Compliance 101

The Punchdown Expert Talks: Wine Compliance 101 with Nicole Elizabeth

Introduction

In the wine industry, compliance is often an overlooked yet critical aspect of running a successful winery or brand. Whether you’re a winemaker launching your own label, a new winery owner, or a General Manager navigating the complexities of regulatory requirements, understanding compliance is essential for operational success.

In this episode of The Punchdown Expert Talks, Lauren Heindel, Community Manager for The Punchdown, sits down with Nicole Elizabeth, owner of Premier Wine Compliance, to break down the basics of wine compliance. Nicole has years of experience helping wineries stay compliant with state and federal regulations, ensuring that businesses operate smoothly and avoid costly missteps.

What is Wine Compliance and Why is it Important?

Nicole describes wine compliance as the legal framework that governs how wineries produce, label, and sell their products. Compliance ensures that wineries operate within federal and state laws, avoiding fines, production delays, and potential business closures. More importantly, it provides a solid foundation for financial success—staying compliant is the first step to profitability.

The Stairs Analogy: Understanding the Compliance Journey

Nicole introduces a step-by-step approach to understanding wine compliance, breaking it down into manageable steps:

1. State Licensing: Registering your business and obtaining necessary state permits.
2. TTB Basic Permit: Acquiring the federal permit to produce and sell wine.
3. Deciding Where to Produce: Choosing between a custom crush facility, home winemaking, or an Alternating Proprietorship (AP) arrangement.
4. Winemaking Process: Ensuring production follows federal and state regulations.
5. Labeling Compliance: Getting label approval from the TTB and meeting specific requirements.
6. Sales Channels: Determining where and how to sell your wine, whether DTC, wholesale, or through a distributor.
7. Permitting for Sales: Securing permits for each sales channel, including direct-to-consumer shipping licenses.

Navigating State Licensing and Quirky Liquor Laws

Every state has unique alcohol regulations, and Nicole shares some of the quirkiest ones she’s encountered. The process of obtaining state licenses varies, often requiring wineries to jump through different bureaucratic hoops depending on the market they wish to enter.

Reporting Requirements and Common Pitfalls

One of the most important ongoing compliance tasks for wineries is filing the TTB 5120.17 report (Wine Premises Operations Report) on a monthly and yearly basis. Nicole warns that many software solutions claim to generate these reports automatically, but if sales and production data aren’t properly linked and coded, the reports can be inaccurate—leading to compliance violations. She highlights how sparkling wine, for example, falls into a separate tax category and requires special handling.

Staying in Compliance: Tools and Best Practices

Nicole shares best practices for generating accurate compliance reports, including the importance of using a reliable winery management software like InnoVint to track production and sales data seamlessly. She emphasizes that maintaining accurate records is not just about avoiding fines but also about maximizing profitability by minimizing tax liabilities.

How Premier Wine Compliance Helps Wineries Stay Compliant

Nicole and her team at Premier Wine Compliance work closely with wineries to keep them in the “green zone” of compliance. From securing licenses to managing regulatory reporting, they help clients navigate complex compliance requirements and ensure that they don’t overpay taxes due to misreported data.

“Being compliant is the first step to being profitable,” says Nicole. By ensuring accurate data tracking, wineries can reduce their tax burden, streamline operations, and focus on what they do best—making great wine.

Final Thoughts

Wine compliance may seem daunting, but with the right knowledge and support, wineries can set themselves up for long-term success. Whether you’re just getting started or looking to refine your compliance strategy, having experts like Nicole on your side can make all the difference.

For more resources and expert insights, stay connected with The Punchdown and explore tools like InnoVint to simplify your compliance journey.