So I have this buddy that has a payment problem. One of his winery customers is one momth late with his first payment. He’s asking my advice. Since I’ve had a few wineries owe me money over the years I guess I’m a good resource.
He’s thinking about outing them on the wine boards if not paid in a timely fashion. Obviously my buddy’s pretty pissed. Seems like an extreme action. We’d like to hear what you think.
We really need more info on what has transpired since the bill was due.
Has the grower made contact (and received confirmation that contact was made, I.e. a returned call or email)
If no contact has been confirmed, have other attempts been made to establish contact?
Can the grower visit the winery for an In person attempt at collection?
IMHO one month late is a bit soon to out a winery in such a way but without more details of the nature of the late payment, or lack of payment.
Now, if the winery has confirmed that the bill is due and has said, " I’m not paying!"
That is a very different story.
Assuming economic hardship is the reason for the late payment: IMHO working with them rather than against them is more likely to result in success. Outing them is likely to make tough economic times even worse, reducing the probability your buddy will get paid. Get them on a payment plan or something, it’s better to get some than none.
Has there been any ‘communication’ from the winery at this point? Are they ‘blowing them off’ by ignoring the bills, or are they wanting to ‘negotiate’? I have to agree with Mel and Ed here, and feel that working with them might be the better avenue, and will hopefully assure that they will get paid in full, albeit perhaps in a little later timeframe than what they had agreed to originally.
Keep us posted . . .
I bet I have 50 or more patients late clearing bills for surgery done in 2012, and no recourse to ensure payment - late or not.
Tell your buddy to take a deep breath and find some perspective.
What others have said. If it continues and there is no attempt to pay (assuming he has sold to them previously) he could threaten to put a lien against any bulk wine produced from his vineyard and/or finished case goods and the winery would not be able to sell those wines until the liens were cleared. This was done by some growers when Crushpad imploded.
Are grape sales subject to PACA(Produce and Agricultural Commodities Act)? That gives the grower a lot of leverage if the rules are followed carefully.
The grower has tried to make contact and is getting the run around: 'We’re working on it, etc". I guess the same thing happened last year too. He’s trying to make things work, but the winery isn’t even giving him an estimated time or anything. I can see why he’s ticked off. Nothing worse than hearing nothing back.
I have one winery that still owes me for some 2011 grapes and of course they have not paid for their 2012 grapes. Two other wineries owe me for some of their 2012 grapes. 50% of our 2012 grape invoices are still outstanding. Prior to 2008 most wineries paid by 30 days or so, but after the recession 60-90 days has become the new 30 days. With credit being so tight and banks unwillling to loan money growers are becoming bankers, except we do not collect any interest.
hey you guys are better off than attorneys. If our clients pay on time they give themselves a discount 
I agree. And 30 days?!?!?!? That is no time in at all in the world of late payments to make a fuss.
I have one winery that is pulling this crap with me. If I sell to him again it will be with an increased up front price as well as interest on late payments.
To the OP. I don’t know what to tell your friend. I would continue comunication as much as possible while trying to find a new buyer for next year or at least a new contract with some teeth. Customers like this suck ass. Not being from Ca I don’t know if you can file a mechanics lien against the winery. I believe we can here in Texas.
Good luck to your friend.
Personally id set up the next contract with draconian interest after X date, if the folks are going to honor the deal them the interest/penalties wont come in to play. But at this stage of the game i dont think tou want to go public, you will be nuking bridges and you dont want someone out there smearing your name even though you are in the right
Tell him that I’m sorry. The check is in the mail. Christ!
This is truly amazing to listen to and I am a firm believer now that all aspects of business is affected by things of this nature. I am in the restaurant business and I have one client that is late paying his bills. What does the vendor do?? He/she sends invoices with interest attached (not that any might be collected) and then after invoice after invoice sends it out for collection. Not uncommon to have Accounts Payable be outstanding past the 90 day mark. Cash flow is a definite factor.
I talked with my buddy yesterday. He’s sent a couple of emails in the past week (email addresses that are active and proven) asking for answers and hasn’t got word back. Cowards? Jerks?
Jerks sure but likely poor cash-flow and underfunded jerks who, like their brethren here in California, pay debts when they can.
Casey, tell your buddy that the best way to get payment is weekly telephone calls starting the day the invoice comes due. He should always remind them of the terms they agreed to, tell them he needs the money, and demand to know when he is going to get paid. If he is dealing with an accounting clerk he should speak directly to the CFO, and if that doesn’t work escalate to the Owner or CEO.
In my 20 years experience of running a business I’ve learned that emails asking for payment are too easy to ignore, whereas numerous telephone calls will sometimes get you paid just to make you go away and stop bugging them.
Last resort is a letter from his attorney demanding payment and threatening all kinds of dire consequences if it isn’t received asap.
Also if you are only selling to somebody once per year it’s perfectly OK to ask for annual updated credit references, and if they are not satisfactory put them on CIA. You are in business to get paid on time, not be their bank.
I know in agriculture you can file a mechanics lein in CA although I am not sure regarding grape contracts. WE have done it before. Usually you get paid right away in those circumstances. However, I wouldnt do it until much later in the process.
Wow, I thought the wineries I shipped to were behind in payments! It has definitely gotten worse recently. Last year was the first we ever had a winery substantially behind in payments. The first money we received this year from any winery came in mid-December. About 25% of the grape sales are now 90 days past due. In a perverse way it’s nice to know you’re not the only one. If you can, I would also suggest visiting the winery. That seems to work even better than calling. The person answering the phone can always say the owner or CFO is not around. Know what cars the owner or CFO drive and make sure they are in the parking lot when you arrive. I’ve already gotten the message from some underling they are not there. I then tell the person the owner’s car is there so they must be around someplace. When they give you the runaround on payment just ask if they allow customers to pay for the wine when they feel like it.
Not all wineries are late. We used to ship to an out of state winery and they always paid within 30 days. The winery wanted to continue buying our grapes, but their distributors wanted them to reduce the number of wines that were labeled American.
For the doctor and attorney that said you should in a sense expect late payments. I have never met a doctor or attorney that is willing to work for an entire year and then finally get paid at the end of the year for an entire year’s worth of work. They should try operating under that cash flow scenario. You would have to operate your business with absolutely no income for most of the year.
What really gets my goat (not Walter Taylor’s wine) is the winery that says they don’t have the money and then go on trips to California or Europe! You end up not going to meetings that are just down road and canceling subscriptions to wine and grape magazines because the cash is not there.