As the quantity of winegrapes produced in California increases, contracts between growers and wineries are changing. More than ever before deals focus on quality and requirements specific to a certain winery and its winemaker, shifting away from concerns about yields and tonnage. Napa attorney Bob Fanucci, who regularly represents wineries and growers in sale and lease contracts, told those attending a recent grower seminar on evaluating grape contracts in St. Helenea that winery requirements may lead to higher risk for growers. No one grape contract fits all, Fanucci said. Most are highly negotiated.
Terms depend on the bargaining positions of the grower and the winery.
Vineyard location is important, as is the age of the vines and the percent of the grower s grape that will go into the bottle. Sales contracts are like leases, he said, in that they guarantee a rate of return or establish a sliding scale as brix increase. Another contract approach, he said is bottle-based pricing formulas. Long used in France, bottle-based pricing ties the price of the grapes to the price of the wine for a period of several years. The contracts are intended to protect the grower with adequate minimum prices and the opportunity to share in any increase in wine prices.