UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-KSB

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000
                                    Commission File No 0-21522


                  WILLAMETTE VALLEY VINEYARDS, INC.

            (Name of Small Business Issuer in Its Charter)
OREGON                                            93-0981021
(State or other jurisdiction of              (I.R.S. employer
incorporation or organization)          identification number)

                      8800 Enchanted Way, S.E.
                          Turner, OR 97392
              (Address of principal executive offices,
                         including zip code)

                            (503) 588-9463
         (Issuer's telephone number, including area code)

            _______________________________________

Securities registered pursuant to Section 12(b) of the Act: Common
Stock

Securities registered pursuant to Section 12(g) of the Act:  None

Check whether the Issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the Issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES  [X] NO [ ]

Check if there is no disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of the Issuer's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB [X].

                                      As of December 31, 2000

Issuer's revenues for its most recent fiscal year:    $6,716,857

Aggregate market value of the voting stock held by
non-affiliates of the Issuer based upon the closing
bid price of such stock:                          $6,248,982

Number of shares of Common Stock outstanding:      4,254.481

Transitional Small Business Disclosure Format:     YES [ ] No [X]


                 DOCUMENTS INCORPORATED BY REFERENCE
ITEM 1.     DESCRIPTION OF BUSINESS

Introduction

Willamette Valley Vineyards, Inc. (the "Company") was formed in
May 1988 to produce and sell premium, super premium and ultra
premium varietal wines (i.e., wine which sells at retail prices
of $7 to $14, $14 to $20 and over $20 per bottle, respectively).
Willamette Valley Vineyards was originally established as a sole
proprietorship by Oregon winegrower Jim Bernau in 1983.  The
Company's wines are made from grapes grown at its vineyard (the
"Vineyard") and from grapes purchased from other nearby vineyards.
The grapes are crushed, fermented and made into wine at the
Company's winery (the "Winery") and the wines are sold principally
under the Company's Willamette Valley Vineyards label.  The
Company's Vineyard and Winery are located on 75 acres of Company-
owned land adjacent to Interstate 5, approximately two miles south
of Salem, Oregon.

The Company owns 146 acres of vineyard land.  Fifty acres of planted
vineyards-42 acres producing and 8 acres in development, which
includes a grafting of 8 acres to Pinot Noir in 1999 at the Turner
site. In April 1997, the Company acquired 100 percent of the
outstanding stock of Tualatin Vineyards, Inc. (TVI), adding 83
acres of producing vineyard, 60 more plantable acres and an
additional 20,000 cases of winemaking capacity.  The purchase
price paid by the Company to the Tualatin Valley shareholders in
exchange for their shares was $1,824,000 plus Tualatin Vineyards'
current assets minus their current and long-term liabilities as
reflected in their balance sheet dated April 15, 1997.  The
Company paid 35 percent of the purchase price in the form of cash
with the balance paid through the issuance of shares of the
Company's common stock at an agreed price per share.  The final
purchase price was $1,988,601 paid to the Tualatin Vineyard, Inc.
shareholders.

In December 1999, the Company sold one parcel of three parcels
offered for sale at its Tualatin Estate Vineyard. The Company
entered into an agreement with the new owners to lease back the
land for farming the grapes for use in the Company's Estate
bottling program. The final purchase price paid was $1,500,000
for the 80-acre parcel. The lease is for twenty years with three
5-year renewals at the Company's option. The Company continues
to offer the two remaining properties and equipment on the same
type of sale/leaseback arrangement. One parcel contains 75 acres
priced at $808,700 and the last parcel, which contains the
Tualatin Estate winery plus 115 acres, is priced at $1,825,000.

The Company also leases O'Connor Vineyards on a ten-year contract
adding an additional 54 producing acres.  All of these highly
regarded vineyards are within the Willamette Valley Appellation.


Products

Under its Willamette Valley Vineyards label, the Company
currently produces and sells the following types of wine in
750 ml bottles: Pinot Noir, the brand's flagship and its
largest selling varietal in 2000, from $15 to $60 per bottle;
Chardonnay, from $14 to $25 per bottle; Pinot Gris, $14 per
bottle; Riesling, Gewurztraminer and Oregon Blossom (blush blend),
$9 per bottle.  As a convenience to our restaurant customers, the
Company produces some of its products in larger sized packages.
This brand's mission is to become the premier producer of Pinot
noir from the Pacific Northwest.

The Company currently produces and sells small quantities of Oregon's
Nog (a seasonal holiday product), $10 per bottle, under a "Made in
Oregon Cellars" label.

Under its Tualatin Estate Vineyards label, the Company currently
produces and sells the following types of wine in 750 ml bottles:
Pinot Noir, the brand's flagship, $28 per bottle; Chardonnay, $14
per bottle; Semi-Sparkling Muscat, $15 per bottle; Gewurztraminer,
$9 per bottle; and Pinot Blanc, $14 per bottle.  This brand's
mission is to be among the highest quality estate producers of
Burgundy and Alsatian varietals in Oregon.

In November 1998, the Company released a new label under the
Griffin Creek brand name, which the company owns.  This
represents a joint effort between the Company and Quail Run
Vineyards to develop a new brand of wines from the Southern
Oregon growing region.  Currently, the Company has several
varieties under this label: Merlot, the brand's flagship, $35
per bottle; Syrah, $35 per bottle; Cabernet Sauvignon, $40 per
bottle; Pinot Gris, $18 per bottle; Chardonnay, $30 per bottle;
Viognier, $30 per bottle; and Pinot Noir, $27 per bottle.  This
brand's mission is to be the highest quality producer of Bordeaux
and Rhone varietals in Oregon.



Market Overview

Wine Consumption Trends:  Wine consumption in the United States
declined from 1987 to 1994 due to increased consumer health
concerns and a growing awareness of alcohol abuse.  That decline
was led by sharp reductions in the low-cost non-varietal ("jug")
wine and wine cooler segments of the market, which, prior to 1987,
were two of the fastest growing market segments.  Beginning in 1994,
per capita wine consumption began to rise.  The Company estimates
that premium; super premium and ultra premium wine consumption will
experience a moderate increase over the next few years.  Consumers
have restricted their drinking of alcoholic beverages and view
premium, super premium and ultra premium wines as a beverage of
moderation.  The Company believes this change in consumer
preference from low quality, inexpensive wines to premium, super
premium and ultra premium wines reflects, in part, a growing
emphasis on health and nutrition as a principal element of the
contemporary lifestyle as well as an increased awareness of the
risks associated with alcohol abuse.

The Oregon Wine Industry.

Oregon is a relatively new wine-producing region in comparison to
California and France.  In 1966, there were only two commercial
wineries licensed in Oregon.  By contrast, in 2000, there were
133 commercial wineries licensed in Oregon and over 10,500 acres
of wine grape vineyards, 8,100 acres of which are currently
producing.  Total production of Oregon wines in 2000 is estimated
by the Company to be approximately 774,000 cases.  Oregon's entire
2000 production would have an estimated retail value of
approximately $154.8 million, assuming a retail price of $200 per
case, and a FOB value of approximately one-half of the retail
value, or $77.4 million.

Because of climate, soil and other growing conditions, the
Willamette Valley in western Oregon is ideally suited to growing
superior quality Pinot Noir, Chardonnay, Pinot Gris and Riesling
wine grapes.  Some of Oregon's Pinot Noir and Chardonnay wines
have developed outstanding reputations, winning numerous national
and international awards.

Oregon wine producers enjoy certain cost advantages over their
California and French competitors due to lower costs for grapes,
vineyard land and winery sites.  For example, the average cost of
unplanted vineyard land in Napa County, California is
approximately $40,000 per acre as compared to approximately
$6,000 per acre in Oregon.  In the Burgundy region of France,
virtually no new vineyard land is available for planting.

Oregon does have certain disadvantages, however.  As a new wine-
producing region, Oregon's wines are relatively little known to
consumers worldwide and the total wine production of Oregon
wineries is small relative to California and French competitors.
Greater worldwide label recognition and larger production levels
give Oregon's competitors certain financial, marketing,
distribution and unit cost advantages.  Furthermore, Oregon's
Willamette Valley has an unpredictable rainfall pattern in early
autumn.  If significantly above-average rains were to occur just
prior to the autumn grape harvest, the quality of harvested
grapes could materially diminish thereby affecting that year's
wine quality.  Finally, phylloxera, an aphid-like insect that
feeds on the roots of grapevines, has been found in several
commercial vineyards in Oregon.  Contrary to the California
experience, most Oregon phylloxera infestations have expanded
very slowly and done only minimal damage.  Nevertheless,
phylloxera does constitute a significant risk to Oregon
vineyards.  Prior to the discovery of phylloxera in Oregon, all
vine plantings in the Company's Vineyard were with non-resistant
rootstock.  As of December 31, 2000, the Company has not detected
any phylloxera at its Turner site.  Beginning with the Company's
plantings in May 1992, only phylloxera-resistant rootstock was
planted until 1997, when the previous management planted non-
resistant rootstock on approximately 10 acres at the Tualatin
Vineyard.  In 1997, the Company purchased Tualatin Vineyards,
which has phylloxera at its site.  Since the Third Quarter of
1997, all plantings have been and all future planting will be
on phylloxera resistant rootstock.  The Company takes all
necessary precautions to prevent the spread of phylloxera to its
Turner site.  Also phylloxera is active at the O'Connor Vineyard
for which the Company has a 10-year lease.  Any planting, training,
and care of new plants at the O'Connor vineyard will not be at the
expense of the Company.

Several significant developments in the Oregon wine industry have
taken place over the past ten years.  Robert J. Drouhin, a well-
known producer of French wines, purchased vineyard land near
Dundee, Oregon on which he has planted a vineyard and constructed
a winery.  Napa Valley's Girard and Stag's Leap Wineries have
formed a partnership and purchased vineyard land in the
Willamette Valley where they have planted a vineyard and begun
harvesting Pinot Noir grapes.  Brian Croser (a noted Australian
winemaker), in partnership with Cal Knudsen (an original investor
in Erath Vineyards) and the French Champagne firm, Taittinger,
established the Dundee Wine Company.  Their wines, under the
Argyle label, have received recognition for sparkling wines, Dry
Riesling, Chardonnay and Pinot Noir.  In 1992, a California
vineyard investor planted a vineyard consisting of over 200 acres
of Pinot Noir grapes across Interstate 5 and within sight of the
Company's Winery.

In 1994, the largest development in the Oregon wine industry,
King Estate Winery, was completed.  The facility, which is
located 22 miles southwest of Eugene, is approximately 100,000
square feet in size surrounded by a 180-acre vineyard.  King
Estate is focused on serving the national market.  The Company
views King Estate as a welcome addition to the Oregon wine
industry and believes they could have the same positive effect
on wine exports as St. Michelle Winery has had on the Washington
wine industry.  The most recent high-profile move in Oregon was
the Benziger family's purchase of 65 acres, including 32
producing acres of vineyard, near Scholls.  The Benziger family
created the huge Glen Ellen wine brand in California, before
selling it off to Grand Metropolitan.  Well known California
winemaker Tony Soter is making Oregon Pinot noir under the Etude
label.  The Company believes that further investments by other
experienced wine producers will continue, ultimately benefiting
the Company and the Oregon wine industry as a whole by bringing
increased international recognition to the quality of Oregon wines.

As a result of these factors, the Company believes that long-
term prospects for growth in the Oregon wine industry are
excellent.  The Company believes that over the next 20 years
the Oregon wine industry will grow at a faster rate than the
overall domestic wine industry, and that much of this growth
will favor producers of premium, super premium and ultra premium
wines such as the Company's.


Company Strategy

The Company, as one of the largest wineries in Oregon, believes
its success is dependent upon its ability to: (1) grow and
purchase high quality vinifera wine grapes; (2) vinify the
grapes into premium, super premium and ultra premium wine; and
(3) achieve significant brand recognition for its wines, first
in Oregon and then nationally and internationally.  The Company's
goal is to continue as one of Oregon's largest wineries, and
establish a reputation for producing some of Oregon's finest,
most sought after wines.

Based upon several highly regarded surveys of the US wine
industry, the Company believes that successful wineries exhibit
the following four key attributes:  (i) focus on production of
high-quality premium, super premium and ultra premium varietal
wines;  (ii) achieve brand positioning that supports high bottle
prices for its high quality wines;  (iii) build brand recognition
by emphasizing restaurant sales; and  (iv) development of the
strong marketing advantages (such as a highly visible winery
location and successful self-distribution).

The Company has designed its strategy to address each of these
attributes.

To successfully execute this strategy, the Company has assembled
a team of accomplished winemaking professionals, and has
constructed and equipped a 22,934 square foot state-of-the-art
Winery and a 12,500 square foot outdoor production area for the
crushing, pressing and fermentation of wine grapes.

