US: Clueless heirs could prompt wine industry shake-up – survey
Over half of western US wineries will transition to new ownership in the next ten years, according to industry research.
SVB Silicon Valley and Scion Advisors said in their report earlier this week that, due to three-quarters of Californian wineries still being controlled by their founders, the industry may see a "ripple effect" as ownership changes hands to the next generation, professional management or a sale to a third-party.
SVB Silicon Valley Bank's wine division founder Rob McMillan said: "This widespread power shift has the potential to disrupt relationships with wine growing boards, distributors, associations and so on. This report is serving as a major wake-up call for the industry."
Scion Advisors founding partner Deborah Steinthal added: "Effective transition planning, whether it's to turn over the business to heirs or to sell to a third party, takes five to ten years. A mere fraction of the owners who plan to retire within ten years have begun any kind of proper preparation at all. The consequences are huge. Ill-advised heirs could be set up for failure, or the owner is likely to be disappointed in the market's value of their life's work."
The survey data showed that 80% of significant stakeholders in these family wine businesses have no knowledge of the senior generation's share-transfer intentions, while over 70% of those planning to transition ownership within ten years reported having done no planning at all.
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