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Buying a Winery Business vs. Winery Real Estate: Deal Structures

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Buying a winery business means buying the operation, either its assets (brand, wine inventory, equipment, contracts and goodwill) or the company that owns them, while buying winery real estate means buying the land, vineyard and buildings, with or without the business that runs there. Many deals combine the two, but the structure you choose decides what you inherit, how the price is allocated for tax, whether the property is reassessed and which licenses and contracts have to be replaced or transferred. Settle the structure in the letter of intent, before due diligence starts.

In Napa and Sonoma, a winery is often three things under one roof: real property with a use permit, a licensed production business, and a brand with inventory and customers. Each can be sold separately. This guide compares the main structures, explains California’s bulk sale rules and the tax points that differ between them, and covers inventory, brand and grape contracts. The licensing steps themselves are in our winery license transfer guide, so this page only notes where they connect.

What’s actually for sale in a winery deal

Component	What it includes	How it usually moves
Real property	Land, planted vineyard, winery building, caves, residence, wells and wastewater systems	Grant deed through a real estate escrow
Land-use approvals	County winery use permit and its conditions of approval	With the property, subject to county rules
Equipment	Tanks, presses, barrels, bottling line, lab and vineyard equipment	Bill of sale, or stays in the entity
Wine inventory	Bulk wine in tank and barrel, bottled and cased goods, library wine	Bill of sale with a count and price adjustment, or stays in the entity
Brand and intangibles	Brand name and any trademark registrations, labels, website and domain, wine club and customer lists	Written assignment, or stays in the entity
Contracts	Grape purchase agreements, vineyard leases, custom crush, distribution, equipment leases	Assignment, often needing the other side’s consent
Federal and state licenses	TTB basic permit and bonded winery registration, ABC Type 02 license	Separate federal and state filings; see our license transfer guide

Knowing which pieces you want comes first. A buyer launching its own label may want only the real estate and equipment; a buyer who wants an established brand may not need the land at all.

Asset purchase or entity purchase

In an asset purchase, a new buyer entity acquires listed assets and assumes only listed liabilities. In an entity purchase, the buyer acquires the stock or membership interests of the company that owns the winery, and the company keeps everything it already has, including its history.

Question	Asset purchase	Entity purchase
Liabilities	Buyer takes only what the contract assigns, though bulk sale and license-escrow rules protect some creditors	Known and unknown liabilities stay with the company the buyer now owns
Property tax	A deed to the buyer is a change in ownership and the property is reassessed	Not a change in ownership unless someone obtains control, more than 50%, which triggers reassessment and a BOE-100-B filing within 90 days
Federal permit	Treated by TTB as a change in proprietorship	Treated by TTB as a change in control
Contracts	Each must be assigned; check consent clauses	Stay with the company, but check change-of-control clauses
Price allocation for tax	Section 1060 allocation among the assets	Depends on the entity type and any tax elections; ask your CPA

The federal filing differences are explained in the license transfer guide linked above, under change in proprietorship and change in control. Whichever path you take, a selling or buying entity’s attorney should draft the purchase agreement; a real estate purchase form alone isn’t built for a business sale.

Five common deal structures

Real estate only. The buyer acquires the land, vineyard and facility, and the seller keeps or winds down its brand. Simplest to paper, but the buyer needs its own permits and licenses before producing, and the county use permit’s limits still apply.
Whole winery, asset purchase. Real property plus equipment, inventory, brand and assigned contracts in one transaction, usually with a real estate escrow and an ABC license escrow running side by side.
Entity purchase. The buyer acquires the company. Fewer assignments, but deeper diligence on liabilities, tax returns and compliance history.
Brand-only sale. The buyer acquires the brand, inventory and customer relationships, and production moves to the buyer’s own facility or a host winery; see custom crush and alternating proprietorships.
Split real estate and operation. One party owns the property and leases it to the operating winery, sometimes created at closing as a sale-leaseback; see our guide to sale-leasebacks.

Our winery valuation guide explains why the same property can be priced very differently depending on which of these structures the buyer has in mind.

California’s bulk sale law still applies

California still has a bulk sales law: Division 6 of the Commercial Code. Section 6102 defines a bulk sale as a sale, outside the ordinary course of business, of more than half of the seller’s inventory and equipment, measured by fair market value on the date of the bulk-sale agreement.

Section 6103 limits it to sellers located in California whose principal business is the sale of inventory from stock, “including those who manufacture what they sell,” or restaurants, so ask your attorney whether a particular winery fits. It also excludes, among others:

Sales of assets worth less than $10,000 net of liens, or more than $5,000,000 on the date of the agreement.
Transfers subject to and complying with the alcoholic beverage license transfer article (Article 5, beginning with section 24070, of Chapter 6 of Division 9 of the Business and Professions Code), if the buyer also records and publishes notice, in the manner section 6105 sets out, at least 12 business days before the transfer is completed.
Sales by executors, receivers, bankruptcy trustees and others under judicial process, and certain sale-leasebacks of personal property.

For a bulk sale where the consideration is $2,000,000 or less and substantially all cash, section 6106.2 requires the buyer, or the escrow agent, to pay the seller’s debts from the cash to claimants who file on time. If the seller disputes a claim, the buyer or escrow agent withholds 125% of the first $7,500 of that claim plus the full amount above $7,500, and must pay undisputed claims or file an interpleader within 45 days after the buyer takes title to any of the goods. Build those dates into the closing schedule.

