Falling grape sales and one-off charges have led to annual profits at Californian wine producer Scheid Vineyards falling to a quarter of those in 2005.

Scheid, which sells most of its grapes to other wineries, said yesterday (14 March) that net income reached US$1.1m in 2006, compared to profits of US$4.4m last year.

CFO Mike Thomsen said that, although bulk wine revenues had risen by 45% on 2005 levels, grape sales had fallen by 25% on the year. Group revenues dipped 3.5% to US$30.1m.

Thomsen added: "The profit results for the 2006 period included the costs of the settlement of a lawsuit in the amount of $1m, and $1.3m of additional interest expense as the result of additional borrowings used to finance the construction of the company's winery."

President and CEO Scott Scheid said the company is looking to expand its winery to 30,000 tons of crush capacity in time for the 2007 harvest.