Willamette Valley Vineyards has said that it has entered into a business loan agreement with Umpqua Bank, which provides for maximum borrowings of US$2m for operations.

The new agreement replaced the existing US$2m line of credit the company had with GE Commercial Distribution Finance Corporation.

The borrowings are collateralized by the company's bulk and case goods inventory, and the proceeds from the sales thereof.

Additionally, the company entered into a long-term grape purchase agreement with one of its Willamette Valley wine grape growers whereby the grower agreed to plant 40 acres of Pinot gris and 50 acres of Riesling and the winery agreed to purchase the yield at fixed contract prices through 2015.

The wine grape grower must meet strict quality standards for the wine grapes to be accepted by the winery at time of harvest and delivery.

The company controls approximately 210 acres of principally Pinot noir vines and manages another 60 acres of vines in the Eola Hills. This new long-term grape purchase agreement will increase the company's supply of high quality wine grapes and provide a long-term grape supply, at fixed prices, which meet the winery's gross margin goals, a statement said.