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October 2016 WINES&VINES 15 WINE INDUSTRY NEWS TOP STORY TSG Partners Equity Firm Buys Duckhorn Wine Co. S acramento, Calif.—Gov. Jerry Brown signed AB 1066 into law Sept. 12, ending a lengthy legislative battle to put farm worker overtime pay on par with that of employees in other industries. When fully in effect, the measure will require overtime pay after an eight-hour workday or a 40-hour week, vs. the current 10-hour day or 60 hours per week. The changes allow grapegrowers and other farming businesses an adjustment period, with a four-year phase-in beginning in 2019. Busi- nesses employing 25 or fewer farm workers will have an additional three years to comply. Since a 2015 report from California Employ- ment Development Department's Labor Market Information Division counted 423,780 agricul- ture workers in the state, the issue is large in scope. The United Farm Workers (UFW) vigor- ously supported the measure, which spent two years being reworked and revised in the Cali- fornia state legislature. The UFW planned cel- ebrations at offices around the state. A UFW statement said the new law corrects 78 years of discrimination against farm workers and sets an example for other states. While the governor's signature was still pending, U.S. Labor Secretary Thomas Perez applauded its passage and urged Gov. Brown to sign. He said that the farm workers who feed the nation should make enough to pay for their own meals, and added that the long lead time would not break the bank for employers. In an email to Wines & Vines, state senate candidate and former assemblywoman Mariko Yamada of Davis, Calif., was jubilant. "For nearly 80 years, farm labor has been valued differently than other work in our great state. AB 1066 addresses this inequity in a thoughtful and incremental way." Grapegrowers express concern Every debate has at least two sides, but not everyone is forthcoming with their opinion. Several vineyard management companies failed to return our calls, and one explicitly declined to comment. Dana Merrill, however, agreed to share his experience and point of view. Merrill owns Mesa Vineyard Management, which oversees several thousand acres of vines on California's Central Coast and employs several hundred workers. Just prior to the announcement, he said bluntly, "I hope it isn't signed." In an industry where labor availability is a growing concern, Merrill's main objection is that the new law will reduce flexibility for both growers and the workforce in scheduling a work week. He pointed out that agricultural work is seasonal and subject to the whims of weather: Sometimes there is no work, on other days, there is too much, creating competitive demand. During busy times in a given region, growers must compete for skilled labor. Some workers drive a long way to work in remote vineyards, he pointed out, and once they are on site, they'd rather keep working. The new law is uncreative; establishing a 48- hour workweek might have better suited ag's special needs, he said. Merrill acknowledged that vineyard labor requires trained workers and recommended that more wineries and vineyard owners con- sider transitioning to mechanization—not just for harvesting but for pruning and other spe- cialized tasks. "It's hard to get trained labor," he said, add- ing that labor accounts for some 60% of vine- yard budgets. With minimum wage slowly increasing, "We've got to rethink how we're doing things," Merrill said. Although he termed the new law largely sym- bolic, "Farm workers have to live with it, and farmers do too. People will get shorter workdays and workweeks and go thru a lot of hoops for the same amount of money. It will nudge us to more mechanization," Merrill concluded. To read the text of AB 1066, visit leginfo. legislature.ca.gov. —Jane Firstenfeld S t. Helena, Calif.—TSG Consumer Partners acquired Duckhorn Wine Co. from investment firm GI Part- ners. Financial terms of the transac- tion were not disclosed. TSG is a $5 billion San Francisco-based stra- tegic equity investor in consumer brands in the food, beverage, household, personal care, ap- parel and e-commerce sectors. Its past and pres- ent investments include Pabst Blue Ribbon, Arrowhead Mills, vitaminwater, thinkThin, pop- chips, Muscle Milk, Stumptown, Planet Fitness, Revolve, Paige, Smashbox Cosmetics, Pureology, Sexy Hair, e.l.f. cosmetics and IT Cosmetics. Prior to the announcement, rumors swirled that Constellation Brands would acquire the wine company, but Duckhorn president and CEO Alex Ryan vigorously denied that it was for sale. The transaction includes all six Duckhorn Wine Co. brands—Duckhorn Vineyards, Gold- eneye, Paraduxx, Migration, Decoy and Can- vasback—and their corresponding properties. The properties include more than 600 acres of estate vineyards, including the legendary Three Palms Vineyard in Napa Valley. All employees are being retained, including the winemakers for all six wineries and CEO Ryan, who has been with Duckhorn since 1988. Co-founders Dan and Margaret Duckhorn also will remain involved. Duckhorn championed Merlot The Duckhorns created the company in 1976 with other small investors. Dan Duckhorn toured Pomerol and Saint-Émilion in the Bor- deaux region in the mid-1970s with Ric For- man—then winemaker of Sterling Vineyards, which claims it produced the first vintage- dated Merlot wine in California (Louis M. Martini also was a pioneer)—and noted that Merlot was more widely planted than Caber- net in Bordeaux. Duckhorn and his wife Margaret founded Duckhorn Vineyards in 1976. Their first vin- tage was in 1978, when they made 800 cases each of their first Napa Valley Cabernet Sauvi- gnon and Merlot. Vineyard workers install stakes for new plantings in California, where new overtime laws for agriculture will be phased in starting in 2019. TOP STORY California Farm Workers Win Overtime Battle