform earthwork necessary to operation or expand a vineyard or winery, including road construction, leveling and maintenance. One of a winery or vineyard owner's primary goals in entering into an agreement with a contractor should be to minimize the possibility of disputes. Lawyers in the firm's Construction Group are experienced in advising clients throughout the entire development cycle, from drafting design and construction contracts to assisting winery clients in resolving disputes when they do arise.
Environmental and Natural Resource Issues
Owners and operators of wineries and vineyards conduct a variety of activities that may subject them to the complex web of federal and state environmental regulation. With one of the largest environmental law groups in the western United States, Stoel Rives makes the ideal legal partner for any agriculturally based business wishing to successfully navigate the regulatory maze. We have worked extensively and successfully with the state and federal agencies that administer and enforce rules and regulations applying to endangered species, wetlands, waste water management, process and stormwater discharges, and surface water and groundwater quality.
Water Rights
Water is a limited resource in many areas of the West. This fact is significant for vineyards and wineries because they need water to irrigate newly planted vineyards and for use in the winery to clean tanks and for drinking water. In order to irrigate young grapevines, water rights must be obtained from the state in which the winery does business. A vested state water right thus is a valuable asset to any parcel of real property. Awareness of the water rights system can help a winery or vineyard owner both to secure and protect a sufficient supply of water and to accurately value winery or vineyard property prior to purchase or sale.
See Water Rights in Oregon.
Employment; Workers' Compensation; OSHA
Members of the firm's Labor & Employment Group handles a variety of issues for employers relating to labor-management issues, employment agreements including confidentiality and noncompete agreements, pensions, contracts, wrongful discharge, civil rights, federal and state occupational safety laws, wage and hour laws, immigration, workers' compensation and OSHA.
Trademark Protection
A key asset for any winery is its name and associated trademark, including its design, which distinguishes wine sold under its label from that of its competitors. As with many businesses, in the wine industry, it is critical to the continued success of the venture that a winery's name and label design be protected from infringing or other unlawful use by another winery, or other unrelated business. Stoel Rives lawyers are versed in federal, state and international registration of trademarks to protect your valuable intellectual property.
See Trademarks and Wine Labels: Selecting, Clearing, and Registering Wine Label Marks.
License Agreements
License agreements can take many forms and are a valuable tool in creating mutually beneficial relationships with a variety of parties. A current trend in the wine business is to form custom-crush licensing agreements, by which existing wineries crush, ferment, age and bottle wine for individuals who then market the wine under their own labels. A license agreement may also govern the use of your facilities for various events such as weddings, parties or festivals. The activities can establish goodwill in the community, promote name recognition and generate revenue.
Income Taxation
In May 1995, the IRS released a report highlighting tax issues of specific importance to the wine industry and setting forth, in a sense, a tax compliance checklist for use by IRS personnel in selecting winery and vineyard tax returns to audit. The report suggestions that winery and vineyard operations should exercise particular care in ensuring compliance with federal income tax accounting rules. Members of the firm's Winery and Vineyard Group can advise you on preferred accounting and inventory methods, cost capitalization, depreciation models and other issues to avoid audit and unnecessary tax burden.
Business Succession
Many wineries are small family-owned and closely held businesses. There are typically several generations involved in the running and financing of the winery. This kind of structure raises a number of issues and complications concerning business succession, transfer of ownership and related estate planning issues. Members of the firm's corporate and estate planning groups can assist in helping you make the best choices for the business and for your family.
Litigation
Stoel Rives litigation capabilities encompass a broad spectrum of disputes that may occur in the wine business, and our Litigation Group includes individuals who are accomplished trial lawyers in jury and bench cases, who specialize in appeals or administrative proceedings, and who are experienced arbitrators and mediators. The firm has represented competing land owners in vineyard boundary disputes, environmental enforcement actions by regulatory agencies, insurance coverage actions, land use challenges, private citizen suits, FDA investigations, product liability defense and other similar matters. Our lawyers regularly handle numerous cases involving commercial contracts in a wide range of areas including the purchase or sale of businesses and goods, utility supply contracts, sale or development of intellectual property, construction, real estate and partnership disputes.