New Market Enforcement Branch Laws For Wineries & Wine Grape Buyers

Newcomers to the field  should be aware that is is illegal to buy winegrapes without a processor’s license from the Market Enforcement Branch of the California Department of Food and Agriculture.

2013 SEES STIFF NEW PENALTIES FOR PROCESSORS

The following comes from the Market Enforcement Branch of the California Department of Food and Agriculture.

With the passage of AB 907, several changes have been made to the Processors Law, Chapter 6, Division 20, of the Food and Agricultural Code that will take effect on January 1, 2013. The following is a brief synopsis of those changes and how it might impact a licensed processor or a new applicant for a license under the Processors Law.

If a processor is found to be financially irresponsible at the time of the renewal of the license, or when a new application for license under the Processors Law has been submitted, the department may require the applicant/licensee to provide an irrevocable guarantee in an amount sufficient to pay for the licensee’s obligations at the time the guarantee is issued. The guarantee may be personal or corporate, a certificate of deposit, a letter of credit, or a surety bond. In addition, this guarantee will not be considered a release from any lien on any processed product purchased from a producer. (Section 55523.3 FAC)

Currently, any licensee or applicant for a license that had been found engaged in a business which demonstrated a lack of financial responsibility, i.e. delinquent accounts payable, judgments of liability, insolvency or bankruptcy; or failed to assure future financial responsibility, was required to provide the department with a surety bond. AB 907 has amended the code to substitute “surety bond” with irrevocable guarantee. (Section 55527.6 FAC)

Existing law requires a person found to be operating a business within the past 5 years without a license or who has failed to pay a license fee pursuant to a certain schedule to pay additional penalties to the department, including paying an amount equal to that portion of the fees that were not paid for the last 5 years the business has operated. The amended provision would increase that penalty amount to 3 times the portion of the fees that were not paid for the last 5 years. (Section 55862.7 FAC)

Lastly, any funds collected pursuant to the provisions regulating processors of farm products will be deposited in the Department of Food and Agriculture Fund in the State Treasury and will be continuously appropriated for the administration and enforcement of those provisions. (Section 55922 FAC)

A copy of AB 907 has been posted on our website (www.cdfa.ca.gov/mkt/meb) under the Food & Agricultural Code tab.

If there are any questions regarding these new changes, please feel free to contact our office at (916) 900-5016 or via email — mktenforce@cdfa.ca.gov