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The Corporation Behind Your Favorite Vineyard

Despite the gnashing of teeth and tearing of hair by liberals and conservatives alike, the world is becoming globalized. And what this really means is that more and more aspects of everyone's lives are operating according to market forces and dynamics. Among other thing, this has meant changes in the wine industry -- many of which have been good for wine lovers everywhere -- not the least of which has been the increased access to many wines that heretofore have been impossible to get.

Of course there's a downside as well, though I don't think so much of one as a lot of people like to imagine. I don't know if there's a word for what I am, but I am certainly a believer in progress and change: a lot of it's gonna happen whether we like it or not.

Which is pretty much how I feel about learning how many of the worlds top vineyard sites are increasingly owned by corporations. Adam Feil writes a very interesting article this week on Jancis Robinson's web site about the business of vineyard investment on a grand scale. Some of you may know that financial services giant AXA owns several major Châteaux including Pichon Longueville in Bordeaux, but there are dozens of other companies, many of them very large on the hunt for bargains in the wine world, of which, these days, there are many.

Regardless of how you feel about such a turn in global economics, the article is an enlightening one.

Check it out.

Comments (4)

Bertrand wrote:
12.30.06 at 6:33 AM

While AXA wine ventures are interesting, they are quite anecdotic (less than a dozen wineries) compared with Stimson Lane Vineyards & Estates, owned by US Tobacco, who make two thirds of Washington State's wine production. See this Wine Business article here :

Saint_Vini wrote:
12.30.06 at 9:44 PM

That article was hardly worthy of an average blog posting, let alone a site like Jancis'. Good Lord, what a hodge-podge of info! Was there any real point? Yes, some big companies are invested in vineyards (Coca-Cola was once in California in a big way and now they're not, so what?), returns in Burgundy are 5% (big deal), land in Chile is cheaper....what's the point of this again? Do any of these facts relate in a coherent way?

Jess Jackson owns tens of thousands of California acres, why not include him? Fred Franzia? Gallo? Answer: he didn't include them because he only included the "easy" facts he cut and pasted from the web....

The "average" value in Napa is hardly $180k, that's above average. Include the likes of Chiles Valley and Carneros and the average is much, much lower. Further, the difference between $180 for vineyards and land down to $90k for just the land implies that the vineyard improvements are $90k per acre?!?! It takes about $35,000 per acre to plant in Napa and vineyards generally *depreciate* in value as they have to be replanted every 20-30 years. Some flawed math there.

I'd also like to see a source for the 12% gains in Napa since 1967.....? I suspect that was taken from the website of a real estate broker.

Many other comments, but frankly, I don't think the article worthy of further disection.

Final point on corporations "controlling" the wine industry. The largest global player, Constellation (or maybe now Foster's?) controls, on a worldwide basis, less than 10% of global revenues......think about that and compare it to software, autos, soft drinks, beer, etc. No need to worry folks, evil "corporations" aren't coming for your cult Pinots any time soon.


Bertrand wrote:
12.31.06 at 1:20 AM

There's always been people from the non-wine world investing in wineries. Some do it for prestige and image and making money from the investment is fine but not primordial. What makes a difference is when the motive is short-term profitability and when shareholders' pressure ask for quick returns.

allie wrote:
01.03.07 at 9:31 PM

I always worry about whether an individual/family or a large conglomerate is running a vineyard. But, I guess what really matters is if someone who cares is in charge - and looking to bring the best quality product to market.

That said, I really enjoy finding wines (recommended) like the Rubicon from Neibaum-Coppola. Here's a winery that isn't owned by a large corporation, but with a wine that demonstrates what vinters who care can produce.

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