The Company's marketing and selling strategy is to sell its
premium, super premium and ultra premium cork finished wine
through a combination of  (i) direct sales at the Winery,
(ii) self-distribution to local and regional restaurants and
retail outlets, and  (iii) sales through independent
distributors and wine brokers who market the Company's wine
in specific targeted areas where self-distribution is not
economically feasible.  Most of the Company's wines are sold
under its Willamette Valley Vineyards label.

The Company believes the location of its Winery next to
Interstate 5, Oregon's major north-south freeway,
significantly increases direct sales to consumers and
facilitates self-distribution of the Company's products.
The Company believes this location provides high visibility
for the Winery to passing motorists, thus enhancing recognition
of the Company's products in retail outlets and restaurants.
The Company's Hospitality Center has further increased the
Company's direct sales and enhanced public recognition of its wines.


Vineyard

The Property.  The Company's estate vineyard at the Turner site
currently has 50 acres planted and 42 acres producing which
includes 17 acres of Pinot Noir and 8 acres of Riesling grape
vines planted in 1985, which were grafted to Pinot Noir in 1999.
The Company planted 8 acres of Pinot Gris vines in May 1992 and
6 acres of Chardonnay (Espiguette clone) vines in 1993.  In 1996,
the Company planted its remaining 11 acres in Chardonnay (Dijon
clones) and Pinot Gris.  Grapevines do not bear commercial
quantities until the third growing season and do not become
fully productive until the fifth to eighth growing season.
Vineyards generally remain productive for 30 to 100 years,
depending on weather conditions, disease and other factors.

The Vineyard uses an elaborate trellis design known as the Geneva
Double Curtain.  The Company has incurred the additional expense
of constructing this trellis because it doubles the number of
canes upon which grape clusters grow and spreads these canes for
additional solar exposure and air circulation.  Research and
practical applications of this trellis design indicate that it
will increase production and improve grape quality over
traditional designs.

The purchase of Tualatin Vineyards, Inc. in April 1997 (including
the subsequent sale-leaseback of a portion of the property in
December 1999) added 83 acres of additional producing vineyards
and some 60 acres of bare land for future plantings.  In 1997,
the Company planted 19 acres at the Tualatin site and planted
another 41 acres in 1998, the majority being Pinot Noir, which
is the Company's flagship varietal.  All of the new planting
will be available to harvest in the next two to four years.

Also in 1997, the Company entered into a 10-year lease with
O'Connor Vineyards (54 acres) located near Salem to manage and
obtain the supply of grapes from O'Connor Vineyards.

In 1999, the Company purchased 33 acres of vineyard land
adjoining Tualatin Estate for future plantings and use the
lot line adjustment to create three separate land parcels
at Tualatin Estate.

The Company now controls 280 acres of vineyard land.  At full
production, these vineyards should enable the Company to grow
approximately 50% of the grapes needed to meet the Winery's
ultimate production capacity of 298,000 gallons (124,000 cases).

Grape Supply.  In 2000, the Company's 42 acres of producing
estate vineyard yielded approximately 109 tons of grapes for
the Winery's twelfth crush.  Tualatin Vineyards produced 173
tons of grapes in 2000.  O'Connor Vineyards produced 129 tons
of which about 7% were sold to other wineries because of previous
commitments.  In 2000, the Company purchased an additional 822
tons of grapes from other growers. The Winery's 2000 total wine
production was 214,206 gallons (90,097 cases) from its 1999 crush,
and 21,015 gallons (8,839 cases) from its 2000 crush. The Company
expects to produce an additional 175,588 gallons in 2001 (73,854
cases) from its 2000 crush.  The Vineyard cannot and will not
provide the sole supply of grapes for the Winery's near-term
production requirements.  The Company has also entered into
grape purchase contracts with certain directors or their
respective affiliates of the Company.  See "CERTAIN
TRANSACTIONS."

The Company fulfills its remaining grape needs by purchasing
grapes from other nearby vineyards at competitive prices.
The Company believes high quality grapes will be available
for purchase in sufficient quantity to meet the Company's
requirements except in the Pinot Noir varietal, where there
is increasing demand.  The grapes grown on the Company's
vineyards establish a foundation of quality upon which the
purchase of additional grapes is built.  In addition, wine
produced from grapes grown in the Company's own vineyards
may be labeled as "Estate Bottled" wines.  These wines
traditionally sell at a premium over non-estate bottled wines.

Viticultural Conditions.  Oregon's Willamette Valley is recognized
as a premier location for growing certain varieties of high quality
wine grapes, particularly Pinot Noir, Chardonnay, Riesling and Pinot
Gris.  The Company believes that the Vineyard's growing conditions,
including its soil, elevation, slope, rainfall, evening marine
breezes and solar orientation are among the most ideal conditions
in the United States for growing certain varieties of high-quality
wine grapes.  The Vineyard's grape growing conditions compare
favorably to those found in some of the famous Viticultural regions
of France.  Western Oregon's latitude (42o-46o North) and
relationship to the eastern edge of a major ocean is very
similar to certain centuries-old wine grape growing regions of
France.  These conditions are unduplicated anywhere else in the
world except the great wine grape regions of Northern Europe.
The Company's property is located at the same latitude as the
famous Haut Brion vineyards in Bordeaux, France.

The Vineyard's soil type is Jory/Nekia, a dark reddish-brown silky
clay loam over basalt bedrock noted for being well drained, acidic,
of adequate depth, retentive of appropriate levels of moisture and
particularly suited to growing high quality wine grapes.

The Vineyard's elevation ranges from 533 feet to 700 feet above
sea level with slopes from 2 percent to 30 percent (predominately
12-20 percent).  The Vineyard's slope is oriented to the south,
southwest and west.  Average annual precipitation at the Vineyard
is 41.3 inches; average annual air temperature is 52 to 54 degrees
Fahrenheit, and the length of each year's frost-free season
averages from 190 to 210 days.  These conditions compare favorably
with conditions found throughout the Willamette Valley viticultural
region and other domestic and foreign viticultural regions, which
produce high quality wine grapes.

In the Willamette Valley, permanent vineyard irrigation is not
required.  The average annual rainfall provides sufficient moisture
to avoid the need to irrigate the Vineyard.  However, if the need
should arise, the Company's property contains one water well which
can sustain sufficient volume to meet the needs of the Winery and
to provide auxiliary water to the Vineyard for new plantings and
unusual drought conditions.


Winery

Wine Production Facility.  The Company's Winery and production
facilities, built at an initial cost of approximately $1,500,000,
were originally capable of producing up to 75,000 cases of wine per
year, depending on the type of wine produced.  In 1996 the Company
invested an additional $750,000 to increase its capacity from 75,000
cases to its present capacity of 104,000 cases (250,000 gallons).
It added one large press, six stainless steel fermenters, and
handling equipment to increase its capacity to the new level.
It also expanded the size of its crush pad to meet the needs of
the additional tons of grapes crushed.  In 2000, the Winery
produced 214,206 gallons (90,097 cases) of wine from its 1999 crush,
and 21,015 gallons (8,839 cases) from its 2000 crush.  The Winery is
12,784 square feet in size and contains areas for the processing,
fermenting, aging and bottling of wine, as well as an underground
wine cellar, a tasting room, a retail sales room and administrative
offices.  A 12,500 square foot outside production area was added for
the crushing, pressing and fermentation of wine grapes.  In 1993, a
4,000 square foot insulated storage facility with a capacity of
30,000 cases of wine was constructed at a cost of approximately
$70,000.  This facility was converted to barrel storage in 1998
in order to accommodate an additional 750 barrels for aging wines.
This change increases the Company's barrel aging capacity at the
Turner site.  The production area is equipped with a settling tank
and sprinkler system for disposing of wastewater from the
production process in compliance with environmental regulations.
The settling tank and sprinkler system were installed at a
total cost of approximately $20,000.

In 1997, the Company constructed a 20,000 square foot storage
building to store all if its bottled product at an approximate
cost of $750,000.  Previously, the Company rented a storage
facility with an annual rental cost to the Company of $96,000.

With the purchase of Tualatin Vineyards, Inc., the Company added
20,000 square feet of additional production capacity.  Although
the Tualatin facility was constructed over twenty years ago, it
adds 20,000 cases of wine production capacity to the Company,
which the Company felt at the time of purchase was needed.  To
date, production and sales volumes have not expanded enough to
necessitate the utilization of the Tualatin facilities.  The
Company decided to move current production to its Turner site
to meet short-term production requirements.  The capacity at
Tualatin is available to the Company to meet any future
production expansion needs.

Construction of Hospitality Facility.  In May 1995, the Company
completed construction of a large tasting and hospitality
facility of 19,470 square feet (the "Hospitality Center").
The first floor of the Hospitality Center includes retail sales
space and a "great room" designed to accommodate approximately
400 persons for gatherings, meetings, weddings and large wine
tastings.  An observation tower and decking around the
Hospitality Center enables visitors to enjoy the view of the
Willamette Valley and the Company's Vineyard.  The Hospitality
Center is joined with the present Winery by an underground
cellar tunnel.  The facility includes a basement cellar of
10,150 square feet (including the 2,460 square foot underground
cellar tunnel) to expand storage of the Company's wine in a
proper environment.  The cellar provides the Winery with ample
space for storing up to 1,600 barrels of wine for aging.

Just outside the Hospitality Center, the Company has planned a
landscaped park setting consisting of one acre of terraced lawn
for outdoor events and five wooded acres for picnics and social
gatherings.  The area between the Winery and the Hospitality
Center forms a 20,000 square foot quadrangle.  As designed, a
removable fabric top making it an all-weather outdoor facility
to promote sale of the Company's wines through outdoor festivals
and social events can cover the quadrangle.

The Company believes the addition of the Hospitality Center and
the park and quadrangle has made the Winery an attractive
recreational and social destination for tourists and local
residents, thereby enhancing the Company's ability to sell its
wines.

Mortgages on Properties.  The Company's winery facilities are
subject to two mortgages with a principal balance of $3,228,752
at December 31, 2000 and $3,584,123 at December 31, 1999. The
mortgages are payable in annual aggregate installments
including interest of approximately $350,000 through 2012.
After 2012, the Company's annual aggregate mortgage payment
including interest will be approximately $75,000 until the year
2014.  The mortgage on the Turner site had a principal balance
of $2,510,484 on December 31, 2000. The mortgage on the Tualatin
Valley property, issued in April 1997 to fund the acquisition of
the property and development of its vineyard, had a principal
balance of $718,268 on December 31, 2000, after the Company made
an additional payment of approximately $471,000 in December 1999.
The additional payment was made as a result of the Company
selling a parcel of the Tualatin Valley property under a sale-
leaseback agreement.

Wine Production.  The Company operates on the principle that
winemaking is a natural but highly technical process requiring
the attention and dedication of the winemaking staff.  The
Company's Winery is equipped with the latest technical
innovations and uses modern laboratory equipment and computers
to monitor the progress of each wine through all stages of the
winemaking process.

Beginning with the Company's first vintage in 1989, the
Company's annual grape harvest and wine production are as follows:

Tons of
Grapes      Production                            Cases
Crush Year   Crushed        Year                 Produced

1989          203
1990          206           1990                  13,200
1991          340           1991                  13,400
1992          565           1992                  22,100
1993          633           1993                  38,237
1994          590           1994                  41,145
1995          885           1995                  40,411
1996         1290           1996                  53,693
1997         1426           1997                  91,793
1998         1109           1998                  77,064
1999         1383           1999                  81,068
2000         1223           2000                  98,936

The quantity of grapes crushed in 1997 does not include 228 tons
 of grapes that were purchased and resold on the open market
because the Company had contracted for more grapes than were
needed.  The Company was unable to sell 270 tons of grapes
before crush; this tonnage converts to 44,000 gallons of bulk
wine that the Company sold in 1998.


Sales and Distribution

Marketing Strategy.  The Company markets and sells its wines
through a combination of direct sales at the Winery, sales
directly and indirectly through its shareholders, self-
distribution to local restaurants and retail outlets in Oregon,
directly through mailing lists, and through distributors and
wine brokers who sell in specific targeted areas outside of
the state of Oregon.  As the Company has increased production
volumes and achieved greater brand recognition, sales to other
domestic markets have increased both in terms of absolute
dollars and as a percentage of total Company sales.

Direct Sales.  The Company's Winery is located adjacent
to the state's major north-south freeway (Interstate 5),
approximately 2 miles south of the state's third largest
metropolitan area (Salem), and 50 miles in either direction
from the state's first and second largest metropolitan areas
(Portland and Eugene, respectively).  The Company believes the
Winery's unique location along Interstate 5 has resulted in a
greater amount of wines sold at the Winery as compared to the
Oregon industry standard.  Direct sales from the Winery are an
important distribution channel and an effective means of product
promotion.  To increase brand awareness, the Company offers
educational Winery tours and product presentations by trained
personnel.

