Uncorking success: Key legal considerations for launching your own winemaking business

Jason Varney a Partner in our Corporate team and Katherine Morgan, a Senior Associate in our Real Estate team, recently wrote a piece for Vineyard Magazine.

Embarking on the journey of establishing your own vineyard and/or winemaking business is an exciting venture. While the romance of creating fine wines is undeniable, navigating the legal and regulatory landscape is equally crucial.

Below are some key considerations to enable you to “ferment” success in your new business.

1) The grapevine of corporate structure

Before planting your first vine, you need to ensure that your business has an appropriate corporate structure. The number of possible structures (and variations on the structures) are like grape varieties – there are plenty of options, but only one or two will truly be fit for your particular circumstances and ambitions.

Additionally, if you are seeking external investment, spending the initial time to ensure you have a detailed partnership/shareholders’ agreement and/or articles of association (if you intend to set up a limited company) is critical.

2) Licences and permits

The legal complexities of starting a new business can be daunting, but obtaining the necessary licences and permits (such as for the use of land and alcohol & premises licences) are non-negotiable.

3) Real estate

If you are seeking to acquire land to start from scratch or to acquire an already established vineyard, legal due diligence on the land and any buildings on it is key. If funding is required, a lender will often require full due diligence to ensure there are no issues which could adversely affect its security.

If you already own (or lease) arable land and your viability assessment is positive in terms of the land being suitable for viticulture, there are still a number of legal considerations that you will need to consider including:

• Planning

Planning consent(s) might be required to authorise the use of the land and any ancillary buildings for the purpose of wine making, wine selling, consumption of food and drink on the premises etc.

• Lease restrictions

If you occupy the land under a lease, does it contain any restrictions which could scupper plans to alter the permitted use under the lease and/or submit planning applications? It would be unusual for a lease to not allow the landlord some element of control over what is being carried out on its land.

• Development and construction

If you have grander plans to open a winery, will the scale of the development works warrant entering into a contract with the building contractor, obtaining warranties from any sub-contractors and so forth?

4) Harvesting talent

Winemaking is a collaborative effort – and so it is important that your business and your employee team are appropriately protected through the use of bespoke employment/service contracts and policies.

5) Contracts, contracts, contracts!

The biggest mistake we often see made by new business owners is that they do not spend enough time working through the finer details of their new supplier and/or customer contracts. Frequent issues include unrealistic delivery terms, punishing payment schedules, indemnity clauses and unequitable termination rights. This is especially true for those who plan to sell their grapes or subcontract wine making to an already established winery (as this may require more complex sub-contractual arrangements).

Ensuring that your contracts are clear and fair upfront will help save significant management time and money later.

6) Keep intellectual property rights in mind

Intellectual property (both yours and others’) is a hugely valuable asset that needs to be protected. A lot can rest on branding in the food & beverage sector, and there are many legal protections that can assist to shelter one of your most important assets.

Food (and wine) for thought…

If you are considering starting a new vineyard and/or winemaking business, or acquiring an established venture, it is always wise to consult with experienced legal professionals who can guide you through the intricacies of doing so. Please do feel free to get in touch.