Drink Different – Why “Terms of Payment” Are Not What You Think in the Wine Industry
Why “Terms of Payment” Are Not What You Think in the Wine Industry
There’s an old joke in our trade: How do you make a small fortune in the wine industry? Start with a large fortune.
It usually gets a laugh. It shouldn’t. Because behind the joke sits a quiet mechanism that most people outside the industry and plenty inside it have never examined properly: what “30-day payment terms” actually mean when you supply a major retailer.
Spoiler: they don’t mean 30 days.
The statement date trick
Let me walk you through it, using our own experience with one of South Africa’s large retail chains. I won’t name them. The mechanics matter more than the name, and frankly, they’re not unique.
On paper, the terms are standard: payment 30 days from statement. Same as most retailers, same as most suppliers. Fair enough.
But here’s the move. The retailer sets its statement date to the 25th of the month and places the majority of its orders on that date.
Think about what that does. An order placed on 25 June is, in the normal world, a June order. It should be paid at the end of July. But in the retailer’s world, it lands after their statement date of the 25th, so it rolls onto the next statement — and becomes payable at the end of August.
Just like that, 30-day terms become 60 days. Not through negotiation. Not through a contract amendment. Through a calendar.
And if that were all, fine
If it stopped there, you’d grit your teeth and build it into your cash flow. But it doesn’t stop there.
When payment finally arrives, it comes with deductions, promotions, marketing contributions, and charges you may not have known about until they appeared as subtractions on your remittance.
And if there’s any discrepancy on an invoice? It goes “on review.” Which is retailer language for: we don’t know when we’ll pay you, and neither do you.
A price increase, a typo, and 90 days
Here’s a real example. In March, like most of the industry, we put through a price increase. We notified everyone we were supposed to: the admin team, the buyer, and the lot. But the person raising the purchase orders used the old prices by mistake.
Their mistake, not ours. Every email is on record.
What followed was a masterclass in structural non-accountability. The department that handles invoices doesn’t handle purchase orders. The department that handles purchase orders doesn’t talk to the one that handles invoices. If the two documents don’t line up, nobody pays you — and each department refers you, politely and endlessly, to the other.
We could trace every piece of correspondence. We had made no error at any point. It didn’t matter. In the end, I, the owner, had to get personally involved and raise the prospect of legal action before anyone responded. The invoices were eventually paid 90 days late.
The part nobody says out loud
Here’s the bind every small producer knows: while all of this is happening, the orders keep coming. So what do you do? Suspend the account? Congratulations, you’ve just made yourself irrelevant to a major channel. Push back too hard, and you risk being delisted. So you carry it. Quietly. That’s the deal, even though it was never the deal.
And one more thing, to complete the picture: some of the wine we’re supplying was made and paid for years before the order was placed. Vineyards don’t run on 65-day terms. Barrels don’t either. We fund the fruit, the ferment, the bottling and the waiting, and then we fund the retailer’s working capital on top of it.
Why we’re telling you this
Let’s be honest: we can’t absorb a 90-day knock. Nobody our size can. So when the payment doesn’t arrive, we’re forced to do the very thing we resent, we stretch our own suppliers. The glass supplier waits. The label printer waits. The freight company waits. One retailer’s admin failure doesn’t stay one problem; it multiplies down the chain, and everyone below us in the food chain carries a piece of someone else’s mistake.
Now picture the winemaker just starting out, someone who has bet everything on a superb product, with a family depending on the outcome. For them, “30-day terms” that quietly become 90 aren’t an irritation. They’re existential.
We believe in this industry. We believe in the people in it. And we believe the only way these mechanics change is if suppliers stop treating them as a shameful secret and start describing them plainly, in public, without drama.
So that’s what this is. Not a complaint, a description. If you’re a producer nodding along, know you’re not alone or incompetent; the system works exactly as designed, just not for you. If you’re a retailer reading this, you know who you are, and you know the fix costs you nothing but a calendar entry and a phone call between two of your own departments.
Drink different. Live loudly. And read the fine print on “30 days.”
Cheers, Kevin