Inventory: the line item that moves the price

Wine inventory can be worth more than the equipment and is the hardest asset to value. Agree in the letter of intent on:

What’s included: bulk wine by vintage and varietal, bottled and cased goods, library wine, and dry goods such as glass, corks and labels.
How it’s priced: a fixed amount, cost, or a schedule per gallon or per case, and whether the price changes if the closing count differs.
When it’s counted: a physical count close to closing, with both sides present.
Quality: lab analysis on bulk lots and, for vintages exposed to wildfire smoke, testing; see wildfire smoke taint.
Excise tax and bond status: ask the alcohol beverage attorney how wine held in bond moves to the buyer and who owes any tax on it.

Brand, labels and grape contracts

A brand is only worth paying for if the seller can prove it owns it. Ask for any trademark registrations, the chain of title to the name and logo, label approvals, the domain and website accounts, and the club and customer lists, and have counsel assign each in writing. Labels tie into the license work: a change in the bottler named on the label can require new label approvals, as our license guide explains. If the brand makes estate or appellation claims, check that the buyer’s grape sources will still support them; see estate bottled requirements.

Grape purchase agreements are often the real value of a brand that doesn’t own vineyards. Read each for its term, price formula, assignment and change-of-control clauses, and the grower’s right to terminate. Our guide to grape purchase agreements covers the terms. On the selling side, a vineyard with long-term contracts may be easier to price, as our vineyard valuation guide discusses.

Price allocation and property tax

In an asset purchase of a trade or business, Internal Revenue Code section 1060 requires the price to be allocated among the assets in the same manner as section 338(b)(5), and if the buyer and seller agree in writing on the allocation, the agreement binds both of them. The split between land, buildings, equipment, inventory and intangibles affects both sides’ taxes, so negotiate it with your CPAs rather than leaving it to closing.

For property tax, Revenue and Taxation Code section 64 says buying interests in an entity generally isn’t a transfer of the entity’s real property, but obtaining control, more than 50% of a corporation’s voting stock or a majority interest in an LLC or partnership, is a change in ownership of the property it owns. The Board of Equalization says the entity must file form BOE-100-B with the BOE within 90 days of a change in control or face penalties. Section 64(d) adds a second trigger worth asking about: if the property went into the entity in a transfer that was excluded from reassessment, a cumulative transfer of more than 50% of the original co-owners’ interests is also a change in ownership.

Who leads the deal

California’s Real Estate Law defines a “business opportunity” as including the sale or lease of the business and goodwill of an existing business enterprise or opportunity (Business and Professions Code section 10030). A real estate broker who knows wineries can value the property, market it, find buyers through the right channels and run the real estate escrow; larger company sales often add an M&A adviser or investment banker.

Either way, the deal needs an attorney experienced in winery acquisitions, a CPA for the allocation and tax structure, and an alcohol beverage attorney for TTB and ABC. Diamond may refer you to partners we work with; you’re free to choose any provider.

Letter of intent: structure, price and allocation approach, inventory method, contracts to assign, approvals needed.
Due diligence: use our winery due diligence checklist, and read the county permit; see Napa winery use permits or Sonoma County winery use permits.
Purchase agreement: representations, indemnities, inventory count and adjustment, and conditions for licenses and consents.
Parallel filings: license escrow and notices, bulk sale notice if it applies, federal applications.
Closing: coordinate the real estate escrow, the license escrow and the inventory count, then file BOE-100-B if control changed.

Questions people ask

Is it better to buy a winery’s assets or its company?

It depends on liabilities, contracts and tax. An asset purchase limits what you inherit but needs more assignments and triggers reassessment; an entity purchase keeps contracts in place but brings the company’s history with it. Your attorney and CPA should model both.

Does buying a winery LLC avoid property tax reassessment?

Not if you obtain control. Under Revenue and Taxation Code section 64, acquiring a majority interest in an LLC is a change in ownership of its real property, and the entity must file BOE-100-B within 90 days.

Has California repealed its bulk sales law?

No. Division 6 of the Commercial Code still applies to sales of more than half of a covered seller’s inventory and equipment, with exclusions such as asset values over $5,000,000 and license transfers that comply with the ABC transfer article plus recorded and published notice.

Can I buy just a wine brand without the winery?

Yes. A brand-only purchase usually covers the name, labels, inventory and customer lists, and the buyer makes the wine at its own facility or under a custom crush arrangement, with its own federal permit and state license.

How is wine inventory priced in a winery sale?

By agreement: a fixed price, cost, or a per-gallon or per-case schedule, with a physical count near closing and a price adjustment if the count differs. Lab testing of bulk wine is common.

Do grape contracts transfer when a winery sells?

Only as the contract allows. In an asset sale each contract has to be assigned, often with the grower’s consent; in an entity sale the contract stays with the company, but a change-of-control clause can still give the grower rights.

Who handles a winery business sale, a real estate broker or an M&A firm?

Both can. California’s Real Estate Law covers business opportunity sales, and a broker who knows wineries usually leads property-heavy deals, while large company sales often add an M&A adviser. Attorneys and CPAs are needed in either case.

If you’re weighing an operating winery, a winery property or a brand, we can help you sort out which structure fits before you make an offer, and coordinate the property side with your attorney and CPA. Owners preparing to exit can start with selling a vineyard or winery, and buyers with our vineyard and winery services. This is general information, not legal or tax advice; talk to a California business attorney or CPA about your situation.

Sources & notes

Last reviewed October 2026 by Matthew Martinez.