8 Keys to a Better Wine Grape Grower Contract05/21/2013
A signed wine grape purchase agreement – a.k.a. ‘the contract’ – between a buyer (winery) and a grower is similar to getting married.
“You need to know who you are committing your life to over the next 1-15 years,” says California wine grape grower advocate Nat DiBuduo.
DiBuduo is president of Allied Grape Growers (AGG), a 600-member wine grape marketing cooperative based in Fresno, Calif. which represents the interests of wine grape growers.
DiBuduo and AGG Vice-President Jeff Bitter understand wine grape contracts since the grower representatives review or write about 500 grape crush contracts (wine grapes and grapes for concentrate) for AGG members annually.
The grower representatives estimate that more than 95 percent of the California wine grape supply is contracted on template agreements written on behalf of the winery, mostly by attorneys. In buyer-grower contract negotiations, some wineries will change the contract to accommodate grower concerns; others may not. Some contracts are written by grower representative organizations, including AGG.
Bitter, Allied’s chief contract negotiator and reviewer, reads every word in a proposed contract.
“We are always on guard for contract terms which are unfavorable to growers,” Bitter said.
Most wine grape crush contracts are negotiated from the spring through early fall. Most contracts are 3-5 year agreements. Planting contracts usually last more than 12 years.
Grape contracts have two integral parts – grape and legal components.
“Sometimes growers see the price on top, the length of the term, and then sign the contract,” DiBuduo said. “In doing so, growers sometimes give up their rights.”
Source: Western Farm Press