EU Adopts Wine Sector Reform
The European Commission formally adopted new EU wine sector reforms today as a way to take back share from new world wine producers. It follows the agreement reached by ministers in December 2007 after a long, drawn-out set of negotiations and compromises took place. The reform will take effect August 1.
One of the most controversial elements of the package is that the government will pay less-successful wineries to dig up vineyards and voluntarily leave the business. The scheme will last for three years and apply to a maximum of 175,000 hectares of vineyard in the EU.
The reform will also put an end to crisis distillation spending beginning 2012. In the past, the EU paid for thousands of liters of unwanted wine to be turned into industrial ethanol. The system cost about €1.269 billion annually and soaked up two-fifths of the EU’s wine budget.
Under the new plan, the EU will give national governments an allocated sum of money to spend on their wine sectors. The money can only be spent on promoting EU wines abroad, modernizing the production chain and other measures including harvest insurance plans.
Northern producers have also agreed to reduce the amount of sugar they use to fortify their wines.
A council statement said: “The reform provides for a fast restructuring of the wine sector in that it includes a voluntary, three-year grubbing-up scheme to provide an alternative for uncompetitive producers and to remove surplus and uncompetitive wine from the market.”
“The reform will allow us to concentrate on taking on our competitors and winning back market share,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development and mastermind behind the reform plan.
In the past decade, EU wines have lost share of the world wine trade and are hoping to make a comeback. In 2007, the EU held 62% of the global market share, down from an average of 79% between 1986 and 1990, according to the Organisation International de la Vigne et du Vin.
“Now we can get on with the final preparations for the entry into force of the new system in August. Instead of wasting money getting rid of unwanted surpluses, the reform will allow us to concentrate on taking on our competitors and winning back market share. I hope the Member States will make good use of the new tools available," Fischer Boel continued.
VINUM CAPITAL PARTNERS LOOKS FOR ACQUISITIONS
Equity fund manger Vinum Capital Management has formed Vinum Capital Partners, a $250 million private equity fund looking to acquire mid-size premium and super-premium wine properties producing between 20,000 and 150,000 cases a year. The company is interested in California’s North Coast and Central Coast regions, in addition to properties in Oregon and Washington.
"The focus of this fund is to acquire wine properties efficiently, grow them effectively with expertise and necessary growth capital, and ultimately sell them to strategic and financial acquirers,” said Thomas Thornhill, Managing Partner of VCM, who is also chairman of the Mendocino Wine Company and a former partner at Montgomery Securities.
The company is interested in wineries with solid brands but inadequate capital or eagerness to exit the business.
"Our objective is to help provide liquidity for family-owned businesses. Many of them have been in business 20 to 40 years and there may not be a second generation able or willing to take on the business," Thornhill continued.
The VCP team has strong experience in winery operations, vineyard management, financial management, and M&A transactions. It consists of winery professionals – whose experience includes Mondavi, Gallo, Beringer, Ravenswood, and Schramsberg – and investment professionals who collectively have bought, sold, managed, or brokered over $1 billion in winery transactions.
VCM's investment partners include Justin Faggioli, formerly coo of Ravenswood; Scott Setrakian, formerly director of Golden State Vineyards; and G. Craig Vachon, a financing and M&A expert. The fund's portfolio management team includes Bill Foster, formerly from Beringer; Jonathan Pey, formerly from Robert Mondavi and Fosters Wine Estates; Doug Rogers, formerly from Gallo, Southcorp, and Brown-Forman Wines; and Bob Steinhauer, formerly from Beringer and one of the leading viticultural experts in the world. Strategic Advisors include Don Brain with VinREIT and Global Wine Partners; and Tom Hakel, formerly with Stag's Leap Wine Cellars.
WSD BRIEFS:
EVANS & TATE SHAREHOLDERS will be asked next month to vote on a restructuring deal that will leave them holding just over 5% of the collapsed winemaker. They will also be asked to approve a name change to ETW Corporation intended to re-brand the company, which has been struggling to rebuild since falling into financial trouble in 2005 and closing its doors last year. According to local reports, if shareholder reject the plan and fail to pass any of the 12 resolutions, E&T will likely go into liquidation.
MARYLAND GOV. MARTIN O’MALLEY decided last week to temporarily postpone signing a law that would continue to classify RTDs as beer. If the bill is vetoed, the drinks will be taxed at $1.50 a gallon, the same rate as spirits, instead of the 9 cents a gallon of beer.
Until tomorrow, Megan
I had a monumental idea this morning, but I didn't like it.