The Company holds four major festivals and events at the Winery
each year.  In addition, open houses are held at the Winery
during major holiday weekends such as Memorial Day, Independence
Day, Labor Day and Thanksgiving, where barrel tastings and cellar
tours are given.  Numerous private parties, wedding receptions,
political and other events are also held at the Winery.  Finally,
the Company participates in many wine and food festivals
throughout Oregon.  Each of these events results in direct sales
of the Company's wines and promotion of its label to event
attendees.

Direct sales are profitable because the Company is able to sell
its wine directly to consumers at retail prices rather than to
distributors or retailers at wholesale prices.  Sales made
directly to consumers at retail prices result in an increased
profit margin equal to the difference between retail prices and
distributor or wholesale prices, as the case may be.  For 2000,
direct sales make up approximately 20% of the Company's revenue.

Self-Distribution.  The Company has established a self-
distribution system to sell its wines to restaurant and retail
accounts located primarily in Oregon.  Eighteen sales
representatives who market the Company's wine exclusively,
take wine orders and make deliveries on a commission-only basis
currently carry out the self-distribution program.  A few of
these sales representatives are supported by Company provided
trucks and delivery drivers.  The Company believes this program
of self-representation and delivery has allowed its relatively
new wines to gain a strong presence in the Oregon market with
over 1,000 restaurant and retail accounts established as of
December 31, 2000.  The Company further believes that the
location of its Winery along Interstate 5 facilitates self-
distribution throughout the entire Willamette Valley, where
approximately 70% of Oregon's population resides.

The Company has expended significant resources to establish its
self-distribution system.  The system initially focused on
distribution in the Willamette Valley, but then expanded to the
Oregon coast, and then into southern Oregon.  For 2000,
approximately 42% of the Company's net revenues were
attributable to self-distribution.

Distributors and Wine Brokers.  The Company uses both
independent distributors and wine brokers primarily to market
the Company's wines in specific targeted areas where self-
distribution is not feasible.  Only those distributors and wine
brokers who have demonstrated knowledge of and a proven ability
to market premium, super premium, and ultra premium wines are
utilized.

Shareholders.  As a consumer-owned company, the Company has a
unique marketing opportunity available to only a few of its
competitors.  The Company has approximately 3,173 shareholders
of record, which represents approximately 5,000 wine consumers
since family members hold many shares jointly.  The Company
believes its shareholders, as a group, purchase a significant
portion of the Company's cork-finished wines directly from the
Winery.

Tourists.  Oregon wineries are experiencing an increase in on-
site visits by consumers.  In California, visiting wineries is
a very popular leisure time activity.  Napa Valley is
California's second-largest tourist attraction with over 2.5
million visitors in 1987.  Wineries in Washington are also
experiencing strong interest from tourists.  Chateau Ste.
Michelle, located near Woodinville, Washington, attracts
approximately 200,000 visitors per year.

The Winery is located less than one mile from The Enchanted
Forest, a gingerbread village/forest theme park that, in 1985,
was Oregon's eleventh most visited tourist attraction (fifth
among those charging admission).  The Enchanted Forest, which
operates from March 15 to September 30 each year, attracts
approximately 200,000 paying visitors per year.  Adjacent to
the Enchanted Forest is the Thrillville Amusement Park and
the Forest Glen Recreational Vehicle Park, which contains
approximately 110 overnight recreational vehicle sites.  The
Company believes that some of the visitors to the Enchanted
Forest and RV Park do visit the Winery.  More importantly, the
Company believes its convenient location, adjacent to
Interstate 5, enables the Winery to attract a significant
number of visitors.

Competition

The wine industry is highly competitive.  In a broad sense,
wines may be considered to compete with all alcoholic and
nonalcoholic beverages.  Within the wine industry, the Company
believes that its principal competitors include wineries in
Oregon, California and Washington, which, like the Company,
produce premium, super premium, and ultra premium wines.  Wine
production in the United States is dominated by large California
wineries that have significantly greater financial, production,
distribution and marketing resources than the Company.
Currently, no Oregon winery dominates the Oregon wine market.
Several Oregon wineries, however, are older and better
established and have greater label recognition than the Company.

The Company believes that the principal competitive factors in
the premium, super premium, and ultra premium segment of the
wine industry are product quality, price, label recognition,
and product supply.  The Company believes it competes favorably
with respect to each of these factors.  The Company has received
good reviews in tastings of its wines and believes its prices
are competitive with other Oregon wineries.  Large production
is necessary to satisfy retailers' and restaurants' demand and
the Company believes that its current level of production is
adequate to meet that demand.  Furthermore, the Company believes
that its ultimate forecasted production level of 298,000 gallons
(124,000 cases) per year will give it significant competitive
advantages over most Oregon wineries in areas such as marketing,
distribution arrangements, grape purchasing, and access to
financing.  The current production level of most Oregon wineries
is generally much smaller than the projected production level of
the Company's Winery.  With respect to label recognition, the
Company believes that its unique structure as a consumer-owned
company will give it a significant advantage in gaining market
share in Oregon as well as penetrating other wine markets.


Governmental Regulation of the Wine Industry

The production and sale of wine is subject to extensive
regulation by the Federal Bureau of Alcohol, Tobacco and
Firearms and the Oregon Liquor Control Commission.  The
Company is licensed by and meets the bonding requirements
of each of these governmental agencies.  Sale of the
Company's wine is subject to federal alcohol tax; payable
at the time wine is removed from the bonded area of the
Winery for shipment to customers or for sale in its tasting
room.  The current federal alcohol tax rate is $1.07 per
gallon; however, wineries that produce not more than 250,000
gallons during the calendar year are allowed a graduated tax
credit of up to $0.90 per gallon on the first 100,000 gallons
of wine (other than sparkling wines) removed from the bonded
area during that year.  The Company also pays the state of
Oregon an excise tax of $0.67 per gallon on all wine sold
in Oregon.  In addition, all states in which the Company's
wines will be sold impose varying excise taxes on the sale
of alcoholic beverages.  As an agricultural processor, the
Company is also regulated by the Oregon Department of
Agriculture and, as a producer of wastewater; the Oregon
Department of Environmental Quality regulates it.  The
Company has secured all necessary permits to operate its
business.

Prompted by growing government budget shortfalls and public
reaction against alcohol abuse, Congress and many state
legislatures are considering various proposals to impose
additional excise taxes on the production and sale of
alcoholic beverages, including table wines.  Some of the
excise tax rates being considered are substantial.  The
ultimate effects of such legislation, if passed, cannot
be assessed accurately since the proposals are still in
the discussion stage.  Any increase in the taxes imposed
on table wines can be expected to have a potentially adverse
impact on overall sales of such products.  However, the
impact may not be proportionate to that experienced by
producers of other alcoholic beverages and may not be the
same in every state.  Recently, there have been national
efforts to reduce the legal blood alcohol level to .08 to
combat driving under the influence.  The Company believes
that if such legislation is passed, it may discourage wine
consumption in restaurants.  Although the .08 rule is in
effect in Oregon, the Company's principal sales territory,
it has not yet affected local restaurant sales although it
is possible that it will on a national level.


Employees

As of December 31, 2000 the Company had 53 full-time
employees and 17 part-time employees.  In addition,
the Company hires additional employees for seasonal
work as required.  The Company's employees are not
represented by any collective bargaining unit.  The
Company continues to believe it maintains positive
relations with its employees.


ITEM 2.     DESCRIPTION OF PROPERTY

See "DESCRIPTION OF BUSINESS -- Winery" and "-- Vineyard".


ITEM 3.     LEGAL PROCEEDINGS

There are no material legal proceedings pending to which the
Company is a party or to which any of its property is subject,
and the Company's management does not know of any such action
being contemplated.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders
during the Company's Fourth Quarter ended December 31, 2000.

5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's Common Stock is traded on the NASDAQ Small Cap
Market under the symbol "WVVI."  As of December 31, 2000,
there were 3,173 stockholders of record of the Common Stock.

The table below sets forth for the quarters indicated the
high and low bids for the Company's Common Stock as reported
on the NASDAQ Small Cap Market.  The Company's Common Stock
began trading publicly on September 13, 1994.

Quarter Ended

           3/31/00       6/30/00       9/30/00         12/31/00
High        $2.25          $2.00         $2.28           $2.06
Low         $1.50          $1.50         $1.50           $1.47

Quarter Ended

           3/31/99       6/30/99       9/30/99         12/31/99
High        $2.13          $2.13         $2.25           $2.50
Low         $1.50          $1.57         $1.63           $2.00

The Company has not paid any dividends on the Common Stock, and
it is not anticipated that the Company will pay any dividends in
the foreseeable future.


ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS

Forward Looking Statement

This Management's discussion and Analysis of Financial
Condition and Results of Operation and other sections of
this Form 10KSB contain forward-looking statements within
the meaning of the Private Securities Litigation Reform
Act of 1995.  Words such as "expects", "anticipates",
"intends", "plans", "believes", "seeks", "estimates", and
variations of such words and similar expressions are intended
to identify such forward-looking statements.  Such forward-
looking statements include, for example, statements regarding
general market trends, predictions regarding growth and other
future trends in the Oregon wine industry, expected
availability of adequate grape supplies, expected positive
impact of the Company's Hospitality Center on direct sales
effort, expected positive impacts on future operating results
from restructuring efforts, expected increases in future sales,
expected improvements in gross margin.  These forward-looking
statements involve risks and uncertainties that are based on
current expectations, estimates and projections about the
Company's business, and beliefs and assumptions made by
management.  Actual outcomes and results may differ materially
from what is expressed or forecasted in such forward-looking
statements due to numerous factors, including, but not limited
to:  availability of financing for growth, availability of
adequate supply of high quality grapes, successful performance
of internal operations, impact of competition, changes in wine
broker or distributor relations or performance, impact of
possible adverse weather conditions, impact of reduction in
grape quality or supply due to disease, impact of governmental
regulatory decisions, and other risks detailed below as well as
those discussed elsewhere in this Form 10KSB and from time to
time in the Company's Securities and Exchange Commission filing
and reports.  In addition, such statements could be affected by
general industry and market conditions and growth rates, and
general domestic economic conditions.


OVERVIEW


RESULTS OF OPERATIONS

The Management is continuing the transition to higher quality,
higher margin wines.  A careful selection and recruitment of
top Oregon winegrowers has lead to quality improvements in
purchased grapes and in the offering of Single Vineyard
Designated bottlings.  The recent plantings of new Pinot Noir
clones at Tualatin Estate, Willamette Valley Vineyards, and
O'Connor Vineyards are nearing maturity. Improvements in
production staffing and barrels, and discontinuing high
volume, lower priced product lines have sharpened winemaking
focus on the Company's flagship wines.  A higher level of
professionalism in the sales staff has improved the Company's
ability to present and sell high quality, high margin wines.

In fiscal year 2000, the Retail, Self-Distribution, and FOB
Departments showed increases in net contribution, after direct
departmental expenses, of 25%, 13%, and 44%, respectively,
from the previous year.  These increases resulted from careful
management of selling activities.  Profits were depressed by
higher general and administrative expenses, particularly
accounting expenses, professional fees, and bulk wines sales,
resulting in significant losses on those sales.  Although sales
are increasing, they have not reached the level to warrant a
restart of the Tualatin Winery facility or equipment.

Wine Quality

The Company's wine ratings are among the highest given to
Oregon produced wines.  In the January 2000 issue, "The Wine
Enthusiast" magazine rated the Willamette Valley Vineyard
Signature Cuvee Pinot Noir among the top 100 wines in the world
with a score of "93".

The annual review of Oregon Pinot Noirs by Clive Coates, Master
of Wine and Publisher of the "The Vine" rated the Willamette
Valley Vineyards Hoodview Single Vineyard Designate as the
leading Pinot Noir of the 1998 Oregon vintage.  Both the
"Wine Spectator" and "Wine Enthusiast" gave this wine a score
of "90".

Sales

Finished wine revenues increased 12% in 2000 from the previous
year.  Unit sales increased 22% from the previous year.  Case
depletions from the Winery increased from 71,886 in 1999 to 88,045
in 2000.  The significant increase in case depletions is due to
Management's efforts to reduce low demand white wine inventories
resulting from long-term grape contracts.  The Company's
distributors experienced a collective increase of 18% in
depletions of Company products to their retail customers in
2000.  Sales expenses decreased due to continued efforts to
improve efficiencies.  Management expects to continue to reduce
costs incurred in the year 2001 with the prospect of achieving
higher average margins on sales over time.  Long-term grape
contracts caused the Company to pay high prices for lower demand
white wines.  These contracts expired at the end of 2000.  As
these wines were sold in bulk or as finished case goods, they
reduced average margins.

