February (No. 493)
Avoiding disputes in contract winemaking through documentation
Lilia Averkin , Thomson Playford
While a few people may still have romantic images of the wine industry and the way it operates – of growers and winemakers combining their skills and passion in the endless quest to produce great wine – in the modern business world, the reality is very different.
Many have operated in the industry for years in an environment of mutual trust and handshake agreements, with no need for formal contracts. While firm friendships still remain across an industry that often shows remarkable co-operation within its ranks, there is an increasing recognition of the need for written contracts in all business dealings by both large and small operators.
This is especially the case for those growers who, because of the grape glut of recent years, have had difficulties selling their fruit and are considering heading down the path of producing and selling their own wine.
While this move might present a valuable source of income at a difficult financial time if appropriate distribution channels are found, a minefield of potential disputes can await unsuspecting new wine producers. These can be as a result of both securing the reliable services of a contract winemaker and fulfilling the assorted requirements of both the liquor licensing authorities and the relevant legislation governing the sale of wine.
The underlying message for growers venturing into wine production is to put solid contracts in place with contract or consultant winemakers.
Issues for grapegrowing producers
Ensuring that a comprehensive written contract is in place between the grapegrowing producer and contract winemaker will assist in clarifying the relationship and roles of each party. Listed below are some issues the grapegrowing producer may wish to consider in engaging a contract winemaker and preparing a written contract.
NOTE: The complete article can be found in the February issue of The Australian & New Zealand Grapegrower & Winemaker.