Reference Toolbox – Wineries Business/Financial

In Oregon, the four typical ways to produce wine are through winery licenses, grower sales privilege licenses, wholesale malt beverage and wine licenses ("custom crush"), and alternating proprietorships. The privileges and requirements can be found in this OLCC guide. For additional information on the allowable uses of the winery and grower sales privilege licenses and a listing of licensing and registration requirements, please refer to Davis Wright Tremaine's Regulatory Reference Guide.

Winery License

A "winery" is a premise that principally produces wine or cider in Oregon. A “winery licensee” is an entity that either possesses a TTB Producer and Blender Basic Permit or a TTB Wholesaler Basic Permit and has a written contract with a licensed winery, and has control of the wine brand. “Control” means that the applicant either owns the brand, or has at least a 3 year trademark license with the brand owner. Note that an applicant should file an OLCC Liquor License Application (as a winery) and a TTB Winery Producer and Blender Basic Permit at the same time.

• OLCC Winery License Application
• TTB Winery Basic Permit Application
• Winery/GSP Permit Checklist

Grower Sales Privilege License (GSP)

“Grower Sales Privilege” is a license given to entities that grow all of the grapes or fruit used for wine or cider in Oregon on land they “control” (e.g., land they rent or own). A GSP cannot purchase grapes or fruit from other growers in order to supplement its own stock. A GSP cannot produce the wine themselves, but may have their grapes custom crushed and bottled by another licensed winery. An applicant should file the GSP license application and the TTB Wholesaler Basic Permit application at the same time.

• OLCC GSP License Application
• TTB Wholesaler Basic Permit Application

Wholesale Malt Beverage and Wine License (WMBW)

A custom crush facility is a federally bonded, state-licensed winery that crushes and/or produces wine for other wineries. "Wholesale Malt Beverage and Wine" licenses may be obtained by custom crush customers who do not produce all their own grapes as required by the GSP license, nor have their own premises as required by a winery license. A “custom crush” arrangement involves an agreement or formal contract under which a customer pays a wine producer to produce wine to order, after which the customer markets the wine. In a custom crush arrangement, the wine producer is authorized by TTB to make wine and is entirely responsible for producing the wine and for all related processing steps and regulatory requirements, which may include tax payment. Please note that there are no retail privileges for WMBW Licenses except limited dock sales. Although specifically paying for the producer’s services under a custom crush agreement, the TTB treats this as if the grape grower has purchased wine at wholesale for resale. All wine received must be tax paid by the producing winery. Wine may not be received in bond.

• OLCC WMBW Overview
• TTB Wholesaler Basic Permit (producers or manufacturers need to apply for a Wholesaler's Basic Permit only if they intend to sell beverage alcohol products which they did not produce or manufacture)
• TTB New Wholesaler Application Checklist
• TTB Wholesaler Application Packet

Alternating Proprietorship

Alternating Proprietorship refers to those that would like to make wine for commercial purposes, but are not interested in building or buying a winery of their own. These companies find that sharing a winery facility with other companies will suit their purposes, and will qualify with TTB as an Alternating Proprietor winery. An alternating proprietorship is when two or more federally bonded, state-licensed wineries take turns using the same equipment, located at the same premises, following the federal regulations set for alternating proprietorships. It is not a custom crush arrangement. Each entity must qualify as a stand alone winery, obtain their own TTB Winery Basic Permit, and other TTB requirements as well as maintain their own records. Each entity would hold their own OLCC Winery License and maintain their own state reporting requirements.

• TTB Winery Basic Permit Application
• OLCC Winery License Application

Currently TTB requires a bond for a minimum of $1,000 for wineries. As of Jan. 1, 2017, a winery that files its TTB excise taxes annually (owes <$1,000 in excise taxes/year) or quarterly (owes ≤ $50,000 excise taxes/year) will be exempt from the bond requirement. The TTB bond exemption will not be automatically granted. Existing qualifying wineries must notify the TTB that they believe they are eligible for a bond exemption and request a bond termination by filing an amended Application to Establish and Operate Wine Premises form, and checking the box in question nine stating the winery is not required to hold a bond. Per temporary rule 27 CFR 24.160, TTB will require that all reports, returns and tax payments are filed in order to determine if a bond exemption is in fact available.

• DWT TTB Bond Handout

The Food Safety Modernization Act (FSMA) put into place a number of new food safety requirements that apply to wine grape growing and the production of wine. Fortunately many of the new FSMA rules specifically exempt alcohol companies from their requirements. However a number of requirements still apply and are being brought to your attention in case of compliance audits. Learn more in this FSMA overview for the wine industry. Wineries must register biennially as a food facility with the Food and Drug Administration and must follow current good manufacturing practices under the Preventive Controls for Human Food Rule. Although winegrowers can qualify for a processing exemption for the Produce Safety Rule when the grapes grown will be turned into wine, winegrowers are still subject to certain record-keeping requirements. The requirements for winegrowers under the Produce Safety Rule can be found in this FSMA Produce Safety Rule Compliance Guide. The related compliance dates for the written assurance requirements have been extended by two years and will not take effect until at least Jan. 27, 2020 depending on the size of business.