Branching Out: Winery Compliance and the Potential Role of its Attorney

In our last posting, we discussed the risks that may arise from time to time with wineries with regard to compliance, and the potential for some highly undesirable repercussions for not staying current with compliance obligations. As mentioned in our previous posting, a number of excellent compliance companies are available to work with wineries to ensure full compliance. However, there are situations in which the needs of a winery may require more legal consideration and guidance for issues that may extend beyond the services provided by a compliance company.

An attorney can work in tandem with a winery’s compliance company to bring the winery into full compliance, but where necessary, the winery ought to consider whether the lawyer or the winery engage the compliance company to preserve the attorney-client confidentiality. Where a winery requires assistance with an issue that may involve disclosure of potentially sensitive information, working with an attorney may well be the best way to serve the winery’s interests, as communications between an attorney and his or her winery client are protected by the attorney-client privilege.

Additionally, while many wineries select their business structure in order to best meet the financial goals of the winery, the structure selected can in fact result in non-compliance with state or federal regulations. Working with a wine law attorney, a winery can ensure its business structure is one that is both financially beneficial to the winery and is within the parameters of the applicable regulations. It is not uncommon for a winery to have an extremely complex issue that may extend beyond a compliance company’s services (e.g., one that involves a tax, real estate or land use issue). In such a situation, a wine law attorney can work with the winery and, where appropriate, its compliance company, to resolve the compliance issue.

An attorney can provide services that encompass the multiple and varied needs of a winery, and ensure that all of the winery’s legal documents work together. A number of areas of law intersect in the operation of a winery, and it is extremely important that all of a winery’s legal documents are consistent and that they complement, rather than contradict, one another. Areas of law including land use and acquisition, estate planning, business structure and formation, corporate planning, taxes, contracts, intellectual property and environmental law may surface in the day-to-day running of a winery. An attorney can assist in these matters, and work with the compliance company to remain compliant to allow the winery owner to concentrate on what she or he probably most wants to – crafting that perfect bottle of wine.

Jeannie D. Goshgarian  Ziyad I. Naccasha

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