iN VIDEO: Nearly 25% of Okanagan wineries are listed for sale
Devastating winter vine kills are just part of the reason why more than 50 wineries are for sale in the Okanagan – about one-quarter of the total number.
Paul Graydon sold his Saxon Winery vineyard in 2021 and moved from making wine to specialize in selling wineries last year as OKwineguys/Royal LePage.
His site lists 31 wineries for sale. Some are his firm’s own listings but many are on the Multiple Listing Service through other agencies, but it's only a partial list.
“There are other wineries for sale,” Graydon told iNFOnews.ca, noting about half the sellers who contact him want to be unlisted. “Many are reluctant to give up their name to anybody.”
OKwineguys have been in business for a year now and have seen the number of listings steadily grow month by month.
Part of that is simply due to the fact the firm is now active in the marketplace but there are half-a-dozen market influences that have contributed to the increase of winery owners wanting to sell.
Only one of those reasons is last winter’s cold that killed close to half the vines – a situation that is likely to be exacerbated after this past weekend’s extended deep cold snap.
“The general trend is downwards in the consumption of wine and beer so the pie is shrinking,” Graydon said.
Then there's the high price of Okanagan VQA wines.
“It comes back to market shift,” Graydon said. “Ultra-premium and premium products are less popular than they used to be and the average age of drinkers is going down. They’re willing to pay $15 a bottle but not $25 to $50 and that’s one of the issues. The market we were in is a difficult market.”
The shortage and high cost of labour are significant contributing factors.
Last summer’s wildfires and the provincial government’s orders for tourists to stay away from the Okanagan hit wineries hard since about 50% of farm gate sales happen from July through September.
“Banks are typically not willing to invest in wineries. They’re scared,” Graydon said. “I think they can see too many wineries going under or struggling to make their payments so any winery owner who wants to borrow money or currently carries a mortgage – most wineries have mortgages – are paying double, triple the rate. So that’s hurting the wineries. Cash flow is an issue.”
Those may all be good reasons for winery owners to want to sell but they are also reasons why some have remained on the market for years.
“Generally speaking, buyers are reluctant to come into the market,” Graydon said. “Buyers quote to me things like: ‘I’m looking for a profitable winery that’s desperate to sell.’ Hold on. You said profitable winery, desperate to sell? Why would you be desperate to sell if you’re profitable, number one? And you find me a profitable winery, period.
“You see profits on balance sheets and profit and loss statements but sometimes it’s not really accurate because the owners are not taking a salary."
READ MORE: Okanagan wine industry will take half a decade to fully recover: Wine Growers
Many of the Okanagan wineries are estate wineries, which means they have to grow most of their grapes on site. But there are also separate vineyards that contract to wineries to grow grapes.
They may have a marketable property if they're only selling a vineyard, which despite the recent winter damage to plants, is still on viable farmland.
The problem is many come with houses.
“Typically buyers looking at vineyards don’t want to acquire a large house,” Graydon said. “Many investors in the last 25 years bought the house with a vineyard because they loved the house. Many are luxury accommodations but many buyers don’t want the house. They just want the vines. They say: ‘I’ve already got a house. I’m on a winery with an estate. I don’t want another house.’”
That doesn’t mean that all wineries for sale are those who are desperate, especially in light of recent weather impacts, since some have been for sale for years, long before last winter’s killing cold.
See the OKwineguys listings here.
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