Wine Inventory

The Company has built a substantial inventory of '98, '99 and
'00 vintage super premium, and ultra premium wines like Vintage
Pinot Noir, Single Vineyard Designated Pinot Noirs, and Griffin
Creek Bordeaux and Rhone varietals.  Total finished wine
inventory increased to 93,821 cases by year-end 2000 from 79,371
the previous year.  There are many factors that will affect the
Company's successful marketing of these wines, including whether
the wines maintain their quality through the time they are sold
and consumed, whether consumers will continue to enjoy these
varieties and to be willing to pay higher prices for these wines,
whether increased supply of these types of wines from the Company
and other sources will put downward pressure on prices, as well
as other factors, many of which Management cannot control.  In
addition, factors that affect the Company's ability to operate
profitably and implement the sales and marketing strategy may
affect the successful marketing of these wines.  Management
believes if these factors are successfully addressed, the Company
can profitably market these wines.

Seasonal and Quarterly Results.  The Company has historically
experienced and expects to continue experiencing seasonal
fluctuations in its revenues and net income.  In the past,
the Company has reported a net loss during its first quarter
and expects this trend to continue in future first quarters,
including the first quarter of 2001.  Sales volumes increase
progressively beginning in the second quarter through the fourth
quarter because of consumer buying habits.

The following table sets forth certain information regarding
the Company's revenues from Winery operations for each of the
last eight fiscal quarters:

              Fiscal 2000 Quarter Ended  Fiscal 1999 Quarter Ended
                     (in thousands)          (in thousands)
                3/31  6/30  9/30  12/31  3/31  6/30  9/30  12/31
Tasting room and
retail sales    $146  $255  $253   $284  $150  $227  $294   $302
On-site and off-site
festivals        133    77    91    149   114    86   135    168
In-state sales   418   715   755  1,011   416   497   627    872
Bulk/Grape sales   6     0   113    144    17    13     7     32
Out-of-state
sales            572   636   483    714   458   451   631    629
Total winery
revenues       1,275 1,683 1,695  2,302 1,155 1,274 1,694  2,003


Period-to-Period Comparisons

Revenue.  The following table sets forth, for the periods
indicated, select revenue data from Company operations:

Year Ended December 31
(in thousands)
                                    2000        1999        1998
Tasting room and retail sales      $ 938       $ 973       $ 937
On-site and off-site festivals       450         503         565
In-state sales                     2,899       2,412       2,278
Bulk /Grape Sales                    263          69         454
Out-of-state sales                 2,405       2,169       2,124
Revenues from winery operations   $6,955      $6,126      $6,358

Less Excise Taxes                    238         212         226

Net  Revenue                      $6,717      $5,914      $6,132

2000 Compared to 1999.

Tasting room sales for the year ended December 31, 2000 decreased
3.6% to $938,303 from $973,028 for the same period in 1999.
By offering higher quality wines in the tasting room and
discontinuing events with low net returns, the net contribution,
after direct departmental expenses, from the Retail Department
increased by $70,024 in 2000. The Company experienced a decrease
in revenue during 2000 in Hospitality rental income of $160,826
(included in the tasting room and retail sales category) over
$227,452 in the same period in 1999.

On-site and off-site festival sales and telephone sales for the
year ended December 31, 2000 decreased 11% to $449,558 from
$502,960 for the same period in 1999.  The Company eliminated
several on and off-site festivals by analyzing each event to
determine if the event was going to return a certain profit
percentage. The Company eliminated all on-site and off-site
events that were not profitable. Despite greater competition
from new event establishments,and a reduction in retail revenues,
the net contribution from the Retail Department improved by 25%.

Wholesale sales in the state of Oregon for the year ended
December 31, 2000, through the Company's independent sales
force, increased 20% to $2,898,870 from $2,412,266 for the
same period in 1999.  Oregon's retail wine environment is
dominated by large chain retailers.  For example, one large
retailer, remains the largest in-state customer of the Company.
The sales to this retailer were $979,755 in 2000, up from
$639,000 in 1999.  The net contribution, after direct expenses,
from the In-state Self Distribution Department increased by
$71,360, an increase of 13%.

Out-of-state sales for the year ended December 31, 2000,
increased 11% to $2,404,863 from $2,168,897 for the same
period in 1999.  The Pinot Noir variety led sales in 2000.
Higher sales and lower related expenses produced an increase
in the net contribution of $232,172 from the FOB Department,
an increase of 44% from the prior year.

The Company contracted in early 1997 on a long-term basis for
more grapes than needed to meet the revised sales forecasts in
the following few years.  The Company sold some of its own
grapes and some of its contracted grapes for $465,030 in 1997,
$454,281 in 1998 and $22,000 in 1999. It sold $18,526 of grapes
under contract in 2000.  These long-term grape contracts expired
at the end of 2000.  What the Company couldn't sell as grapes
was produced as bulk wine.  The losses the Company suffered
from bulk wine sales totaled $104,888 in 2000.  The only
remaining winegrape production that exceeds sales plans is
Chardonnay from the leased O'Connor Vineyard and the purchased
Tualatin Vineyard.  The significance of this imbalance between
fruit and sales forecasts is now reduced to approximately 3,000
cases of Chardonnay, annually.

The total excise taxes collected in 2000 were $238,072 as
compared to $211,824 in 1999.  Sales data in the discussion
above is quoted before the exclusion of excise taxes.

As a percentage of net revenue (i.e., gross sales less
related excise taxes), gross margin for all winery operations
was 47% for fiscal year 2000 as compared to 54% for 1999.
The sales of bulk wine at a loss and grapes at harvest at a
slim margin reduced the gross margin in 2000.  After
adjusting for these sales, the gross margin would be 55%
in 2000 compared to 54% in 1999.  Even though the sales
price increased in 2000 for many varieties, the average
sales price decreased due to the sale of low demand
inventory to institutional buyers at significant reductions
from frontline pricing. The Company has seen significant
increases in the cost of grapes, packaging and labor cost
in the past several years.

Selling, general, and administrative expenses for the year
ended December 31, 2000, decreased to $2,775,782 compared to
$2,901,594 for the same period in 1999.  As a percentage of
revenue from winery operations, the selling, general, and
administrative expenses were 41% in 2000 as compared to 49%
in 1999. The selling, general, and administrative expenses
decreased 4.3% in 2000 against expenses recorded in 1999.
The largest part of the decrease in expenses in 2000 over
1999 was improved management of sales expenses.  The
retirement of our Controller of 8 years lead to temporary
increases in accounting costs of $90,000 as the new
Controller transitioned and instituted new accounting systems.

Other income for the year ended December 31, 2000 was $169,305
as compared to $85,963 for the year ended December 31, 1999.
This increase was due in part to the settlement of litigation
regarding cork failures, and to rebates received from Farm Credit
Services.  Interest income decreased to $3,894 in fiscal year
2000 from $7,807 in fiscal year 1999.  Interest expense
increased to $547,216 in fiscal year 2000 from $483,723 in
fiscal year 1999.

The provision (benefit) for income taxes and the Company's
effective tax rate were $19,595 and 57% of pre-tax income in
fiscal year 2000 with $(22,880) or (20)% of pre-tax loss
recorded for fiscal year 1999.

As a result of the above factors, net income/(loss) increased
to $15,062 in fiscal 2000 from $(92,232) for fiscal year of
1999.  Earnings/(loss) per share were $.00, $(.02), and $(.02),
in fiscal years 2000, 1999, and 1998, respectively.


1999 Compared to 1998.

Tasting room sales for the year ended December 31, 1999
increased 4% to $973,028 from $936,585 for the same period
in 1998.  In 1996 and early 1997 the previous management
allowed the Wholesale Division to sell wine that in previous
years has been exclusively sold in the tasting room.  In 1998,
the Company returned to the practice of selling certain
exclusive wines in the tasting room at higher profit margins.
The tasting room had additional higher value products added
in 1998.  Specifically, a Founders' Pinot Noir, a Merlot from
Griffin Creek and a Founder Reserve Cabernet were available to
the customers at higher average prices. In 1999, the tasting
room added a Syrah and Viognier from Griffin Creek along with
a Signature Cuvee Pinot Noir from the Winemaker and several
Vineyard Designate Pinot Noirs, all retail at over $35 per
bottle. The Company has made an effort to build its brand by
the offering these higher quality wines in the tasting room.
The Company experienced an increase in revenue during 1999 in
Hospitality rental income of $227,452(included in the tasting
room and retail sales category) over $209,856 in the same
period in 1998.

On-site and off-site festival sales and telephone sales for
the year ended December 31, 1999 decreased 11% to $502,960
from $564,828 for the same period in 1998.  The Company had
a decrease in its sales by phone solicitation from $252,000
in 1998 to $183,000 in 1999.  The Company eliminated several
on and off-site festivals by analyzing each event to determine
if the event was going to return a certain profit percentage.
The Company eliminated all on-site and off-site events that
were not profitable.

Wholesale sales in the state of Oregon for the year ended
December 31, 1999, through the Company's independent sales
force, increased 6% to $2,412,266 from $2,277,676 for the
same period in 1998. This increase is not as significant as
in previous years due to the 1998 price increases, but the
Company still maintains a strong presence in its own home
state.  As the Oregon wine retail market is dominated by
large chain retailers, one large retailer, remains the
largest in-state customer of the Company.  The sales to
this retailer were $639,000 in 1999, up from $463,000 in
1998.  Beginning July 1, 1998, the Company increased the
price of its wine by an average of 8% in state. The Company's
average sales price increased due to its successful
introduction of its higher-priced, higher-margin Griffin
Creek product line. However, this was offset by a decrease
in the number of cases sold in Oregon. For the year 1999,
the total number of cases sold was 30,440 as compared to
32,412 in 1998. The decrease was related to the elimination
of the Company's lower-priced, lower-margin "Oregon Trail
and Lot 27/28" Pinot Noir and Chardonnay from its product
line. Both of these products were replaced by the Company's
Vintage series in the grocery stores and restaurants
throughout Oregon.

The Company contracted in early 1997 for more grapes than
needed to meet the revised sales forecasts in the next few
years.  The Company sold some of its own grapes and some of
its contracted grapes for $465,030 in 1997 and $454,281 in
1998. It sold approximately $22,000 of grapes under contract
in 1999.

Out-of-state sales for the year ended December 31, 1999,
increased 2% to $2,168,897 from $2,124,826 for the same
period in 1998.  The Pinot Noir variety led sales in 1999.
The total cases sold decreased from 26,921 cases in 1998 to
22,637 cases in 1999.  The Vintage and Whole Cluster Pinot
Noir products decreased in case sales 14% in 1999 over 1998
yet the revenue only decreased 3% between the two years.
Pinot Noir, which now constitutes about one-third of the
Company's production, is among the fastest growing wine
varietals.  Positive press, regarding the healthful use of
wine, continues to stimulate demand.  The Company expects
demand for its wines to continue to increase.  However, the
Company notes that new formidable entries into the Oregon
wine industry from out of state will increase competition
and put additional pressure on Pinot Noir grape supplies.

In 1999, vintage Chardonnay sales to distributors decreased
from 2,813 cases in 1998 to 2,112 cases in 1999.  A large
part of the decrease was due to favorable pricing offered
to distributors to reduce the Company's excess inventory
in 1998.

The total excise taxes collected in 1999 were $211,824 as
compared to $225,842 in 1998.  Before 1996, excise taxes
were included in the "selling, general, and administrative
expenses". Sales data in the discussion above is quoted
before the exclusion of excise taxes.

As a percentage of net revenue (i.e., gross sales less
related excise taxes), gross margin for all winery operations
was 54% for fiscal year 1999 as compared to 50% for 1998.
The sales of bulk juice and grapes at harvest at a slim
margin reduced the gross margin in 1998.  After adjusting
for these sales, the gross margin would be 54% in 1999 as
compared to 54% in 1998.  Even though the average sales
price increased in 1999 as compared to 1998, the gross
margin remained the same for both periods. The Company has
seen significant rises in the cost of grapes, packaging and
labor cost in the past several years.

Selling, general, and administrative expenses for the year
ended December 31, 1999, increased to $2,901,594 compared to
$2,694,488 for the same period in 1998.  As a percentage of
revenue from winery operations, the selling, general, and
administrative expenses were 49% in 1999 as compared to 44%
in 1998. The selling, general, and administrative expenses
increased 6% in 1999 against expenses recorded in 1998.

The largest part of the increase in expenses in 1999 over
1998 was the addition of several key managers in 1999.  West
Coast and East Coast Sales Managers were hired to bring about
a change in the Company's sales management team. Beginning
in 1999, the Company changed its sales force from shareholder-
commissioned sales agents, who relied solely on selling lower
margin product, to a professional sales manager force dividing
up the country. As the Company has moved its image to the
higher-priced, higher-margin products like Griffin Creek
label plus its own vineyard designate series, the Company
felt it also needed to change its sales force. Along with
these additions, the Company hired a retail manager to boost
sales in the retail department.