Samuel Goldwyn
--------- Sell Day Calendar ----------
Today's Sell Day: 21
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
One of the most controversial elements of the package is that the government will pay less-successful wineries to dig up vineyards and voluntarily leave the business. The scheme will last for three years and apply to a maximum of 175,000 hectares of vineyard in the EU.
The reform will also put an end to crisis distillation spending beginning 2012. In the past, the EU paid for thousands of liters of unwanted wine to be turned into industrial ethanol. The system cost about €1.269 billion annually and soaked up two-fifths of the EU’s wine budget.
Under the new plan, the EU will give national governments an allocated sum of money to spend on their wine sectors. The money can only be spent on promoting EU wines abroad, modernizing the production chain and other measures including harvest insurance plans.
Northern producers have also agreed to reduce the amount of sugar they use to fortify their wines.
A council statement said: “The reform provides for a fast restructuring of the wine sector in that it includes a voluntary, three-year grubbing-up scheme to provide an alternative for uncompetitive producers and to remove surplus and uncompetitive wine from the market.”
“The reform will allow us to concentrate on taking on our competitors and winning back market share,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development and mastermind behind the reform plan.
In the past decade, EU wines have lost share of the world wine trade and are hoping to make a comeback. In 2007, the EU held 62% of the global market share, down from an average of 79% between 1986 and 1990, according to the Organisation International de la Vigne et du Vin.
“Now we can get on with the final preparations for the entry into force of the new system in August. Instead of wasting money getting rid of unwanted surpluses, the reform will allow us to concentrate on taking on our competitors and winning back market share. I hope the Member States will make good use of the new tools available," Fischer Boel continued.
VINUM CAPITAL PARTNERS LOOKS FOR ACQUISITIONS
Equity fund manger Vinum Capital Management has formed Vinum Capital Partners, a $250 million private equity fund looking to acquire mid-size premium and super-premium wine properties producing between 20,000 and 150,000 cases a year. The company is interested in California’s North Coast and Central Coast regions, in addition to properties in Oregon and Washington.
"The focus of this fund is to acquire wine properties efficiently, grow them effectively with expertise and necessary growth capital, and ultimately sell them to strategic and financial acquirers,” said Thomas Thornhill, Managing Partner of VCM, who is also chairman of the Mendocino Wine Company and a former partner at Montgomery Securities.
The company is interested in wineries with solid brands but inadequate capital or eagerness to exit the business.
"Our objective is to help provide liquidity for family-owned businesses. Many of them have been in business 20 to 40 years and there may not be a second generation able or willing to take on the business," Thornhill continued.
The VCP team has strong experience in winery operations, vineyard management, financial management, and M&A transactions. It consists of winery professionals – whose experience includes Mondavi, Gallo, Beringer, Ravenswood, and Schramsberg – and investment professionals who collectively have bought, sold, managed, or brokered over $1 billion in winery transactions.
VCM's investment partners include Justin Faggioli, formerly coo of Ravenswood; Scott Setrakian, formerly director of Golden State Vineyards; and G. Craig Vachon, a financing and M&A expert. The fund's portfolio management team includes Bill Foster, formerly from Beringer; Jonathan Pey, formerly from Robert Mondavi and Fosters Wine Estates; Doug Rogers, formerly from Gallo, Southcorp, and Brown-Forman Wines; and Bob Steinhauer, formerly from Beringer and one of the leading viticultural experts in the world. Strategic Advisors include Don Brain with VinREIT and Global Wine Partners; and Tom Hakel, formerly with Stag's Leap Wine Cellars.
WSD BRIEFS:
EVANS & TATE SHAREHOLDERS will be asked next month to vote on a restructuring deal that will leave them holding just over 5% of the collapsed winemaker. They will also be asked to approve a name change to ETW Corporation intended to re-brand the company, which has been struggling to rebuild since falling into financial trouble in 2005 and closing its doors last year. According to local reports, if shareholder reject the plan and fail to pass any of the 12 resolutions, E&T will likely go into liquidation.
MARYLAND GOV. MARTIN O’MALLEY decided last week to temporarily postpone signing a law that would continue to classify RTDs as beer. If the bill is vetoed, the drinks will be taxed at $1.50 a gallon, the same rate as spirits, instead of the 9 cents a gallon of beer.
Until tomorrow, Megan
I had a monumental idea this morning, but I didn't like it.
Samuel Goldwyn
--------- Sell Day Calendar ----------
Today's Sell Day: 21
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 1:02 PM
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