Wine Vision Global Exporting

1. I can’t make money exporting.
It is important to recognize that you will have to make some initial investments in order to market and export your wines internationally, but the financial rewards more than often compensate for these expenditures. It is uncommon in exporting to find higher margins but many US wineries have already increased sales and profits through exporting.

2. I’m not sure how to change my labels, learn international rules and certifications, and deal with paperwork issues.
There are any helpful organizations that will assist you in dealing with international export rules, paperwork, and label changes. One of the most useful websites is WineScience.com. You may also want to contact the California Export Program for assistance or work closely with an importer or freight-forwarder that can help guide you through any paperwork and label issues. Keep in mind that shipping wine internationally is not much more complicated than shipping wine across interstate lines in the United States.

3. How do I deal with the language and cultural barriers?
English is widely spoken by many of the buyers in key export markets. A translator may be found by directly contacting the overseas offices of the governmental and trade resources listed in the back of this brochure but is rarely necessary. Your first steps to overcoming potential cultural barriers simply involves a search on the Internet or visit to your local bookstore. Many of the aforementioned governmental organizations have also prepared various pamphlets on the do's and don’ts of these markets. Other good sources include local Embassies and Consulates.

4. I’m selling all my wine domestically, so why should I spend extra time, money, and stress trying to sell internationally?
This is a very valid question and the answer has to do with long-term strategic thinking. By beginning an export program now, you will be more strategically positioned for the future and will be able to ride the highs and lows of any economic shift in the US. Furthermore, we have entered an era of global marketing. In order to stay competitive you need to shift your mindset to encompass the whole world as your market, not just the US. By exporting, you increase the attraction of your business for purchase by a large global drinks conglomerate. Don’t put all your eggs in one basket. Think strategically and globally NOW!

5. I’m willing to export but I don’t know how to get started.
This website has many helpful links in getting started. Also consider registering to attend one of the upcoming training classes/seminars described in Training & Seminars on this website.

6. How do I find a reliable importer to work with?
One of the objectives of the California Export Program (CEP) is to assist wineries in finding an importer, agent, or marketing partner in major export markets. This assistance takes several forms:

Opportunities to participate in wine tastings and trade shows in all major export markets.
Trade visits to California where media and retailers from key countries visit wineries to familiarize themselves with our wine regions and diversity of fine wines.
Direct communication with CEP offices in the U.K., Canada, Europe, Japan, Taiwan, Hong Kong, China, & Singapore.
Importer lists with contact information. These lists are located on the CEP website (Calwinexport.com). Additionally you may wish to contact the Foreign Agricultural Service (Fas.usda.gov) and the California State Department of Agriculture (Cdfa.ca.gov).

7. Do you need a license to export wine?
No, only exports of a sensitive nature require a license to export. Products include high technology, encryption and sensitive government supplies, etc.

8. Should you have international contracts?
It depends. It is very difficult if not impossible to hold companies to a contract since there is no international law to hold them to. However, it is important to have some agreement to the terms of sales of your wines, whether it is reaching a sales goal, a distribution goal, etc. It is important to have clear communication with your importer.

9. How will you identify potential buyer representatives in your target market?
Foreign buyer lists obtained through wine organizations or government sources, direct research in the country, and trade shows. Other options include: direct mailings, USDA buyer alert announcement and US supplier lists, advertisement on the internet, advertising in international trade journals, local publications in your target market, trade missions, trade shows and exhibits, agent and distributor services,

10. What needs to change in your company to create optimal support of its export marketing and sales efforts?
A company may need to hire a new employee or train a member of the staff to work on international markets part time.

11. What terms do I need to be familiar with when involved with international trade?
Click here for a glossary of terms that will come in handy when dealing with certain documents and understanding what they are used for.

12. What are incoterms?
Incoterms were developed as a language to negotiate the terms of sale using a few letters. It is important to understand what costs are to be covered by the buyer or the seller. Most wine shipments tend to be ex-cellar or works, but sometimes FOB (free on board) which indicates the winery is responsible for getting the goods to the dock and loaded onto the ship.
Click here for additional information on icoterms.

13. What is a Schedule B number?
Refers to Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States. All commodities exported from the United States must be assigned a seven-digit Schedule B number. Click here for Schedule B numbers.

14. Do I have to pay US taxes for wine I sell overseas?
No, you do not have to pay taxes on wine exported. However, all wine must be shipped with a completed 5100 form from your winery or warehouse which will need to be returned promptly (within 90 days) with an approved signature proving the wines were indeed exported. If a 5100 form is not signed promptly, a proof of export will be required for each order shipped. This proof of export can be in the form of an ocean/air bill of lading and/or a signed certificate of receipt from the importer verifying the wine was exported. Ultimately if the wine exported does not have sufficient documentation completed in a timely manner, tax will need to be paid on the wine. If wine is shipped tax paid, a drawback form will need to be completed for each order (if you would like to recover the tax from the TTB.) This process can be time consuming and usually involves a waiting time to get your check/credit. Consult your CFO for details regarding the tax advantages of exporting. Different forms and rules apply for exporting bulk wines.

The 5100 form can be found Department of Treasury: Form 5100
The tax drawback format can be found at Department of Treasury: Form 512024 and Department of Treasury: Form 512020

15. What steps should I take to guarantee I will get paid when shipping wine to overseas customers for the first time?
Several methods of payment can be used: cash in advance, 50% payment in advance, letter of credit (expensive), terms of 30, 60 or 90 or 120 days. Alternatives are to ask for customer references and bank references to satisfy your company policies. A company policy should exist for all new international customers.

16. Does the term "RESERVE" on my wine labels cause a problem when shipping overseas? Do I have to change my labels?
“Reserve” is not an allowable term for wine labels in the European Union. (See EU label requirements.) These labels will need to be changed or the alternative is to focus on non-Reserve labeled wines. Strip labeling can be an option, but rarely looks presentable. Always send all labels (front and back) for review and approval to your importer prior to the first shipment. It is important to understand the label requirements of a country in advance. Clear communication with your importer is vital to the success of your wine in the international market place.

17. What does the new bioterrorism act mean for my winery?
View the Wine Institute on Bioterrorism article.

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