The Company also incurred some additional expenses in 1999 that
did not occur in 1998. Bad debt allowance increased by $24,000
as the Accounts Receivable balance has increased over the past
few years. With the sale of one parcel of Tualatin Estate, the
Company wrote-off $22,584 which had been capitalized when the
Company purchased Tualatin Vineyards, Inc. in 1997.  The Company
also incurred $16,800 in legal and other expenses evaluating a
proposal of merger with a Napa Valley winery.  Other income for
the year ended December 31, 1999 was $85,963 as compared to
$10,013 for the year ended December 31, 1998. This increase was
from the sale of timber on its Tualatin Estate land in 1999.
Interest income decreased to $7,807 in fiscal year 1999 from
$22,967 in fiscal year 1998.  Interest expense decreased to
$483,723 in fiscal year 1999 from $493,901 in fiscal year 1998.

The provision for income taxes and the Company's effective tax
rate were $(22,880) and (20)% in fiscal year 1999 with
$(27,581) or (28)% of pre-tax income recorded for fiscal
year 1998.

As a result of the above factors, net income/(loss) decreased
to $(92,232) in fiscal 1999 from $(71,980) for the fiscal year
of 1998.  Earnings per share were $(.02), $(.02), and $.02, in
fiscal years 1999, 1998, and 1997, respectively.


Liquidity and Capital Resources

Willamette Valley Vineyards was originally established as a
sole proprietorship by Oregon winegrower Jim Bernau in 1983.
The Company was organized on May 2, 1988, and sold its first
wine in late April 1990.  Prior to April 1990, the Company's
working capital and Vineyard development and Winery
construction costs were principally funded by cash contributed
by James Bernau and Donald Voorhies, the Company's co-founders,
and by $1,301,354 in net proceeds received from the Company's
first public stock offering, which began in September 1988 and
was completed in June 1989 with the sale of 882,352 shares at a
price of $1.70 per share.

Since April 1990, the Company has operated on revenues from the
sale of its wine and related products and the net proceeds from
three additional stock offerings.  The Company's second public
stock offering began in July 1990 and was completed in July 1991
with the sale of 731,234 shares at prices of $2.65 and $2.72 per
share exclusively to Oregon residents, resulting in net proceeds
to the Company of $1,647,233.

In 1992, the Company conducted two stock offerings.  The Company
commenced an offering on July 18, 1992 that was completed on
September 30, 1992, with the sale of 428,216 shares of Common
Stock at a price of $3.42 per share and net proceeds to the
Company of $1,290,364.  On October 2, 1992, as a result of the
over-subscription of the first offering in 1992, the Company
commenced another offering of Common stock which was completed
on October 31, 1992 with the sale of 258,309 shares at a price
of $3.42 per share, resulting in net proceeds to the Company of
$775,726.

Cash and cash equivalents increased to $252,876 at December 31,
2000 from $219,041 at December 31, 1999.

Inventories increased 13% as of December 31, 2000, to $6,921,014
from the December 31, 1999 level of $6,142,697. As the Company
ramps up to improve the quality of its wine, the Company has
seen a significant increase in its higher cost wines as shown
below:
                                         In Cases units
                                      12/31/99    12/31/00
Willamette Valley Vineyards
Vineyard Designate Pinot Noir           5,929       8,178
Signature Pinot Noir                    1,995       2,731

Griffin Creek Label
Merlot                                    335       1,852
Syrah                                     201         542
Pinot Gris                                708       1,991

Tualatin  Estate Label                  8,700       9,155

Total                                  17,868      24,449

Property, plant, and equipment, net, decreased 6% as of
December 31, 2000, to $5,989,169 from $6,402,023 as of
December 31, 1999.

Long-term debt decreased to $3,627,602 as of December 31, 2000,
from $3,796,509 as of December 31, 1999.

The Company has a line of credit from Farm Credit Services
with a limit of $2,750,000.  As of December 31, 2000 the
outstanding balance of the line was $2,616,549 as compared to
$1,685,584 in 1999.  These funds were used to meet operational
expenditures primarily to fund the increase in the inventory.
The Company received a new line of credit of $2,750,000 in May
of 2000 up $250,000 from the old line of credit. Farm Credit
Services established credit line targets based upon the
Company's sale/lease back plan for a Tualatin Estate parcel
and would increase the interest rate on the credit line if
those targets were not met in September and December of 2000.
The Company did not meet its September target or its December
target and Farm Credit Services increased their lending rate
 .5% above their base rate for 2000.  The Company was not in
compliance with 3 of 5 debt covenants, but obtained a waiver
letter from Farm Credit Services at December 31, 2000.

The line of credit expires on May 1, 2001.  In light of the
Company's current projected earnings and cash flow, cash
generated from operations will not be sufficient to pay back
the entire bank debt of $2,700,000, on a current basis.
Management plans to continue to market some pieces of real
estate, the sale of which would generate significant cash to
repay the debt.  Additionally, management plans to obtain
financing from another financial institution. If the
Company is unable to sell real estate and/or refinance the
debt with another financial institution, the Company may be
unable to continue its normal operations, except to the
extent permitted by Northwest Farm Credit Services.

ITEM 7.     FINANCIAL STATEMENTS

The financial statements required by this item are presented
at page F-1.


ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.


ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS

Directors, nominees for election as a director, and each such
person's age at March 31, 2001 and position with the Company.

Name                         Position(s) with the Company    Age
James W. Bernau ***              Chairperson of the Board,
                                 President and Director      47
James L. Ellis * ***             Secretary and Director      56
Betty M. O'Brien*                Director                    57
Delna L. Jones**  ****           Director                    60
Stan G. Turel * **  ***    ****  Director                    53
_______________________________
*Member of the Compensation Committee
**Member of the Audit Committee
***Member of the Executive Committee
****Member of the Affiliated Transaction Committee

All directors hold office until the next annual meeting of
Shareholders or until their successors have been elected and
qualified.  Executive officers are appointed by the Board of
Directors and serve at the pleasure of the Board of Directors.
Set forth below is additional information as to each director
and executive officer of the Company.

James W. Bernau.  Mr. Bernau has been President and Chairperson
of the Board of Directors of the Company since its inception in
May 1988.  Willamette Valley Vineyards was originally established
as a sole proprietorship by Oregon winegrower Jim Bernau in 1983,
and he co-founded the Company in 1988 with Salem grape grower,
Donald Voorhies.  From 1981 to September 1989, Mr. Bernau was
Director of the Oregon Chapter of the National Federation of
Independent Businesses ("NFIB"), an association of 15,000
independent businesses in Oregon.

James L. Ellis.  Mr. Ellis has served as a Director since July
1991 and Secretary since June 1997.  Mr. Ellis has served as the
Company's Director of Human Resources from January 1993.  From
1990 to 1992, Mr. Ellis was a partner in Kenneth L. Fisher, Ph.D.
& Associates, a management-consulting firm.  From 1980 to 1990,
Mr. Ellis was Vice President and General Manager of R.A. Kevane
& Associates, a Pacific Northwest personnel-consulting firm.
From 1962 to 1979, Mr. Ellis was a member of and administrator
for the Christian Brothers of California, owner of Mont La Salle
Vineyards and producer of Christian Brothers wines and brandy.

Betty M. O'Brien.  Ms. O'Brien has served as a Director since
July 1991.  Ms. O'Brien is a writer and public relations
consultant.  Ms. O'Brien was employed by Willamette University
as its Director of News and Publications from 1988 to 2000.
Ms. O'Brien is a partner in Elton Vineyards, a commercial
vineyard located in Eola Hills in Yamhill County, Oregon.
She is a member of the Oregon Winegrowers Association, having
previously served as its President and Treasurer and as a
director.  Ms. O'Brien also serves on several community boards.

Delna L. Jones.  Ms. Jones has served as a Director since
November 1994.  Ms. Jones is semi-retired.  Ms. Jones was
elected in 1998 and served as a County Commissioner for
Washington County, Oregon from 1998 to 2000.  Ms. Jones has
served as project director for the CAPITAL Center, an
education and business consortium from 1990 to 1998.
From 1985 to 1990, Ms. Jones served as Director of
Economic Development with US West Communications.  Beginning
in 1982, she was elected six times to the Oregon House as
the State Representative for District 6.  During her tenure,
she served as the Assistant Majority Leader; she also
chaired the Revenue and School Finance committee, and served
on the Legislative Rules and Reorganization committee and
the Business and Consumer Affairs committee.  In addition,
Ms. Jones presently serves on many community and business
boards and advisory panels.

Stan G. Turel.  Mr. Turel has served as a Director since
November of 1994.  Mr. Turel is part owner and the CEO of
Columbia Turel, Inc., (formerly Columbia Bookkeeping, Inc.)
a position he has held since 1974.  Columbia Turel, Inc. has
sixteen offices in Oregon and Washington, servicing 4,000
small business and 26,000 tax clients annually.  Mr. Turel
is a licensed tax consultant, a member of the National
Association of Public Accountants, a private pilot, and a
former delegate to the White House Conference on Small
Business.  In addition, Mr. Turel serves his community on
a number of advisory boards and panels.


Board of Directors Committees.  The Board of Directors acts
as a nominating committee for selecting nominees for election
as directors.  The Board of Directors has appointed a standing
Audit Committee that, during the year ended December 31, 2000,
conducted one meeting.  The elected members of the Audit
Committee are Delna L. Jones and Stan G. Turel.  The Audit
Committee reviews the scope of the independent annual audit,
the independent accountants' letter to the Board of Directors
concerning the effectiveness of the Company's internal
financial and accounting controls and the Board of Directors'
response to that letter, if deemed necessary.  The Board of
Directors also has appointed a Compensation Committee which
reviews executive compensation and makes recommendations to
the full Board regarding changes in compensation, and also
administers the Company's 1992 Stock Incentive Plan.  During
the fiscal year ended December 31, 2000, the Compensation
Committee held four meetings.  The members of the Compensation
Committee currently are Betty M. O'Brien, Chair, Stan Turel,
and Jim Ellis.  In 1994, the Board of Directors created an
Affiliated Transactions Committee that reviewed transactions
deemed to involve a conflict of interest between the Company
and its former affiliates, current members of the Affiliated
Transaction Committee are Delna Jones and Stan Turel.  The
Committee held no meetings in 2000.  In 1997 the Board
appointed an Executive Committee, members are: James Bernau,
James Ellis, and Stan Turel.  The Executive Committee met four
times during 2000.


ITEM 10.  EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following table provides certain summary information
concerning compensation paid or accrued by the Company, to
or on behalf of the Company's Chief Executive Officer, James
W. Bernau (the "named executive officer") for the years
ending December 31, 1998, 1999, and 2000.

Name and Principal Position      Year      Annual Compensation
Salary ($) 	  Bonus

James W. Bernau
President and Chairperson of      1998      84,865      10,000
the Board of Directors            1999      91,512         -0-
                                  2000      93,000	   -0-

Bernau Employment Agreement

The Company and Mr. Bernau are parties to an employment
agreement dated August 3, 1988 and amended in February 1997
and again amended in January of 1998.  Under the amended
agreement, Mr. Bernau is paid an annual salary of $90,000
with annual increases tied to increases in the consumer price
index.  Pursuant to the terms of the employment agreement, the
Company must use its best efforts to provide Mr. Bernau with
housing on the Company's property.  Mr. Bernau and his family
live in the house free of rent and must continue to reside
there for the duration of his employment in order to provide
additional security and lock-up services for late evening events
at the Winery and Vineyard.  The employment agreement provides
that Mr. Bernau's employment may be terminated only for cause,
which is defined as non-performance of his duties or conviction
of a crime.


Stock Options

In order to reward performance and retain high-quality employees,
the Company often grants stock options to its employees.  The
Company does not ordinarily directly issue shares of stock to
its employees.  Options are typically issued at a per share
exercise price equal to the closing price as reported by NASDAQ
at the time the option is granted.  The options vest to the
employee over time.  Three months following termination of the
employee's employment with the Company, any and all unexercised
options terminate.

Option Exercises and Holdings
The following table provides information, with respect to the
named executive officer, concerning exercised options during
the last fiscal year and unexercised options held as of
December 31, 2000.

			     Options exercised in the last fiscal year
Name					 Number		Value
					Of shares      Realized(1)
James W. Bernau		     	          -0-		 -0-

			    Number of Securities Underlying
			     Unexercised Options at FY-End


James W. Bernau	  	 75,000(1.65)
                          1,500(1.81)
                          4,000(1.5625)
                          Exercisable	      Unexercisable

				     Value of Unexercised
			     In-the-Money Options at FY-End(2)

James W. Bernau		     0
                             0
                             0
                          Exercisable       Unexercisable



(1) The value realized is based on the difference between the
market price at the time of exercise of the options and the
applicable exercise price.

