WINE IN TIMES OF COVID-19 : WINE IN TIMES OF COVID-19 : HOW TO - - PowerPoint PPT Presentation

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WINE IN TIMES OF COVID-19 :

HOW TO SURVIVE AND THRIVE

WINE IN TIMES OF COVID-19 :

HOW TO SURVIVE AND THRIVE

By: Emily Harris Gant

COVID-19 Requirements, Relief & Recommendations Washington Wine Institute & Washington Winegrowers Association Friday, April 10, 2020

This webinar contains educational information necessarily of a general nature and cannot be construed as legal advice.

How Does COVID-19 Impact My Contracts?

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Termination

4

• Termination for convenience
• Termination for cause
• Survival of terms?

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Force Majeure

5

A party may terminate this contract if events or occurrences beyond the party’s control make it illegal or impossible for the party to perform its obligations hereunder (a “Force Majeure Event”). Force Majeure Events may include, but will not be limited to: acts of God; war; acts of terrorism in the city in which [Winery] or [Group] is located; governmental regulation, including a pandemic, epidemic or quarantine of the [Winery] or [Group’s] location by a national, provincial, state or local governmental authorities with jurisdiction; disaster; fire; strikes (other than those involving the employees of the party seeking the benefit of this section); civil disorder; or curtailment of transportation facilities which prohibit 25% or more of attendees from attending [Group’s] event, provided that, and for clarity, in each case, the listed event or occurrence makes it illegal or impossible for the applicable party to perform its obligations hereunder.

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Force Majeure, cont.

6

• Terminate without liability?
• Delay or excuse performance?
• Very dependent upon the specific

language in the FM clause

• Clauses read narrowly

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Force Majeure, cont.

7

Party seeking protections of FM must prove:

• Event in question caused the

inability to perform

• Event in question is a “force

majeure” event, under the specific language in the contract

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Extra-Contractual Defenses

8

• Frustration of purpose
• Impossibility or impracticability of

performance

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“Handshake” Agreements

9

Under the statute of frauds, certain contracts must be in writing to be enforceable:

• To be performed in a period exceeding one year
• Guarantees of the debts of another
• Certain sale of goods over $500
• Sales of an interest in real estate

Maximizing Insurance Recovery for COVID-19 Losses

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Potential Coverage

11

Lost income for business interruption

• Sometimes called “business

income with extra expense” or “time element” coverage

• Often requires “direct physical

loss or damage” to covered property

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Potential Coverage, cont.

12

“Contingent” business interruption coverage

• Covers BI losses resulting

from physical loss or damage to your customers or suppliers

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Potential Coverage, cont.

13

Civil Authority

• Covers losses if your operations

are impaired by a government

• rder

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Potential Coverage, cont.

14

Supply chain coverage

• Similar to contingent BI coverage
• Does not require direct physical loss or

damage

• Broader protections against supply

chain disruptions

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Possible Responses from Insurance Carriers

15

• Accept the “tender,” and

pay claim

• Accept the “tender,” and

issue a reservation of rights

• Deny the “tender”

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Possible Responses from Insurance Carriers, cont.

16

Possible grounds for denial:

• Argument that viral contamination is not a “direct physical

loss or damage” to covered property

• Exclusions for “fungus,” “virus,” “pathogen,” “biological

agents,” “communicable disease,” “infestation” or “disease”

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Best Practices

17

• Obtain a complete copy of your policy
• Document, document, document!
• Work with a skilled professional to

prepare a claim

• Watch time restrictions
• Prepare for the long haul

Producing and Selling Wine in COVID-19 Times

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Market Trends

19

Source: WineBusiness.com (last accessed on April 7, 2020)

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Production

20

• Wine-making facilities are

“essential” under “Stay Home, Stay Healthy” Order

• Tasting rooms closed, for
• n-premises tastings

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“To Go,” Curbside Service and Delivery

21

• “To Go”: May sell manufacturer-

sealed bottles “to go” from your tasting room

• Curbside Service: Request

permission for curbside service through Added Activities form

• Delivery: Permissible, with

submission of Added Activities form

(Photo source: Courier Post Online)

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Liquor License Renewals

22

• Required, if premises is
• perational
• Temporarily not required, if

premises is closed

• Late renewal fees waived through

April 17, 2020

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Taxes, Fees and Penalties

23

• Must timely submit sales reports
• Late penalties waived

(February 29, 2020 – April 22, 2020)

• Request for penalty waiver:

beerwinetaxes@lcb.wa.gov

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Product Returns

24

• Distributors allowed to accept

returns of beer/MB, and to provide credits or refunds

• Effective through April 17, 2020
• Wine and spirits not eligible for

returns

SEATTLE PORTLAND WASHINGTON, D.C. NEW YORK SPOKANE BEIJING

Em ily Harris Gant

Principal, Seattle emily.gant@foster.com

206.816.1454

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SEATTLE PORTLAND WASHINGTON, D.C. NEW YORK SPOKANE BEIJING