Winery Owners Most Important Opportunity

Why So Many are Missing It

employee retention credit

By: Catherine Tindall

  The Employee Retention Tax Credit (ERTC) is one of the best ways for those in the beverage industry to regain their footing in a post-COVID age. Unfortunately, according to current estimates, many eligible businesses are missing out on this historic opportunity. For those who received or may otherwise be familiar with the Paycheck Protection Program, also known as the PPP, the concept is similar, but there are key differences that make the ERTC a much more generous program overall.  To understand why I will outline some of the key provisions and eligibility parameters, explain the process for claiming the credit, and answer some common questions I encounter in my own practice, such as “why haven’t I heard of this before?”

  The ERTC is a tax refund credit entitling employers to up to $26,000 per employee, depending on the number of quarters a business qualifies for. Eligibility is determined by either revenue disruptions or government orders on a quarterly basis. Many wineries are unaware that they are eligible for the ERTC due to the capacity and operation restrictions on their indoor dining and/or tasting rooms that occurred during the pandemic. Financial disruptions to that aspect of the business trigger ERTC eligibility for all the divisions of the winery, not just the restricted segment.  We routinely see businesses qualify for six or seven-figure credits under these parameters.

  There are a number of features that set this credit apart from other programs designed to aid businesses affected by the pandemic, like the PPP. Unlike the PPP, the credit itself comes back as paper checks from the IRS, and also unlike the PPP funds, which were restricted to certain uses, a business owner is free to use the ERTC however he or she sees fit. This is because the credit is actually a refund of wages and payroll taxes your organization has already paid. A consequence of this is that there is no overall program limit on the funds to be disbursed through the ERTC, in contrast to the PPP which had a limited fund pool. Businesses affected by government orders are entitled to every cent they qualify for. Taken together, all of these factors are what gives this program its power. The only limitation is time. This credit will begin to be phased out in April of 2023, meaning that business owners need to ensure they submit their claim as soon as possible. 

  Given the tremendous upsides, every business owner in the beverage space should try to see if their business qualifies, even if it seems doubtful. There is no need to become experts in the credit’s provisions, which can often be nuanced. The important thing is to find the right professional, and, to this point, one must be careful. There are unfortunately a lot of bad actors in this space looking to make a quick buck, and many of them are very good at seeming legitimate. 

  The following are some of the most asked questions associated with the ERTC.

  Should I get a second opinion? Because of the substantial nature of these credits, it’s often worth speaking to multiple providers for the credit to get a sense of the relative merits of each, and to look to the expertise and experience of those working on your case rather than fancy marketing or smooth sales tactics.

  Why haven’t I heard about this before? There are several reasons why many business owners have not heard of this important credit. One is that, in contrast to the PPP program, the ERTC has not been well advertised by the government (after all, since when did the IRS advertise refunds you’re entitled to). Another is that many tax practitioners are hesitant to pursue it given the sometimes complex nature of the claims if this isn’t their area of expertise. Finally, we commonly find that too many CPAs mistakenly believe that their clients do not qualify for the credit, and so never bring up the possibility of claiming it with them.

  I would encourage all winery owners to explore eligibility actively. The potential benefits of qualification, hundreds of thousands of dollars in obligation-free money from the IRS, is one of the highest value things you could do for your business in the current environment of economic uncertainty.

  There are certain pitfalls to avoid, such as dishonest companies operating in the space, but if you choose the right firm or professional to partner with, the process is remarkably painless. Just be mindful that this is an opportunity with a time limit attached. With less than a year before it begins to phase out, now is the time to claim the credit you’re entitled to.

About the Author

  Catherine Tindall is Partner & CPA, Dominion Enterprise Services (DES), a full-service CPA firm providing tax planning and consulting alongside specialty tax credit processing. The firm has more than 50 years of collective experience and recently announced the launch of its Employee Retention Tax Credit (ERC) Division to help restaurants assess their eligibility for the ERC and properly secure the maximum refund allowed. Learn more at https://dominiones.com

Rare Wines Around The World 

wine collections displayed

By: Hanifa Sekandi

  Every wine collector believes their collection of vintage wines is nothing like anyone has ever seen. When collectors curate wines, they look for the best and go to great lengths to get their hands on a bottle. If this is you, you may be missing a few rare gems that only those in-the-know truly, know about. Further, some of the rarest wines in the world come with a jaw-dropping price tag and are not easy to come by. Surprisingly, there is no TV show called “Precious Wine Hunters.” Wine represents lost stories that take us back in time, stories that remind us that in every century, people overcome obstacles. Wine is a tribute and notebook of lost times full of lessons. With every bottle, there was either joy or turmoil. Take a trip down vineyard lane and discover the untold stories of vines of the past, the people who toiled on that land and the pain and glory they felt, one crushed grape at a time.