(2) Options are "in the money" at the fiscal year-end if the
fair market value of the underlying securities on such date
exceeds the exercise price of the option.  The amounts set
forth represent the difference between the fair market value
of the securities underlying the options on December 31, 2000
($1.4688 per share based on the NASDAQ closing price for the
Company's Common Stock on the NASDAQ Small Cap Market on that
date), and the exercise price of the option, multiplied by the
applicable number of options.


Director Compensation
The members of the Company's Board of Directors do not receive
cash compensation for their service on the Board, but are
reimbursed for out-of-pocket and travel expenses incurred in
attending Board meetings.  Under the Company's Stock Incentive
Plan adopted by the shareholders in 1992 and further amended by
the shareholders in 1996, beginning in 1997 an option to
purchase 1,500 shares of Common Stock is granted to each
Director for service on the Board during the year.  This
option was increased to 4,000 per year when the 50 share grant
per Director's meeting was discontinued for the year 2000 and
beyond.


Section 16(a) Beneficial Ownership Reporting Compliance

None


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information with respect
to beneficial ownership of the Company's Common Stock as of
December 31, 2000, by  (i) each person who beneficially owns
more than 5% of the Company's Common Stock  (ii) each Director
of the Company  (iii) each of the Company's named executive
officers, and  (iv) all directors and executive officers as a
group.

                              Number of            Percent of
                    Shares Beneficially Owned  Shares Outstanding Stock

James W. Bernau     President/CEO, Chair of the Board
2545 Cloverdale Road          1,038,350.5 (1)      24.4%
Turner, OR  97392

James L. Ellis      Secretary, Director
7850 S.E. King Road       	 36,523  (2)         **
Milwaukie, OR  97222

Delna L. Jones      Director
PO Box 5969               	  8,700  (3)         **
Aloha, OR  97006

Betty M. O'Brien    Director
22500 Ingram Lane NW   	     	 13,950  (4)         **
Salem, OR  97304

Stan G. Turel       Director
13909 S.E. Stark Street         131,885  (5)         3.1%
Portland, OR  97233

Donald Voorhies Estate
78356 Golden Reed Dr            212,518              5.0%
Palm Desert, CA   92211

All Directors, executive      1,441,927             33.9%
officers and persons owning
5% or more as a group (6 persons)
______________________________
**         Less than one percent.

(1) Includes 15,000 shares issuable upon the exercise of an
outstanding warrant and 80,500 shares issuable upon exercise
of options.

(2) Includes 29,928.5 shares issuable upon the exercise of options.

(3) Includes 6,100 shares issuable upon the exercise of options.

(4) Includes 8,500 shares issuable upon the exercise of options.

(5) Includes 8,500 shares issuable upon the exercise of options.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


During 2000 and 1999, the Company purchased grapes from Elton
Vineyards for $74,585 and $62,068 respectively.  Betty M.
O'Brien, a Director of the Company, is a principal owner of
Elton Vineyards.

On June 1, 1992, the Company granted Mr. Bernau a warrant
to purchase 15,000 shares of the Company's Common Stock as
consideration for his personal guarantee of the Real Estate
Loan and the Line of Credit from Farm Credit Services pursuant
to which the Company borrowed $1.2 million.  The warrant is
exercisable anytime through June 1, 2012, at an exercise price
of $3.42 per share.

On December 3, 1992, James W. Bernau borrowed $100,000 from the
Company.  The loan is secured by Mr. Bernau's stock in the
Company, and is payable, together with interest at a rate of
7.35% per annum, on March 14, 2009.  At December 31, 2000, the
outstanding balance of the loan was $56,869 including accrued
interest.

The Company believes that the transactions set forth above were
made on terms no less favorable to the Company than could have
been obtained from unaffiliated third parties.  All future
transactions between the Company and its officers, directors,
and principal shareholders will be approved by a disinterested
majority of the members of the Affiliated Transactions Committee
of the Company's Board of Directors, and will be on terms no
less favorable to the Company than could be obtained from
unaffiliated third parties.



ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

(3) Articles of Incorporation and Bylaws:

(a) Articles of Incorporation of Willamette Valley Vineyards, Inc.
(incorporated by reference from the Company's Regulation A
Offering Statement on Form 1-A [File No. 24S-2996])

(b) Bylaws of Willamette Valley Vineyards, Inc.(incorporated by
reference from the Company's Regulation A Offering Statement on
Form 1-A [File No. 24S-2996])


(10) Material Contracts

(a) Employment Agreement between Willamette Valley Vineyards,
Inc. and James W. Bernau dated August 3, 1988 (incorporated by
reference from the Company's Regulation A Offering Statement on
Form 1-A [File No. 24S-2996])

(b) Indemnity Agreement between Willamette Valley Vineyards,
Inc. and James W. Bernau dated May 2, 1988 (incorporated by
reference from the Company's Regulation A Offering Statement
on Form 1-A [File No. 24S-2996])

(c) Indemnity Agreement between Willamette Valley Vineyards,
Inc. and Donald E. Voorhies dated May 2, 1988 (incorporated by
reference from the Company's Regulation A Offering Statement on
Form 1-A [File No. 24S-2996])

(d) Shareholders Agreement among Willamette Valley Vineyards,
Inc. and its founders, James Bernau and Donald Voorhies, dated
May 2, 1988 (incorporated by reference from the Company's
Regulation A Offering Statement on Form 1-A [File No. 24S-2996])

(h) Revolving Note and Loan Agreement dated May 28, 1992 by and
between Northwest Farm Credit Services, Willamette Valley
Vineyards, Inc. and James W. and Cathy Bernau (incorporated by
reference from the Company's Regulation A
Offering Statement on Form 1-A [File No. 24S-2996])

(i) Founders' Escrow Agreement among Willamette Valley Vineyards,
Inc., James W. Bernau, Donald Voorhies and First Interstate Bank
of Oregon, N.A. dated September 20, 1988 (incorporated by
reference from the Company's Regulation A Offering Statement on
Form 1-A [File No. 24S-2996])

(j) Amendment to Founders' Escrow Agreement dated September 20,
1988 (incorporated by reference from the Company's Regulation A
Offering Statement on Form 1-A [File No. 24S-2996])

(k) Stock Escrow Agreement among Willamette Valley Vineyards, Inc.,
Betty M. O'Brien and Charter Investment Group, Inc. dated July 7,
1992 (incorporated by reference from the Company's Regulation A
Offering Statement on Form 1-A [File No. 24S-2996])

(l) Stock Escrow Agreement among Willamette Valley Vineyards, Inc.,
Daniel S. Smith and Piper Jaffray & Hopwood, Inc. dated July 7,
1992 (incorporated by reference from the Company's Regulation A
Offering Statement on Form 1-A [File No. 24S-2996])

(m) Acquisition of Tualatin Vineyards, Inc. dated April 15, 1997.
 (File No.   )


(b) Reports on Form 8-K

Not applicable.


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

WILLAMETTE VALLEY VINEYARDS, INC.
(Registrant)


Date: March 31, 2001.       By:__________________________________
James W. Bernau,
Chairperson of the Board,
President

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed below by the
following persons on behalf of the registrant and in the capacities
and on the dates indicated.

Signature                       Title                  Date


_____________________  Chairperson of the Board,   March 31, 2001
James W. Bernau        President
    (Principal Executive Officer)

_____________________  Controller                  March 31, 2001
Sean M. Cary           (Principal Accounting Officer)


_____________________  Director and Vice-President March 31, 2001
James L. Ellis         and Secretary

_____________________  Director                    March 31, 2001
Betty M. O'Brien

_____________________  Director                    March 31, 2001
Stan G. Turel

_____________________  Director                    March 31, 2001
Delna Jones









Willamette Valley
Vineyards, Inc.
Report and Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998

Willamette Valley Vineyards, Inc.
Index to Financial Statements


Report of Independent Accountants       F-1

Balance Sheets                          F-2

Statements of Operations                F-3

Statements of Shareholders' Equity      F-4

Statements of Cash Flows                F-5

Notes to Financial Statements           F-6



Report of Independent Accountants


To the Board of Directors and Shareholders of
Willamette Valley Vineyards, Inc.


In our opinion, the accompanying balance sheets and the related
statements of operations, of shareholders' equity and of cash
flows present fairly, in all material respects, the financial
position of Willamette Valley Vineyards, Inc. at December 31,
2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally
accepted in the United States of America.  These financial
statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial
statements based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material mis-
statement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

The accompanying 2000 financial statements have been prepared
assuming that the Company will continue as a going concern.  As
more fully discussed in Note 13 to the financial statements, the
Company has not renewed its operating line of credit with the
bank, which expires May 1, 2001.  Management's plans in regard
to these matters are also described in Note 13.  These matters
raise substantial doubt about the Company's ability to continue
as a going concern.  The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.


PricewaterhouseCoopers LLP

Portland, Oregon
March 8, 2001


Willamette Valley Vineyards, Inc.
Balance Sheet
December 31, 2000 and 1999

          ASSETS                        2000           1999
Current Assets:
 Cash and cash equivalents          $  252,876     $  219,041
 Accounts receivable, net (Note 2)     564,020        429,495
 Inventories (Note 3)                6,921,014      6,142,697
 Prepaid expenses and
   Other current assets                 45,954         79,102
 Deferred income taxes (Note 10)       118,951         89,598
                                     ---------      ---------
    Total current assets             7,902,815      6,959,933

Vineyard development costs, net
                        (Note 1)     1,608,365      1,396,317
Property and equipment, net
                  (Note 1 and 4)     5,989,169      6,402,023
Investments (Note 5)                     4,974          4,974
Note receivable (Note 11)               56,869         52,975
Debt issuance costs                     50,061         56,953
Other assets                           185,619        141,655
                                    ----------      ---------
                                   $15,797,872    $15,014,830
                                   ===========    ===========
         LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Line of credit (Note 6)           $ 2,616,549    $ 1,685,584
 Current portion of long-term debt and
   capital lease obligations (Note 7)  220,921        213,502
 Accounts payable                      847,883        960,479
 Accrued commissions and payroll costs 143,662        126,375
 Income taxes payable                        -         42,429
 Grape payables                        914,366        827,843
                                       -------        -------
    Total current liabilities        4,743,381      3,856,212
Long-term debt and capital lease
   Obligations (Note 7)              3,406,681      3,583,007
Deferred rent liability                 31,634              -
Deferred gain (Note 12)                474,695        508,054
Deferred income taxes (Note 10)        146,819         89,598
                                     ---------       --------
                                     8,803,210      8,036,871
                                     =========      =========
Commitments and contingencies (Notes 12 and 13)

Shareholders' equity (Notes 8 and 9):
 Common stock, no par value -
  10,000,000 Shares authorized,
  4,254,481 and 4,253,431 shares
  issued and outstanding at
  December 31, 2000 and 1999         6,817,613     6,815,972
 Retained earnings                     177,049       161,987
                                     ---------     ---------
    Total shareholders' equity       6,994,662     6,977,959
                                     ---------     ---------
                                   $15,797,872   $15,014,830
                                   ===========   ===========


Willamette Valley Vineyards, Inc.
Statement of Operations
For the Years Ended December 31, 2000, 1999 and 1998


                            2000         1999         1998
Net revenues             $6,716,857   $5,914,208   $6,132,355

Cost of goods sold        3,532,401    2,737,773    3,076,507
                          ---------    ---------    ---------
    Gross margin          3,184,456    3,176,435    3,055,848

Selling, general and
 Administrative expenses  2,775,782    2,901,594    2,694,488
                          ---------    ---------    ---------
Income from operations      408,674      274,841      361,360
                          ---------    ---------    ---------
Other income (expenses):
 Interest income              3,894        7,807       22,967
 Interest expense          (547,216)    (483,723)    (493,901)
 Other income               169,305       85,963       10,013
                           --------      --------    --------
                           (374,017)    (389,953)    (460,921)
                           --------      --------    ---------
  Income (loss) before
   income taxes              34,657     (115,112)     (99,561)
Income tax (benefit)
 Provision (Note 10)         19,595      (22,880)     (27,581)
                           ---------     -------      -------
Net income (loss)         $  15,062    $ (92,232)   $ (71,980)
Basic net income (loss)   ==========    ========     ========
 Per common share          $      -     $   (.02)    $   (.02)
                          ==========    ========     ========
Diluted net income (loss)
 Per common share          $      -     $   (.02)    $   (.02)
                          ==========    ========     ========


The accompanying notes are an integral part of these financial
statements.




