Is Your Wine Business an Essential Business?
As of March 18th, eight Bay Area counties have issued “Shelter-In-Place” orders for all residents. These counties include Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, Sonoma, and Napa counties. Just outside the Bay Area, Monterey, Mendocino, San Benito and Santa Cruz counties have also issued “Shelter-In-Place” orders.
With respect to businesses, the orders – which are all similarly worded – direct all businesses except “Essential Businesses” to cease activities and send employees home. There are exceptions, of course, including for certain “Minimum Basic Operations” as noted below.
This alert addresses the question whether wineries are “Essential Businesses” under applicable county “Shelter-In-Place” orders. However, all business owners in the covered counties need to understand how the orders apply to their business in order to make critical decisions with respect to the future of their business.
Wineries in Sonoma and Napa counties clearly fall under the definition of “Essential Businesses”. The Sonoma county order defines “Essential Businesses” to include “agriculture, food, and beverage cultivation, processing, and distribution, including but not limited to, farming, ranching, fishing, dairies, creameries, wineries and breweries in order to preserve inventory and production (not for retail business).”
Similarly, the Napa County order defines “Essential Businesses” to include “any form of cultivation of products for personal consumption or use, . . . and associated activities including but not limited to activities or businesses associated with planting, growing, harvesting, processing, cooling, storing, packaging, and transporting such products, or the wholesale or retail sale of such products”.[1] However, this language is not included in the orders issued by other counties.
Unlike Napa and Sonoma, wineries in Alameda, Contra Costa, Marin, Monterey, San Benito, San Mateo, Santa Clara, Santa Cruz and San Francisco counties need to consider whether their businesses fall under one of the following categories of “Essential Businesses”:
- “Grocery stores, certified farmers’ markets, farm and produce stands, supermarkets, food banks, convenience stores, and other establishments engaged in the retail sale of canned food, dry goods, fresh fruits and vegetables, pet supply, fresh meats, fish, and poultry, and any other household consumer products . . . This includes stores that sell groceries and also sell other non-grocery products. . . ”
- “Food cultivation, including farming, livestock, and fishing . . . ”
- “Businesses that supply other essential businesses with the support or supplies necessary to operate . . . ”
- “Businesses that ship or deliver groceries, food, goods or services directly to residences . . .”
If your business does not fall under one of the foregoing categories, you may still be able to continue the production and sales portion of your wine business. The Alameda, Contra Costa, Marin, Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz orders reference official “Guidance” issued by the California Department of Public Health (“CDPH”). The CDPH Guidance for Retail Food, Beverage and Other Related Service Venues, issued on March 16th, provides that “bars, wineries, breweries and pubs should be closed, except for venues that are currently authorized to provide off sale beer and wine to be consumed off premises are allowed. This guidance is not intended to affect production of beer and wine.” Wineries with facilities in Alameda, Contra Costa, Marin, Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz counties could argue that the orders issued by such counties are not intended to affect wine production or off premises sales.
Unlike the other “Shelter-In-Place” orders, the San Francisco order explicitly incorporates by reference all CDPH Guidance. As a result, wineries with facilities in San Francisco have a stronger argument that the order is not intended to affect wine production or off premises sales.
Finally, all businesses should remember that the “Shelter-In-Place” orders of all counties permit “Minimum Basic Operations” regardless of whether your business falls under the definition of “Essential Businesses”. “Minimum Basic Operations” include “the minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions”. However, note that all activities conducted while the “Shelter-In-Place” orders are in effect, whether such activities fall under the definition of “Essential Businesses” or “Minimum Basic Operations”, must still comply with all social distancing requirements.
If you decide to continue business operations as an “Essential Business” or for purposes of maintaining “Minimum Basic Operations”, be sure to keep the safety of your staff in mind, including how your staff will get to and from work, and how they will be able to maintain social distancing and follow other recommended safety procedures to limit potential exposure to the Coronavirus.
If you have any questions about how the “Shelter-In-Place” orders apply to your business, please give us a call.
[1] The Napa county “Shelter-In-Place” Frequently Asked Questions also provide that the following businesses are considered “Essential Businesses” under the order: “Agriculture, food, and beverage cultivation, processing, and distribution, including but not limited to, farming, ranching, fishing, dairies, creameries, wineries and breweries in order to preserve inventory and production.”