What Makes Wine Rare?

  Before we explore the unknown world of wine, it is essential to clarify what classifies a rare wine since we live in an overly social world. With different medians for information, confusion is the norm. It is easy to create an illusion of luxury. Moreover, it is easy to buy into the scarcity effect and assume that something exclusive is rare. Precisely, it has nothing to do with sitting with the cool kids or faking it until you make it. A rare wine stands alone in its glory and does not need pomp and circumstance to catch your attention. It is what it is: rare. So, what makes wine rare? This is a nuanced conversation because a range of factors come into play.

  A rare wine may be a bottle that houses exquisite grapes that produce a smaller yield. Such grapes may not grow if conditions are not favorable. Vines spoiled by pests will also produce a smaller yield since few grapes, if any, can be harvested. Hence, it is a rare bottle of wine with a small number of bottles produced. A winery producing a limited amount of select wine can increase the price. Both accessibility and price point can render a wine rare. Another element is time. How long has this wine been stored? For example, a 1774 Vercel “Vin Jaune d’Arbois” was stored close to France’s Jura Mountains in an underground cellar. This wine sold for $120,800 at auction. Both age and it being a rare historic discovery classify this wine as rare.

  So yes, scarcity does factor into designating a select bottle of wine rare. But there is more to the story. Although, a homebrew wine that you made may be rare for you. It certainly will not have sommeliers lining up to sample or make it to the auction block. The types of grapes contribute to its rarity and the vineyard of origin. Of course, a wine produced from a single vineyard is considered rare. Also, who made it is an important marker. Many viticulturists would agree that the rarer the grape, the better. The 30 grape varieties that are predominately used in 70 percent of the bottles of wine produced worldwide would not be considered rare, per se. When we think of rare, we travel to smaller vineyards that grow vines that are not commonly known. These are wines that not only have a hefty price tag but may only be familiar to those who live close to the vineyards or true precious wine hunters. So, there are elements of exclusivity, scarcity and time determining if a wine is a gem to imbibe or carefully store, to gaze at or boast to friends and fellow collectors. 

A Rare Find in Germany

  There are many rare finds in the wine landscape, and this is indeed one of them. The vineyard of origin of this bottle of wine found in a Roman soldier’s tomb in 1867 will never be known. There is no way to decipher whether the grapes used are from an elite vine. It is simply called the Speyer bottle of wine. This bottle of wine is touted as the oldest bottle of wine in existence. It rests comfortably on display at the Pfalz Historical Museum in Speyer, Germany. It has remained intact for well over 1,693 years in a 1.5-liter glass bottle with intricately designed dolphin handles.

  Inside this well-preserved bottle floats olive oil and herbs, used to preserve the wine or enhance the flavor profile. It is sealed with wax. It dates to 325 C.E, Roman rule, a time when local grapes were used for making wine. The ratio of wine and oil is in favor of oil. Since it was discovered in the soldier’s tomb along with other broken bottles, it may signify an afterlife offering or be placed alongside the deceased for ritual purposes. Can you drink it? According to researchers, although taking a few sips will not kill you, it most likely does not taste particularly good! 

The High-Priced Bottles from France’s Jura Region

  It is clear that time is a factor in the rarity of wine. The length of time wine has matured or whether it has historical roots matters. Some wines are considered both vintage and rare. A bottle of 1774 Vercel “Vin Jaune d’Arbois sits perfectly in this category. Not only is it a rare wine, but it is also a vintage classic made by legendary winemaker and inventor of vin jaune, Anatoile Vercel. The sale of three bottles in 2018 was put forth by his descendants who live in Arbois. The vineyard where these wines were made is in the eastern Jura region. It was during King Louis XVI’s reign when these bottles’ grapes were harvested, another element that adds to the rarity of this wine.

  Can you drink it? How does the oldest wine in the world taste? Fortunately, 24 wine experts who have had the privilege to taste it in 1994 can answer these questions. Yes, it is, as you would imagine it, sublime. They rated it a 9.4 out of 10 and noted that the longer it ages, the better it will get. The experts recommended that the next time it should be tasted is 100 years from now. So, how does it taste? Aromatic notes of cinnamon, spices and curry engulf the senses with a smooth essence of nuts, vanilla and dried fruit. The savagnin, a local grape used to make this wine, is matured in a barrel with a film of yeast. It is also attributed to the yellow coloring. 

