News and Notes from the World of Wine


Million-dollar acquisitions are supposed to be the stuff of the banking and telecommunications industries, not wine. At least that was the prevailing thought up until late August, when out of nowhere Foster's, the Australian megabrewer, announced its friendly takeover of Beringer Wine Estates for a whopping $1.2 billion.

Just a couple of weeks after rumors of a Beringer acquisition of Kendall-Jackson had died down, the Foster's/Beringer deal erupted like Mount Vesuvius. In addition to the $1.2 billion (all dollars are U.S.), based on a $55.75-per-share stock purchase at a time when Beringer's stock was trading at just over $45 a share, Foster's has agreed to assume $319 million in Beringer debt. So in a period of 10 days, Beringer went from potentially eating up a well-diversified competitor to becoming a $1.5-billion meal for a wine-hungry Great White from Down Under.

Foster's already owns the Mildara Blass group, which consists of Aussie labels such as Rothbury Estate, Wolf Blass, Greg Norman, Jamiesons Run and Yarra Ridge. Through Mildara Blass, Foster's this spring purchased mail-order specialist Windsor Vineyards. Beringer, one of the few publicly traded U.S. wine entities, has one of the finest stables of estates in the United States: Beringer Vineyards, Chateau St. Jean, Chateau Souverain, Meridian, Stags' Leap Winery and St. Clement, which was purchased last year from Sapporo of Japan. It also has an import portfolio with brands from Italy, France and Chile.

"This represents a new, very exciting chapter for Beringer Wine Estates, and we are proud to be on the forefront of the globalization of the premium wine industry," said Beringer chairman and CEO Walt Klenz, in a prepared statement.
Under the terms of the deal, Beringer Wine Estates becomes a wholly owned subsidiary of Foster's Brewing Group. Beringer's senior management and organizational structure will not change, which means wine lovers should expect no change in the wines. Winemakers Ed Sbragia of the Beringer label, Robert Brittan of Stags' Leap, David Schlottman of St. Clement, Chuck Ortman of Meridian, Ed Killian at Chateau Souverain, and Steve Reeder of Chateau St. Jean are expected to remain in their current positions.

"For us it's business as usual. Everyone is keeping their jobs," said a Beringer spokeswoman in late August. "The grapes are rolling in for crushing."

Eileen Fredrikson, a partner at the San Francisco wine research and consulting firm of Gomberg, Fredrikson and Associates, called the announcement "surprising, to the extent that we were previously talking about the merger of two very large California wine groups [Beringer and Kendall-Jackson]." She said the price Beringer stockholders will receive is "great," adding that Beringer's institutional investors, those big investment houses that essentially financed Beringer's IPO in 1997, will make out particularly well.

For Foster's, Fredrikson said the Oz brewer is acquiring one of America's best-run wine companies ($439 million in revenues in fiscal 2000), with an established management and winemaking team and tremendous vineyards. Beringer owns or controls more than 10,000 acres in California, 2,000 of which are in the Napa Valley.

Prior to the deal, the majority owner of Beringer Wine Estates was Texas Pacific Group, founded in 1993 and based in Fort Worth. Beringer, which Texas Pacific bought from the Nestlé Corporation in 1996, went public in October 1997, opening at $26 per share.

—Michael Schachner


Industry News
Retail dot-com rivals and have merged—or have they? The combined entity will concentrate efforts on building the domain name, leading to speculation that the deal was a thinly disguised purchase of by the better-funded Company officials have tried to dispel such rumors, citing the fact that investors in both will continue to back the merged group, and company officers are drawn from both businesses: CEO Bill Newlands and president and COO Hank Lambert will retain their positions.

Gristina Vineyards on Long Island's North Fork has a new owner. Vincent Galluccio purchased the 84-acre property and 5,000-case winery from founder Jerry Gristina for a reported $5.2 million. Galluccio is in talks to purchase additional Long Island vineyards and has said he plans to boost production and marketing efforts.

Two new AVAs may be on the map for California. River Junction, in the area around the confluence of the San Joaquin and Stanislaus rivers, would encompass approximately 1,300 acres, most of which is planted to Chardonnay. Alluvial soils and slightly cooler summer temperatures than the rest of the Central Valley form the basis for the proposal. Fair Play, currently part of the El Dorado and Sierra Foothills AVAs, covers 350 acres. Ten wineries lie within the proposed boundaries.

