How do I sell a winery in Ontario?

To sell a winery in Ontario, you have to deal with two licensing layers that you should understand before you list. One is federal and covers making wine. The other is provincial and covers selling it, and in Ontario it comes from the Alcohol and Gaming Commission of Ontario, the AGCO. Which steps apply depends on how the deal is built, because the AGCO treats a transfer of a licence and a transfer of shares as separate applications. This guide explains what each regulator says, what to ask them before you agree on a closing date, and how to avoid a gap in your ability to sell wine.

The federal wine licence

The Excise Act, 2001 says no person shall, except in accordance with a wine licence issued to the person, produce or package wine, with exceptions for wine an individual produces or packages for personal use and for bottle-your-own premises. A buyer who will produce wine after closing therefore needs authority under that Act, held in their name or in the name of the company that holds it. The Act sections checked for this guide do not say whether a wine licence can pass to a new owner. Ask the federal officials who issue wine licences what a buyer must file, and whether any steps need to be taken in advance.

The AGCO manufacturer’s licence

The AGCO says a winery licence allows a manufacturer to keep wine with the intent to sell, or sell wine according to the regulations. It publishes how to apply for, change, renew or transfer a manufacturer’s licence to sell. Its application page also lists documents such as floor plans showing the layout of the manufacturing facility and any retail store at the production site, and asks how the applicant plans to sell its products. Ask the AGCO what a buyer must supply, and be ready to share your own floor plans.

Transfer of licence or transfer of shares

The AGCO’s page on managing a manufacturer’s licence says you can transfer your licence to someone else provided the regulatory requirements are met, subject to the approval of the AGCO, and that the person taking over the licence submits the transfer application. Besides the documents an original application needs, it asks for the current holder’s consent to transfer and proof that the purchase of the business has been finalized, and it says it won’t approve a transfer if there is an outstanding monetary penalty or the person taking over isn’t eligible. In its renewal guidance, it also says that if there is a change in ownership, you must report it to the AGCO and submit applicable transfer applications through its online system. Its fee schedule lists a separate application for the transfer of shares in a brewery, distillery or winery licence, and lists a corporate structure change. Which one fits depends on whether the buyer is buying assets or shares, a choice explained in asset sale vs share sale in Canada.

Watch the renewal date

The AGCO says you must apply to renew your licence and submit the right fee before the licence expires, and that when you renew you can select a two-year or four-year term. If your expiry date falls close to the planned closing, decide who will renew and who will pay, and say so in the agreement. A licence that lapses during a sale gives the buyer a problem they did not price. Ask the AGCO how a pending transfer interacts with a renewal that falls due while it is still being reviewed.

Retail and other authorizations on the property

The AGCO’s winery pages describe further authorizations, including endorsements, an off-site winery retail store and a wine boutique sales agent endorsement. Each is a separate item. If your winery operates a retail store or sells through an endorsement, list every authorization you hold and ask the AGCO how each is affected by the sale. Do the same for any municipal or other permits the property depends on. Gather your licence documents, renewal notices and any correspondence with the AGCO into one folder now, so you can answer a buyer’s questions quickly.

Keep production and sales running through the handover

The federal wine licence and the AGCO licence come from different regulators, and nothing in the Excise Act sections or AGCO pages checked for this guide says their approvals arrive on the same day. If they do not, the winery could be able to make wine but not sell it, or the reverse. Ask each regulator whether the buyer may produce or sell in the interim, and under what authority, rather than assuming the answer. If the answer is no, write a clear date into the agreement before which the buyer is not entitled to take over the cellar door or the production floor.

Questions to ask before you set a closing date

• Is the deal an asset sale or a share sale, and which AGCO application matches it?
• What documents and approvals does the AGCO need from the buyer, and how long does it indicate they take?
• What must the buyer file with the federal regulator to produce or package wine, and when?
• Which retail endorsements and stores do you hold, and how does each move to the buyer?
• What does the agreement say about inventory and sales between signing and approval, if the buyer cannot yet sell?