Secrets in New Jersey

  Who would have thought? Certainly, not the people who discovered a case of 1796 Lenox Madeira stowed away at the Liberty Hall Museum. In 2015, during renovations, this imported case of wine was discovered while encased behind carefully plastered walls. How did it get there? And to whom do they belong? Madeira is a Portuguese wine that was illegally smuggled into the United States. John Hancock was a merchant, political leader and an American founding father infamously known for avoiding British tax and smuggling wine on his ship, Liberty. It has been documented that on this very ship, bottles of black-market Madeira were seized, an incident that has been purported to have incited the Boston riots. It was the prohibition era, but Hancock’s bold moves set in motion a new era: the Revolution. 

  America represented the new world for those who settled. Although, it was a world that already lay rich in culture from the people who walked the land centuries before the ships came to shore. Madeira, a much-loved beverage of the 1700s, carries as much turmoil as it does joy. This was a voyage of promise and the realities of both pain and displacement, but not what the winemakers of the vineyards on this island off the east coast of Morocco foresaw. This viticulture gem is prized for its history and the journey took to foreign lands, another reminder that wine carries both joy and sorrow. Does this wine measure up? As of now, no one has tried it.

  There are many unexpected turns in the world of undiscovered rare wines. There is a bottle or case of wine somewhere yet to be discovered. There is a winemaker whose lineage carries prestige or a rare grape only a select few may try. This is what makes wine unique and loved by many. It is an unpredictable beverage shrouded in secrecy and infamy. It is a bit of an anomaly that in modern times, one can casually stroll down liquor store aisles – a remarkable freedom in and of itself. For people of past times looking into the future and seeing the selection of wines on demand, just at your fingertips, this would be a rarity. Every wine, whether prestigious or not, would leave them spellbound. 

The Cape Crusaders of PIWOSA 

wine bottles spread out

By: Tod Stewart

  Challenging perceptions – and righting misconceptions – typically isn’t an easy thing to do. This is especially true when attempting to raise the stature of something generally not held in particularly high esteem. Until fairly recently, the wines of South Africa tended to be passed over by all but the most knowledgeable wine types – at least here in Canada (but I suspect in other parts of the world as well). Thankfully, this situation has changed considerably – largely due to the quality of the wines themselves and the efforts of dedicated winemakers continuously looking to improve things. I dub these folk “Cape Crusaders,” among them, the members of the Premium Independent Wineries of South Africa (PIWOSA for short) are some of the most heroic.

  Though these guys and gals are superheroes of the wine world, they were wearing jeans rather than spandex (as was I, so let’s get that cleared up right away) when I met up with a few of them in a Toronto bar a while back. Their mission isn’t ridding the world of crime but rather ridding it of ignorance, preconception and overt cluelessness. All in the name of South African wine. Gesundheit to that!

  The group came together via a shared vision of how the wines of South Africa – and the industry itself – should look.

  “It was a combination of a lot of years of frustration,” admitted Alex Dale from Radford Dale (and also the PIWOSA co-founder and director), who shared a glass or two with me along with Paul Clüver of the eponymously named Elgin Valley-based Paul Clüver Wines and Bruce Jack, from the Drift Farm in the Overberg Highlands. “Of all of us traveling around the planet, going to the shows, working with importers, doing our bit, we realized that the reputation of South African wines, in many markets, was being driven by wines on the low end of the scale. This isn’t South Africa – especially not South Africa today.”

  Of course, guiding consumers to the best wines South Africa has to offer assumes, to a degree, that they even know much about the country’s wine industry. It could be a bit of a shaky assumption, at least as far as the market for South African wines in Canada goes.

  “South Africa remains a largely unknown winemaking country in Canada. It is geographically very far away, so quite fairly, many people have not visited; therefore, their frame of reference is limited,” suggests Laurel Keenan, the manager of Wines of South Africa (WOSA), Canada. “That in and of itself can be a big obstacle. The second is the amount of shelf space we are generally afforded in retail stores, which is quite small and sometimes hard to locate. For a long time, the selection was also not reflective of the best wines produced there, but that is slowly changing.” It’s also worth remembering that sales of South African wines and spirits were impacted by global anti-apartheid sanctions imposed in the mid-1980s that were not lifted until 1994, meaning that once they were lifted, the industry required a huge “re-education” effort.

  People like Dale and the rest of the PIWOSA contingent realized that if a change were to be accelerated, they would have to, in Dale’s words, “roll up our sleeves and do it ourselves.” With no government funding, the member wineries had little choice but to crack their collective piggybanks and pool their resources. “Either we clubbed together to make a difference and make it happen by ourselves, or it wasn’t going to happen at all,” Dale emphasized.

