Napa winery returns Covid-19 support loan

Dario Sattui, the owner of Castello di Amorosa near Calistoga, has returned a US$1.2 million Covid-19 relief loan from the government.

Image: Castello di Amorosa

As reported by the San Francisco Chronicle, Sattui said it was “guilt” and his “conscience” that made him return the money.

Sattui, who is also the majority owner of V. Sattui Winery in St Helena, told the publication that he felt taking the money would be “the wrong thing to do”.

“There’s a lot of small businesses that are going to go under if they don’t get help, and we can survive without this,” he said.

Castello di Amorosa employs 135 members of staff. Sattui said he has spent around $100,000 of the company’s reserves in order to maintain workers’ salaries.

Tom Davies, president of V. Sattui, did not apply for the federal loan for the winery’s 150 employees.

The Paycheck Protection Program (PPP) is part of the US government’s $2 trillion Coronavirus Aid, Relief, and Economic Security, or ‘CARES Act’, the third Covid-19 related emergency bill approved by congress on 27 March.

The initial round of PPP amounted to $349 billion, which lasted less than two weeks before businesses were turned away. The scheme was subject to criticism after many larger companies, including Shake Shack, Ruth’s Chris Steak House, and Sweetgreen were able to obtain loans, while others were turned away. These companies have since promised to return the money offered to them.

The US government has now updated its guidelines to further specify who is eligible for the loans, requiring firms to prove that they have no access to additional funds. Companies who do not need the money have until 7 May to return it.

On 24 April, President Trump approved an additional $310 billion for the PPP, which according to reports, is projected to last between four and six days.

Despite having returned the loan, Sattui told the SFC that Covid-19 had greatly impacted sales at both of his wineries, which achieve the majority of their revenue from their wine club and cellar door sales. Neither of the businesses sell to the on- or off-trade, and online sales remain “a small fraction of total sales”.

According to industry association WineAmerica, US wineries can also apply for Economic Injury Disaster Loans (EIDL), which are also part of the CARES Act. Unlike the PPP, however, EIDL loan repayments can not be deferred, but applicants can receive $10,000 in advance which will not need to be repaid.

WineAmerica also published the results of an online survey of winery trade associations last week. 30 responses from associations representing 19 states were collected, with a third of those participating expressing fear that they may not last if the current situation continues “for long”.

Back in March, WineAmerica revealed that US wineries had already lost US$40,439,764 due to Covid-19, but warned that the figure could be far greater as only 10% of the nation’s wineries responded to its information request.