The Crush November 2023 - 2

Market Factors and Concerns
Overall demand for grapes was weak this year. " It was
a poor market for the spot market in the late season
and through harvest, with weak activity for any grapes
not already purchased or under contract, " Bitter said.
" Wineries were also enforcing the maximum tonnage
limits in their contracts and not taking any overage from
higher yielding vineyards, " he added.
In general, growers that had longer-term contracts in
place prior to 2023 will see favorable prices for grapes
sold this year. However, moving into 2024, if grape
demand and prices continue to be weak, grapes coming
out of contracts could spur a " musical chairs " situation as
grapes move between different buyers, and wineries will
have the potential to cherry pick from growers with the
best quality grapes. " Being a grower with high quality
grapes, and a reputation for quality practices will be an
advantage going into 2024, " Bitter feels.
The main varieties with most demand continue to be
chardonnay, cabernet sauvignon, and pinot noir. Demand
continues to grow for sauvignon blanc and growers have
responded with increased plantings. Demand and prices
for grapes from Napa and Sonoma are stronger than
other Coastal areas and statewide.
While everyone wants to see stability in the market,
wine sales trends indicate less demand and downward
consumer sales. Bitter said market bright spots based on
wine sales are sauvignon blanc, and premium box wines
at $4/bottle equivalent and higher, but everything else is
flat or trending downward. " As we look forward to 2024,
people need to watch and understand market dynamics
and look at wine market shipments through the holiday
season, " Bitter advised.
Grape Rejections Rise
Grape rejections by wineries have significantly increased
this harvest related to seasonal, weather, and market
factors. Depending on the specific circumstances
regarding rejection and the terms and parameters in
their written contracts, growers may have recourse if
they believe their grapes were unreasonably rejected.
One option is to file a complaint with the California
Department of Food and Agriculture's (CDFA) Market
Enforcement Branch (MEB). The role of the MEB is to
enforce laws to protect against unfair business practices
between producers, handlers, and processors of
California farm products. MEB also takes complaints and
assists with failure to pay problems between parties.
CAWG legal counsel Dale Stern with Sacramento-based
law firm Downey Brand LLP has been advising growers
about options for recourse regarding rejections. Stern
listed three major reasons this year for wineries/grape
Page 2 | November 2023
buyers rejecting grapes: grapes failed to reach required
Brix/sugar levels; grapes had too much mildew or rot;
or the winery set a date to close crush operations and
would not accept any more fruit for winemaking.
If a grower is considering disputing a winery rejection,
Stern first recommends they review their contract's
written language and understand what the contract
requires. In the case of inadequate Brix levels, the
contract should specify a minimum acceptable Brix level,
or a range of levels acceptable for the grapes upon
delivery. If the grower believes the grapes meet the
minimum, Stern suggests getting a third-party evaluation
from a PCA or a commercial testing lab with a written
report they can take to the winery. " Get testing and
documentation to build evidence that the minimum Brix
level has been achieved, " Stern advised.
In the case of rejection based on rot or mildew levels,
some contracts specify zero acceptable levels, other
contracts may allow a tolerance range of 1 to 3 percent
or more within the total lot from the vineyard or the
harvested load. Again, if a grower disputes the winery's
rejection, get a third-party evaluation by a PCA walking
the vineyard and a written report with documentation
and test results. If a grower cannot settle a dispute with
the winery directly based on the evidence provided, an
option would be to file a complaint with the MEB.
Stern noted that one Central Valley winery sent a letter
to growers during harvest informing them the winery
would close on November 10 and no longer accept
grape deliveries after that date. In such a case, the
grower should review the contract to see if it specifies
a time period or harvest window for accepting grape
deliveries. While more contracts are being written with
a hard deadline for fruit delivery, if there is no specific
deadline or date in the contract, the winery may not have
reasonable cause to refuse delivery. Stern cited Section
55873 of the California Food and Agricultural Code that
reads: " It is a violation of this chapter if the applicant, or
licensee, has rejected without reasonable cause, or has
refused to accept, without reasonable cause, any farm
product which is bought or contracted to be bought
from a producer by such applicant or licensee, . . . "
" If the winery is using the excuse they are full and the
facility is closed, and that is not part of the contract, I
would encourage growers in that case to file a claim, "
Stern said. " Growers have recourse other than spending
money on a lawyer, by going to the MEB website and
filing a complaint with a $100.00 filing fee, which they
can do on their own, " Stern said.
See page 9 to learn about a webinar CAWG is hosting
focused on grower options with MEB and Downey Brand.

The Crush November 2023

Table of Contents for the Digital Edition of The Crush November 2023

The Crush November 2023 - 1
The Crush November 2023 - 2
The Crush November 2023 - 3
The Crush November 2023 - 4
The Crush November 2023 - 5
The Crush November 2023 - 6
The Crush November 2023 - 7
The Crush November 2023 - 8
The Crush November 2023 - 9
The Crush November 2023 - 10
The Crush November 2023 - 11
The Crush November 2023 - 12
The Crush November 2023 - 13
The Crush November 2023 - 14