  One might wonder (okay, I wondered) how this “club” of 10 wineries (today 12 as a couple of new member wineries have since jumped aboard) in a sea of about a thousand in South Africa can hope to have any impact on the global market. Clüver is quick to point out that PIWOSA represents the “super-premium” tier of South African wines. In other words, the wines that fall into the price bracket noted by Keenan are where the real “bang for the buck” starts to be realized. And while there are other South African winery associations in operation, none, in Clüver’s eyes, “are as committed to the process or as organized and active as we are.” However, he is emphatic that PIWOSA member wineries aren’t the only ones producing fantastic wines at what he says are “ridiculously low prices.”

  Ridiculously low prices can be a bit of a double-edged sword. Though I would be the first to agree that its top-tier wines are largely undervalued, the “cheap and cheerful” image of South African wines may have created a misconception among consumers that this was all the county’s winemakers had to offer. And trying to work from the “bottom up” is no cakewalk. If you get into the market on the high end, it’s fairly easy to work down (look, in no disparaging way, at what Robert Mondavi did – reportedly personally disfavourably – with the Woodbridge brand). It’s not so easy going the other way.

  “The South African entry into the major market, after 1994, was never from the premium end. It was always volume, always commodity, always the lowest common denominator. So our collective mission, our task, is to eliminate old preconceptions and raise the bar. A lot of sommeliers are very Euro-centric with their wine lists and perceive South African wines in a way that is completely inaccurate. We want – and need – to change this, and the impact we can have as a collective is exponential to what we could do alone.”

  I touched base with Dale recently to get an update on PIWOSA and where things currently stand vis-a-vis the quality and perception of South African wines. What he told me was refreshingly positive.

“In many places, it is day and night compared to 10 years ago,” he enthused. “Gone are the days when you needed to hear references to burnt rubber and critter labels at every turn. We are welcomed today just about everywhere, taken seriously and listened to. Sure, it’s not like selling Burgundy, but we have made enormous strides, and PIWOSA has been very much at the forefront of this, notably in the UK, Canada and across Asia.”

  Of course, the industry today faces challenges that were likely unexpected when PIWOSA was initially established. Climate change and prolonged drought are two major impacts on South African winegrowers.

  “The change in climate coupled with the sustained drought we experienced in 2016, 2017 and 2018 along with the ongoing lack of a reliable supply of electricity got many of us thinking – and some acting! Many wineries have implemented significant water efficiencies as well as energy- generating initiatives, whether emergency-type fixes with generators or much more sustainable, long-term shifts in introducing solar. There has been a realization that in agriculture, we can’t just carry on as before. Although not yet widespread, some of us are converting or have converted to organic production (Radford Dale included, as our Estate in Elgin is one of only and handful in South Africa to be fully organically-certified).”

  When asked if there have been any trends in winemaking styles, Dale stated, “There has been a generational shift away from the sorry era of Parkersied wines and the big/powerful-is-beautiful thinking. Interestingly, this transition plays directly into the handbook of PIWOSA, where we have always advocated balance and greater authenticity in our wines. Also, we’ve seen the emergence of a young and diverse generation of very aware, passionate and capable winemakers, and this is possibly the most exciting development in the South African wine industry. We really have a hotbed of talent and energy here right now.”

  PIWOSA’s commitment to excellence goes well beyond the crafting of top-quality tipples.

“Our ethics charter was pioneering in the industry. It committed each member to the highest levels of integrity, employee-welfare, ecological best-practises and so forth, long before these subjects came under the spotlight and global scrutiny, as they have in recent years. There is certainly more attention to these matters in the industry now, generally, which has got to be a very positive development. Lastly, I think the resilience we have demonstrated as an industry, over the COVID era, has shown just how strong we can be. Not only did our government try to put us all out of business and fail (with multiple bans on the sale or transport of wine, initially in both export and domestic markets), not only did we receive zero financial support, grants, tax-relief, employee support or any other COVID-related funding, but we ended-up selling significantly more premium South African wine internationally, as consumers around the world rallied to help us in the face of what was plainly an unjust targeting of our industry, for political reasons, with no connection to the pandemic whatsoever. As Nietzsche said, ‘What doesn’t kill you makes you stronger.’ It certainly has!”

  As a winegrower, you know that the best quality fruit usually comes from vines that are resilient, adaptable and, well, pretty stressed. Considering what the vignerons of South Africa have gone through over the years, perhaps these factors result in top-quality winemakers as well.