Wine Advising as a Business

[FutureFarm]

In our travels we’ve stumbled across a few very very small “wineries”. They seem to be doing 6 gallon batches. They all seem to offer custom wines where the winery consults with the customer about what the goals for the batch are, ferment and age on site, then when it comes to bottling, the customer comes back with friends for a bottle party.

Most of these tiny wineries sell individual bottles and glasses too so I assume they have federal and state licensing. A few seem to have been by appointment only and not have individual bottles or tastings for sale.

Let’s suppose I wanted to grow more grapes than my family 200 gallon limit could handle. Could I legally and without license:
Sell grapes to local home brewers? I assume yes.
Sell destemmed and crushed frozen grapes? I assume yes.
Sell a pdf instruction sheet on the process to turn grapes into wine? I assume yes. Even if the customer can call for specific advice.
Rent out equipment like presses, destemmers, carboys, bottling equipment. I assume yes.

Now I’ll ask a question I haven’t been able to find an answer to.
Can I sell a customer grapes, yeast, oaking and fining consumables, rent them my equipment to destem, press and bottle their wine? If they store the carboy at their home, I really don’t see how this would run afoul of any law. What if the fermenting and aging wines were stored at my home and clearly labeled as another’s property?

I’m not trying to make a living off of this. I just enjoy the hobby and would like to make more than I can drink/justify giving away.

 

[Jovimaple]

I am not a lawyer, but I think if you had clear records showing that someone else paid for the materials, you would be okay. I am not sure you could make any kind of profit on the wine, though, without a license.

Different areas have different laws. If I were you, I would consult a lawyer before letting any operation get very big.

Edited to add that your area might have laws about rental space and equipment or small business zoning, etc. Best to check at least to find out what kind of fines you might get if you get caught.

 

[ratflinger]

Your last scenario - At this point you'd better be in a commercial environment with commercial equipment. At some point you are going to do enough that the authorities (Feds or State) are going to determine that you are in fact operating a winery without the proper licensing. They may arbitrarily do this. It cost them nothing to fine you for operating w/o a license but it will cost you hundreds of thousands to get that reversed. Jovimaple is correct that you had better consult with an attorney first.

Growing and selling grapes is an ag issue, so that is probably easy to do. Selling destemmed and crushed must puts you into selling foodstuffs. The FDA will want to talk to you.

Renting equipment is probably no more than creating a business to do that, so you will have form a business and pay taxes. Just remember, if someone gets sick and it's determined that it came from your carboy (no matter how sterile you claim it to be) they are going after you. If you don't have a business and business insurance for a shield then they are going to come at you personally. They can and will take everything - just ask OJ.

Unfortunately you probably aren't going to make a lot of money doing this hit or miss. I would think that getting a vineyard going would be 1st, perhaps even look to contract sell your grapes, maybe to a wine club.. Once you have a successful vineyard in operation then you'd be at the point to make decisions on which way to go.

 

[Snafflebit]

Rentable crushpad facilities for private or garagiste hobby winemakers were a “thing” about 10 years ago around California. I remember a few around where I live. People would buy a barrel’s worth of grapes, enough partners to stay under the 100 gallon limit, and the whole process would be managed on site. The only hands on requirement I recall was the purchaser of the wine had to pitch the yeast. I assume the process was vetted by lawyers and I never heard of it being legally tested. But I do not think any of these crushpads have survived. So, as a business it does not seem viable.

 

[FutureFarm]

@Snafflebit This is probably pretty close to what I had imagined. I'm not expecting this to be my primary source of income. If it is just positive, that's good enough for me.

I guess a simplified question would be, can you hire someone to produce your 100 gallons/person of homebrew? If not, how involved does the buyer need to be? I understand you can't sell wine without a license but can you sell your knowledge/talent? Homebrew stores are allowed to sell grain, yeast, hops, and all the equipment to make beer/wine to people under 21 without selling beer to minors.

 

[cmason1957]

@Snafflebit This is probably pretty close to what I had imagined. I'm not expecting this to be my primary source of income. If it is just positive, that's good enough for me.

I guess a simplified question would be, can you hire someone to produce your 100 gallons/person of homebrew? If not, how involved does the buyer need to be? I understand you can't sell wine without a license but can you sell your knowledge/talent? Homebrew stores are allowed to sell grain, yeast, hops, and all the equipment to make beer/wine to people under 21 without selling beer to minors.

The answer to all your questions probably need to come from someone with a law license specifically specializing in ATF (Alcohol, Tobacco, Firearms) laws. I would assume that any answer you find here, other than 100 gallons/person (max 200 per household) to be suspect and even that one is wrong in some jurisdictions and has some other restrictions based on State laws.

 

[Snafflebit]

True, any business activity that develops a whiff of tax-avoidance will raise the ire of governments. Of course there is also lots of activity that flies under the radar.

Rather than worry about the Po Po knocking down the cellar door, I would focus on if the business model makes sense.

 

[FutureFarm]

I think what I “re-discovered” was brew on premises business model with more guidance/help. I’d seen that used for beer a couple places but never one focused on wine. Is anyone here doing something like that? What kind of licensing is required? If the wine is fermented/aged at the customer’s house, does anything change?

 

[ChuckD]

any business activity that develops a whiff of tax-avoidance will raise the ire of governments.

Almost every billionaire would disagree!

But yes… consult a tax professional too.

 

[Rice_Guy]

Future, what you are suggesting sounds shaky. If it truly is a business then the city, county, and state food processing regulations will be involved. A start might be your county or city health department which can point to the state regulations.

The brew on premises concept seems to be common in Canada due to regulations. There is one a few hours away which is operating as a licensed winery.