A group of 19 Chablis producers has announced the formation of the Union des Grands Crus de Chablis, with the intent to "promote and protect the greatest vineyards in Chablis." The first president will be Michel Laroche of Domaine Laroche.

A majority of Washington's 155 wineries have become members of the recently formed Washington Wine Quality Alliance. Member wineries agree to meet voluntary quality and labeling standards, including limiting the use of the term "reserve" to small-lot, limited-release wines; using only vitis vinifera grapes from within Washington AVAs; and refraining from the use of potentially misleading geographic terms, such as Chablis or Champagne.

People in the News
Susan Doyle has been named winemaker at Firestone Vineyard in Los Olivos, California. An Australian, Doyle's experience ranges from her homeland to New Zealand to Hartford Court in California.

Headlands Estates Wine Company has announced the hiring of Matt Cookson to serve as winemaker for the company's Grove Street, Wolf Ridge, and Headlands Reserve wines. Cookson was previously at Napa Cellars in Oakville.

Luca D'Attoma has been named to replace Maurizio Castelli as consulting enologist at Tuscany's respected Badia a Coltibuono. D'Attoma worked for Tua Rita, Le Macchiole, and Montepelosa prior to joining Coltibuono.

Wine Enthusiast Companies has promoted Hank Rosen to the position of chief operating officer.

St. Julian, the largest winery in Michigan, has hired Dr. David Miller as winemaker, replacing Chas Catherman.



Flowers planted near a vineyard can lure pests away from the grapes

One of the biggest wine stories of the year has been the potential spread of Pierce's disease through California's wine country. This summer, while the glassy-winged sharpshooter, which carries Pierce's disease, was chomping on grapevines throughout Temecula County in Southern California, grape growers in the northern part of the state were becoming increasingly worried that the insect might soon reach their vineyards.

The pesky bug transmits the disease to the plants it nibbles, including grapevines. Pierce's interrupts a plant's ability to circulate water and nutrients; as a result, fruit shrivels and the vine eventually dies. And it's not just grapevines that are afflicted. In Southern California, ornamental flowers, orange and almond groves, and possibly oak trees have been infected by Pierce's disease.

Although no glassy-winged sharpshooters have been found in Sonoma County as of yet, wineries are starting to take some proactive steps to protect their vineyards, should the bug migrate north.

Davis Bynum Winery in the Russian River Valley is hedging its bets by creating a habitat ditch, or insectary. Installed alongside a six-and-a-half-acre hilltop Pinot Noir vineyard planted in 1992, the two-foot-wide ditch currently runs for 500 feet and includes about three dozen varieties of flowering plants. The horticultural mix, called the "Good Bug Blend" by consultant Amigo Cantisano, owner of Organic Ag Advisors, is intended to divert the glassy-winged sharpshooter away from the precious grapevines.

According to Cantisano, sharpshooters prefer the tender foliage of the plants in the habitat ditch to the tougher vines. And the unwanted sharpshooters don't just dine in the ditch; they also lay their eggs among the leaves and flowers. Naturally, other bugs are attracted to the ditch as well, in part by nectar but also by the sharpshooter eggs, larvae and nymphs. Big-eyed bugs, damsel bugs, lacewings, ladybugs, spiders, tiny pirate bugs, and four species of nonstinging predatory and parasitic wasps are among the "beneficial" insects that like a little sharpshooter in their diets. And since every organism needs dinner, including the beneficial bugs that help maintain the delicate balance of nature, a habitat ditch might be just the prophylactic vineyard owners could use to their advantage.

Although Cantisano has not yet worked in areas troubled by the glassy-wing, his habitat ditches have been successful in reducing infestations of its cousins, the blue and the blue-green sharpshooter, two less voracious species that have beenspreading Pierce's disease in California vineyards for a century. The physiology of the glassy-wing is similar to the others, says Cantisano, who is optimistic that the introduction of such ditches will slow or halt the bug's migration.

Davis Bynum's habitat ditch, which if successful could be expanded to surround the entire vineyard, is part of a larger program of sustainable farming at the winery, where a new perma-culture forest supports dozens of harvestable crops, including pomegranates, kiwis, and olives in addition to old-vine Zinfandel.

Michele Anna Jordan

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