Willamette Valley Vineyards, Inc.
Statement of Shareholders' Equity
For the Years Ended December 31, 2000, 1999 and 1998

                        Common stock      Retained
                     Shares     Dollars   earnings      Total
Balances at
December 31, 1997  4,231,431   6,779,067   326,199   7,105,266

Stock issuance for
 compensation          1,250       2,189         -       2,189

Net loss                   -           -   (71,980)    (71,980)
                   ---------   ---------   --------   --------
Balances at
December 31, 1998  4,232,681   6,781,256   254,219   7,035,475

Stock issuance for
 Compensation         20,750     34,716          -      34,716

Net loss                  -           -    (92,232)    (92,232)
                    --------   --------    --------     ------
Balances at
December 31, 1999  4,253,431 $6,815,972   $161,987  $6,977,959

Stock issuance for
 Compensation          1,050      1,641          -       1,641

Net loss                  -           -     15,062      15,062
                    --------   --------   --------     -------
Balances at
December 31, 2000  4,254,481 $6,817,613   $177,049  $6,994,662
                   ========= ==========   ========  ==========



Willamette Valley Vineyards, Inc.
Statement of Cash Flows
Years Ended December 31, 2000, 1999 and 1998

                                2000        1999         1998
Cash flow from operating
Activities:
 Net income (loss)          $  15,062   $ (92,232)  $ (71,980)
  Reconciliation of net
  income (loss) to net cash
  (used for) provided by
  operating activities:
 Depreciation and
   amortization               719,046     729,770     657,536
 Deferred income taxes         27,868     (65,880)    (27,581)
 Bad debt expense                   -      27,730      83,148
 Stock issued for compensation  1,641      13,622           -
Changes in assets and
Liabilities:
 Accounts receivable         (134,525)    (85,688)    365,841
 Inventories                 (778,317) (1,519,795)   (428,593)
 Prepaid expenses and other
 current assets                33,148       7,884      (8,693)
 Notes receivable              (3,894)     (6,038)    101,511
 Other assets                 (43,964)          -     (67,813)
 Accounts payable            (112,596)    645,294     (48,234)
 Accrued commissions and
 payroll costs                 17,287     (86,835)    (12,087)
 Income taxes receivable            -      24,436           -
 Income taxes payable         (42,429)     42,429           -
 Grape payables                86,523     246,549      80,056
 Deferred rent liability       31,634           -           -
 Deferred gain                (33,359)
                             --------     -------     -------
Net cash (used for)
 Operating activities        (216,875)   (118,754)    623,111
                             =========    =======     =======
Cash flows from investing
activities:
 Additions to property and
 equipment                   (214,855)   (484,249)   (458,805)
 Vineyard development
 expenditures                (267,233)   (283,483)   (445,507)
 Cash received upon sale of
   investments                      -           -     100,066
 Proceeds from sale of
   property and equipment           -   1,490,706           -
                            ----------  ---------    --------
  Net cash provided by (used for)
   Investing activities      (482,088)    722,974   (804,246)
                            ----------   --------   ---------
Cash flows from
financing activities:
 Debt issuance costs                -     (71,058)    (6,707)
 Net increase in line of
    credit balance            930,965      32,917    135,370
 Issuance of long-term debt     3,034     157,731    312,760
 Repayments of long-term debt(201,201)   (654,170)  (124,428)
                             ---------   ---------  ---------
  Net cash provided by (used for)
    financing activities      732,798    (534,580)   316,995
                             --------    ---------   -------
  Net increase in cash and cash
    equivalents                33,835      69,640    135,860

Cash and cash equivalents:
  Beginning of year           219,041     149,401     13,541
                              -------     -------    -------
 End of year                 $252,876    $219,041   $149,401
                             ========    ========   ========



1.  Summary of Operations, Basis of Presentation and
Significant Accounting Policies

Organization and operations
Willamette Valley Vineyards, Inc. (the Company) owns and
operates vineyards and a winery located in the state of Oregon,
and produces and distributes premium and super premium wines,
primarily Pinot Noir, Chardonnay, and Riesling.  The majority of
the Company's wine is sold to grocery stores and restaurants in
the state of Oregon through the Company's sales force.  During
fiscal years 2000 and 1999, revenues derived from one customer
of $979,755 and $639,466, respectively, represented 15% and 11%
of the Company's revenues.  The Company did not derive more than
10% of revenues from any one customer in 1998. Out-of-state and
foreign sales represented approximately 36%, 37%, and 35% of
revenues for 2000, 1999 and 1998.  The Company also sells its
wine from the tasting room at its winery.

Basis of presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles which
require management to make certain estimates and assumptions.
These estimates and assumptions affect the reported amounts of
assets and liabilities and the disclosure of contingent assets
and liabilities as of the date of the financial statements, and
the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.

Cash and cash equivalents
Cash and cash equivalents include short-term investments with an
original maturity of less than 90 days.

Revenue recognition
The Company recognizes revenue upon the delivery of its products
to its customers.  Sales are recorded as trade accounts receivable
and no collateral is required.

Inventories
After a portion of the vineyard becomes commercially productive,
the annual crop and production costs relating to such portion are
recognized as work-in-process inventories.  Such costs are
accumulated with related direct and indirect harvest, wine
processing and production costs, and are transferred to finished
goods inventories when the wine is produced, bottled, and ready
for sale.  The cost of finished goods is recognized as cost of
sales when the wine product is sold.  Inventories are stated at
the lower of first-in, first-out (FIFO) cost or market by variety.
In accordance with general practices in the wine industry, wine
inventories are included in current assets in the accompanying
balance sheet, although a portion of such inventories may be aged
for more than one year.

Vineyard development costs
Vineyard development costs consist primarily of the costs of the
vines and expenditures related to labor and materials to prepare
the land and construct vine trellises.  The costs are capitalized
until the vineyard becomes commercially productive, at which time
annual amortization is recognized using the straight-line method
over the estimated economic useful life of the vineyard, which is
estimated to be 30 years.  Accumulated amortization of vineyard
development costs aggregated $262,148 and $206,903 at December 31,
2000 and 1999, respectively.

Property and equipment
Property and equipment are stated at cost or the historical cost
basis of the contributing shareholders, as applicable, and are
depreciated on the straight-line basis over their estimated
useful lives as follows:

     Land improvements     15 years
     Winery building       30 years
     Equipment            5-7 years

Expenditures for repairs and maintenance are charged to operating
expense as incurred.  Expenditures for additions and betterments
are capitalized.  When assets are sold or otherwise disposed of,
the cost and related accumulated depreciation are removed from the
accounts, and any resulting gain or loss is included in operations.

Debt issuance costs
Debt issuance costs are amortized on a straight-line basis, which
approximates the effective interest method, over the life of the
debt.

Income taxes
The Company accounts for income taxes using the asset and
liability approach whereby deferred income taxes are calculated
for the expected future tax consequences of temporary differences
between the book basis and tax basis of the Company's assets and
liabilities.

Other income
Other income in the year ended December 31, 2000 includes
approximately $65,000 related to the settlement of legal
proceedings in favor of the Company.

Basic and diluted net income per share
Basic earnings per share are computed based on the weighted
average number of common shares outstanding each year.  Diluted
earnings per share is computed using the weighted average number
of shares of common stock and dilutive common equivalent shares
outstanding during the year.  Common equivalent shares from stock
options and other common stock equivalents are excluded from the
computation when their effect is antidilutive. Options to
purchase 510,670 shares of common stock were outstanding at
December 31, 2000, but were not included in the computation of
diluted earnings per share because the exercise prices were
greater than the average market price of the common shares at
December 31, 2000.  Options to purchase 474,000 and 402,000
shares of common stock were outstanding at December 31, 1999
and 1998, respectively, but were not included in the
computation of diluted earnings per share because the effect
would have been antidilutive due to the Company's losses in
those years.  In addition, the warrant outstanding since 1992
(Note 8) was not included in the computation of diluted earnings
per share in 2000, 1999, or 1998 because the exercise price of
$3.42 was greater than the average market price of the common
shares during all three years.

                      2000
                    Weighted
                     average    Earnings
                     shares       per
          Income   outstanding   share


Basic    $ 15,062   4,254,481        -
Options         -           -
Warrants        -           -
         --------   ---------   ------
Diluted  $ 15,062   4,254,481   $    -
         ========   =========   ======

                      1999
                    Weighted
                     average    Earnings
                     shares       per
          Income   outstanding   share


Basic    $(92,232)   4,253,431   (.02)
Options         -          -
Warrants        -          -
         ---------   ---------  ------
Diluted  $(92,232)   4,253,431  $(.02)
         =========   =========  ======

                      1998
                    Weighted
                     average    Earnings
                     shares       per
          Income   outstanding   share


Basic    $(71,980)   4,232,578   (.02)
Options         -          -
Warrants        -          -
         ---------   ---------  ------
Diluted  $(71,980)   4,232,578  $(.02)
         =========   =========  ======

Statement of cash flows
Supplemental disclosure of cash flow information:

                              2000      1999      1998
Interest paid               $547,000  $492,000  $556,000
Income tax refund received     8,344         -         -
Supplemental schedule of
 noncash investing and
 financing activities:
  Capital lease               29,260         -    59,673
  Issuance of common stock
   awards (Note 8)             1,641    21,094     2,188


Fair market value of financial instruments
The fair market values of the Company's recorded financial
instruments approximate their respective recorded balances, as
the recorded assets and liabilities are stated at amounts
expected to be realized or paid, or carry interest rates
commensurate with current rates for instruments with a similar
duration and degree of risk.

Deferred rent liability
The Company leases land under a sale-leaseback agreement
(Note 12).  The long-term operating lease has minimum lease
payments that escalate every year.  	For accounting purposes,
rent expense is recognized on the straight-line basis by
dividing the total minimum rents due during the lease by the
number of months in the lease.  In the early years of a lease
with escalation clauses, this treatment results in rental
expense recognition in excess of rents paid, and the creation
of a long-term deferred rent liability.  As the lease matures,
the deferred rent liability will decrease and the rental expense
recognized will be less than the rents actually paid.  For the
period ended December 31, 2000, rent cost recognized in excess of
amounts paid totaled $31,634, which has been capitalized into
vineyard development costs and inventory.

Reclassifications
Certain reclassifications have been made to the 1998 and 1999
financial statements to conform with financial statement
presentation for the year ended December 31, 2000.  These
reclassifications have no effect on previously reported results
of operations or shareholders' equity.


2.  Accounts Receivable

Oregon law prohibits the sale of wine in Oregon on credit;
therefore, the Company's accounts receivable balances are the
result of sales to out-of-state and foreign distributors.  At
December 31, 2000 and 1999, the Company's accounts receivable
balance is net of an allowance for doubtful accounts of $41,660
and $54,000, respectively.


3.  Inventories

Inventories consist of:
                                           2000         1999

Winemaking and Packaging Materials     $  273,189   $  276,571
Work-in-process(costs relating to
 unprocessed and/or unbottled wine
 products)                              2,415,006    2,463,709
Finished goods (bottled wine and
 related products)                      4,232,819    3,402,417
                                       ----------   ----------
                                       $6,921,014   $6,142,967
                                       ==========   ==========

4.  Property and Equipment
                                           2000         1999

Land and improvements                  $  965,309   $  938,990
Winery building and hospitality center  4,549,081    4,527,573
Equipment                               4,285,585    4,089,297
                                       ----------   ----------
                                        9,799,975    9,555,860

Less accumulated depreciation          (3,810,806)  (3,153,837)
                                       -----------  -----------
                                       $5,989,169   $6,402,023
                                       ===========  ===========

During 1998 and 2000, the Company entered into capital lease
arrangements for certain winery equipment and vehicles.
Future minimum capital lease payments as of December 31, 2000
are:

2001                               $   22,684
2002                                   22,858
2003                                   16,558
2004                                   12,899
2005                                    6,107
                                   -----------
Total minimum lease payments           81,106

Less interest portion                 (13,397)
                                   -----------
Capital Lease Obligation (note 7)      67,709

Less portion due within one
 year (Note 7)                        (16,701)
                                   -----------
                                   $   51,008
                                   ===========

The cost of the Company's leased equipment and related
accumulated depreciation aggregated $88,933 and $19,320,
respectively, at December 31, 2000.


5.  Investments

Investments consist of:
                                            2000         1999

Farm Credit securities                 $    3,000   $    3,000
Other                                       1,974        1,974
                                       ----------   ----------
                                            4,974        4,974
                                       ==========   ==========

Farm Credit securities investments are required as a condition
of the Northwest Farm Credit Service loan and line of credit
facility (Note 6).  These investments are classified as held-to-
maturity investments and are recorded at historical cost.


6.  Line of Credit Facility

The Company has a $2,750,000 credit facility with Northwest Farm
Credit Services.  Borrowings under this facility bear interest at
11% and are collateralized by inventories and accounts receivable.
At December 31, 2000 and 1999, $2,616,549 and $1,685,584 were
outstanding under this facility, respectively.  This line of
credit facility expires on May 1, 2001.  In addition, Northwest
Farm Credit Services has informed the Company that they should
look for another lender (Note 13).


7.  Long-Term Debt

Long-term debt consists of:

                                         2000         1999

Northwest Farm Credit Service Loan     $3,422,675   $3,598,209
Real property loan, 8.5% interest,
 monthly payments of $1055 through 2019   117,938      121,249
Capital lease obligations                  67,709       48,150
Vehicle financing                          19,280       28,901
                                       ----------   ----------
                                        3,627,602    3,796,509

Less current portion                     (220,921)    (213,502)
                                       -----------  -----------
                                       $3,406,681   $3,583,007
                                       ===========  ===========


The Company has an agreement with Northwest Farm Credit Services
containing two separate notes bearing interest at a rate of 7.85%,
which are collateralized by real estate and equipment.  These
notes require monthly payments ranging from $7,687 to $30,102
until the notes are fully repaid in 2014.  The loan agreement
contains covenants which require the Company to maintain certain
financial ratios and balances.  At December 31, 2000, the Company
was not in compliance with these covenants but has obtained a
waiver letter thereon (Note 13).

Future minimum principal payments of long-term debt mature as
follows:

Year Ending
December 31,
    2001                        $   220,921
    2002                            233,693
    2003                            246,470
    2004                            257,878
    2005                            271,887
 Thereafter                       2,396,753
                                -----------
                                $ 3,627,602
                                ===========


8.  Shareholders' Equity

The Company is authorized to issue 10,000,000 shares of its
common stock.  Each share of common stock is entitled to one
vote.  At its discretion, the Board of Directors may declare
dividends on shares of common stock, although the Board does
not anticipate paying dividends in the foreseeable future.

On June 1, 1992, the Company granted its president a warrant
to purchase 15,000 shares of common stock as consideration for
his personal guarantee of the real estate loans and the line
of credit with Northwest Farm Credit Services (Notes 6 and 7).
The warrant is exercisable through June 1, 2012 at an exercise
price of $3.42 per share.  As of December 31, 2000 and 1999,
no warrants had been exercised.

In each of the years ended December 31, 2000 and 1999, the
Company granted 1,050 shares and 12,500 shares of stock valued
at $1,641 and $21,094, respectively, as compensation.  The cost
of these grants were capitalized as inventory.  The effects of
these non-cash transactions have been excluded from the cash
flow statements in both periods.


9.  Stock Incentive Plan

In 1992, the Board of Directors adopted a stock incentive plan
and reserved 175,000 shares of common stock for issuance to
employees, consultants, and directors of the Company under the
plan.  In 1996 and 1998, the Board of Directors reserved an
additional 150,000 and 275,000 shares, respectively.  In 1998,
the Board repriced options for 145,390 unvested shares with a
weighted average exercise price of $2.91 to the current market
price of $1.50 on the date of approval.  Administration of the
plan, including determination of the number, term, and type of
options to be granted, lies with the Board of Directors or a
duly authorized committee of the Board of Directors.

At December 31, 2000, 1999 and 1998, the following transactions
related to stock options occurred:

                                          2000       .
                                                Weighted
                                                average.
                                                exercise
                                      Shares     price
Outstanding at beginning of year     474,000    $1.75
  Granted                            135,900     1.62
  Exercised                                -        -
  Forfeited                          (99,230)    1.75
                                    --------    -----
Outstanding at end of year           510,670     1.72
                                    ========    =====
                                          1999        .
                                                Weighted
                                                average
                                                exercise
                                      Shares     price
Outstanding at beginning of year     402,000    $1.73
  Granted                            120,500     1.83
  Exercised                                -        -
  Forfeited                          (48,500)    1.75
                                     -------    ------
Outstanding at end of year           474,000     1.75
                                     =======    ======

                                          1998        .
                                                Weighted
                                                average
                                                exercise
                                      Shares     price
Outstanding at beginning of year     173,000    $2.94
  Granted                            229,000     1.71
  Exercised                                -        -
  Forfeited                                -        -
                                     -------    -----
Outstanding at end of year           402,000     1.73
                                     =======    =====


Weighted average options outstanding and exercisable at
December 31, 2000 are as follows:

                          Options outstanding
                                 Weighted
               Number            average     Weighted
             Outstanding at     remaining    average
Exercise     December 31,       contractual  exercise
 Price           2000              life        price
$    1.50     115,710              6.04       $1.50
     1.56      74,500              9.41        1.56
     1.65      75,000              7.00        1.65
     1.69      57,000              9.50        1.69
     1.75     105,000              8.25        1.75
     1.81      35,500              8.71        1.81
     1.88      25,000              8.71        1.88
     2.75       7,200              6.50        2.75
     3.00       9,260              6.08        3.00
     3.62       4,000              5.56        3.62
     4.50       2,000              4.08        4.50
------------  -------              -----      ------
$1.50 -$4.50  510,670              7.67       $1.72
============  =======              =====      ======

                          Options exercisable
               Number           Weighted
             Exercisable at     average
Exercise     December 31,       exercise
 Price           2000            price
$    1.50     115,710            $1.50
     1.56      29,500             1.56
     1.65      75,000             1.65
     1.69      12,000             1.69
     1.75      84,400             1.75
     1.81      20,500             1.81
     1.88       5,000             1.88
     2.75       4,600             2.75
     3.00       7,831             3.00
     3.62       4,000             3.62
     4.50       2,000             4.50
------------  -------            -----
$1.50 -$4.50  360,541            $1.71
============  =======            ======


The Company adopted Statement of Financial Accounting Standards
No. 123 (SFAS 123) in 1996 and has elected to account for its
stock-based compensation under Accounting Principles Board
Opinion 25.  As required by SFAS 123, the Company has computed
for pro forma disclosure purposes the value of options granted
during each of the three years ended December 31, 2000 using
the Black-Scholes option-pricing model with the following
weighted-average assumptions used for the grants in 2000,
1999 and 1998:

                            2000        1999        1998
Risk-free interest rate     6.12%       5.56%       5.54%
Expected dividend yield        -          -           -
Expected lives              8 years     8 years     8 years
Expected volatility         70%         70%         70%



Options were assumed to be exercised upon vesting for purposes
of this valuation.  Adjustments are made for options forfeited
prior to vesting.  For the years ended December 31, 2000, 1999
and 1998, the total value of the options granted was computed
to be $173,689, $173,815 and $192,540, respectively, which
would be amortized on a straight-line basis over the vesting
period of the options.

For the years ended December 31, 2000, 1999 and 1998, the
weighted average fair value of options granted was computed
to be $1.30, $1.44 and $0.85, respectively.

Had compensation cost for the Company's stock option plans been
determined based on the fair value at the grant date for awards
consistent with the provisions of SFAS 123, the Company's net
earnings would have been reduced to the pro forma amounts
indicated as follows:

                           2000         1999         1998
Net income (loss)-
 As reported           $  15,062      (92,232)   $ (71,980)
Per share:
  Basic                        -         (.02)        (.02)
  Diluted                      -         (.02)        (.02)
Net income (loss)-
 Pro forma              (112,570)    (181,201)    (175,860)
Per share:
  Basic                     (.03)        (.04)        (.04)
  Diluted                   (.03)        (.04)        (.04)


The effects of applying SFAS 123 for providing pro forma
disclosures for the three years ended December 31, 2000 are
not likely to be representative of the effects on reported net
income and earnings per share for future years, because options
vest over several years and additional awards generally are made
each year.




10.  Income Taxes

The provision (benefit) for income taxes consists of:

                                   2000       1999       1998
Current tax expense:
  Federal                       $  (8,273)  $ 43,000           -
  State                                 -          -           -
                                ----------  ---------  ---------
                                   (8,273)    43,000           -
                                ----------  ---------  ---------
Deferred tax expense (benefit)
  Federal                          34,628    (68,319)  $(24,291)
  State                             4,440     (8,761)    (3,290)
                                ----------  ---------  ---------
                                   39,068    (77,080)   (27,581)
                                ----------  ---------  ---------
(Decrease) increase in
 valuation allowance              (11,200)    11,200           -
                                ----------  ---------  ---------
   Total                        $  19,595    (22,880)  $(27,581)
                                ==========  =========  =========



The effective income tax rate differs from the federal statutory
rate as follows:

                                 Year ended December 31,
                                 2000     1999      1998
Federal statuatory rate          34.0%   (34.0)%   (34.0)%
State taxes, net of federal
  Benefit                         4.4     (4.4)     (4.4)
Permanent differences            29.0     13.2       9.3
(Decrease) increase in
 valuation allowance            (32.3)     9.7         -
Other, primarily prioryear taxes 21.3     (4.4)      1.4
                                ------   ------     -----
                                 56.4%   (19.9)%   (27.7)%
                                ======   ======    ======

Permanent differences consist primarily of nondeductible meals
and entertainment and life insurance premiums.


Deferred tax assets and (liabilities) consist of:

                                      December 31,
                                    2000      1999
Accounts receivable               $15,981    20,714
Inventory                          76,717    60,857
Other                              26,253    19,227
                                  -------   -------
  Net current deferred tax assets 118,951   100,798
                                  -------   -------
Depreciation                     (430,786) (440,071)
Net operating loss carryforwards   63,347   112,583
Deferred gain on sale-leaseback   182,093   194,890
Alternative minimum tax credit
  Carryforward                     38,527    43,000
                                  -------   -------
   Net noncurrent deffered tax
    Liability                    (146,819)  (89,598)
                                  -------- ---------
   Net deferred tax asset         (27,868)   11,200
Valuation allowance                     -   (11,200)
                                  -------- --------
   Total                         $(27,868)        -
                                  ======== ========


The Company's net operating loss carryforwards, which are
approximately $165,000, expire between 2015 and 2020.


11.  Related Parties

During 2000, 1999 and 1998, the Company purchased grapes from
certain shareholders at an aggregate price of $73,958, $61,499
and $105,332, respectively.  At December 31, 2000, 1999 and
1998, grape payables included $37,293, $26,586 and $52,667,
respectively, owed to these shareholders.

The Company has a loan to its president with a balance of
$56,869 at December 31, 2000.  The loan was due on December 3,
1993, bearing interest at 7.35%.  On March 14, 1994, the loan
was extended to March 14, 2009.  The loan is collateralized by
the common stock of the Company held by its president.  This
note, including the related interest receivable, is classified
as a long-term note receivable in the accompanying balance sheet.




12.  Commitments and Contingencies

Litigation
From time to time, in the normal course of business, the Company
is a party to legal proceedings.  Management believes that these
matters will not have a material adverse effect of the Company's
financial position or results of operations, but due to the
nature of the litigation, the ultimate outcome cannot presently
be determined.

Operating leases
The Company entered into a lease agreement for approximately 45
acres of vineyards and related equipment in 1997.  In December
1999, under a sale-leaseback agreement, the Company sold a
portion of the Tualatin Vineyards property with a net book
value of approximately $1,000,000 for approximately $1,500,000
cash and entered into a 20 year operating lease agreement.
The gain of approximately $500,000 is being amortized over the
20 year term of the lease.

As of December 31, 2000, future minimum lease payments are as
follows:

Year ending
 December 31,
     2001               $  190,544
     2002                  193,485
     2003                  196,499
     2004                  202,289
     2005                  205,289
    Thereafter           2,279,428
                        ----------
      Total             $3,267,534
                        ==========


The Company is also committed to lease payments for various
office equipment.  Total rental expense for all operating
leases excluding the vineyards, amounted to $14,364, $27,372
and $30,647 in 2000, 1999, and 1998, respectively.  In
addition, payments for the leased vineyards have been
included in inventory and vineyard developments costs and
aggregate approximately $196,308, $81,300, and $77,000,
respectively, for each of the years ended December 31, 2000,
1999, and 1998.

Susceptibility of vineyards to disease
The Tualatin Vineyard purchased during 1997 and the leased
vineyards are known to be infested with phylloxera, an aphid-
like insect which can destroy vines.  Although management has
begun planting with phylloxera-resistant rootstock, a portion
of the vines at the Tualatin vineyard are susceptible to
phylloxera.  The Company has not detected any phylloxera at its
Turner Vineyard.


13.  Going Concern

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern.  As
discussed in Note 6, the line of credit facility with Northwest
Farm Credit Services expires May 1, 2001.  In addition,
Northwest Farm Credit Services has informed the Company that
they should look for another lender.  As discussed in Note 7,
the Company's loan agreements with Northwest Farm Credit
Services contain covenants that require the Company to
maintain certain financial ratios and balances.  The Company
was not in compliance with certain of these covenants at
December 31, 2000 but had received waivers thereon.  In light
of the Company's current projected earnings and cash flow,
cash generated from operations will not be sufficient to pay
back the bank debt on a current basis.  Management plans to
continue to market some pieces of real estate, the sale of
which would generate significant cash to repay the debt.
Additionally, management plans to obtain financing from
another financial institution.  If the Company is unable
to sell real estate and/or refinance the debt with another
institution, the Company may be unable to continue its normal
operations, except to the extent permitted by Northwest Farm
Credit Services.