Holiday Recap and Other News
We’re back with renewed vigor after a nice, long break and hope you had a wonderful holiday vacation as well. A few noteworthy things happened over the holidays, including several direct shipping updates and Foley Wine Group purchasing Sebastiani Vineyards. Here is a recap along with breaking news to get you up to speed.
SEBASTIANI SELLS TO FOLEY WINE GROUP
Sonoma’s historic Sebastiani Vineyards was sold to Foley Wine Group, based in Santa Barbara County, in late December for an undisclosed sum. Several industry sources, along with Sebastiani family members, say they chose to sell because of internal family divisions.
"We are confident that this transaction will strengthen Sebastiani’s leading reputation as one of North America's premier producers of wine and continue the Sebastiani heritage of consistent quality and value," Mary Ann Cuneo, ceo and granddaughter of the winery's founder, Samuele Sebastiani, said in an announcement.
However, Don Sebastiani, the 55-year-old son of second-generation winery leader August Sebastiani, told local papers that the decision to sell the family vineyards was not unanimous.
"There were differences of opinion," he said, according to the Press Democrat. "We have our differences behind closed doors. When the doors are open again, we come together."
With the sale of Sebastiani Winery, the family is "all very upbeat and hopeful," Don Sebastiani was reported saying elsewhere.
FAMILY HISTORY. After second-generation August Sebastiani died, his eldest son, Sam Sebastiani, headed the company, but left in 1986 over management differences. Younger brother Don Sebastiani took his place but eventually left Sebastiani Vineyards to establish his own wine company, Don Sebastiani & Sons, in 2001. Sam Sebastiani went on to found Viansa Winery, which he sold in 2005 to an investment group.
Sister Mary Ann Sebastiani Cuneo, and her husband, Richard Cuneo, took over the family winery after Don left. Richard is chairman of the board.
Mary Ann Cuneo told the Sonoma Valley Sun that "all of the family agreed this is a good thing. Everyone can go their own way and do their own thing. We are really happy to sell to an individual and not to a corporate takeover. My brothers, Don and Sam, and I are all pleased."
HOW IT WENT DOWN. The sale of Sebastiani has been rumored for some time, but was not announced until late Friday night (Dec. 20) to employees, surprising many. The sale includes the Sebastiani winery, two office buildings, the tasting room and event center in downtown Sonoma, and 225 acres of vineyards. Half of the vineyard acreage will be owned outright by Foley, and the other half will be farmed by Foley in a crop share agreement with the Sebastianis.
Foley Wine Group founder Bill Foley, "We're not planning on changing branding, but we may change the packaging of the Sebastiani wines." Foley first considered buying Sebastiani in June, but talks fell apart and other potential buyers lined up. Discussions were reactivated a month ago.
Foley Wine Group manages a portfolio of vineyards and wineries in California and the Pacific Northwest, including Foley Estates Vineyard and Winery, Lincourt Vineyards, Firestone Vineyards, Merus, Altus, Goodnight Cellars and Three Rivers Winery.
We believe other medium and large independent wineries will be snatched in the near future as it becomes increasingly difficult to compete against the likes of Gallo’s and Constellation’s distribution network. A string of multigenerational wineries are also facing with the dilemma of handing over the business to children and grandchildren, which may lead some businesses to sell.
DIRECT SHIPPING: YOU WIN SOME, YOU LOSE SOME
Court cases regarding direct-to-consumer wine shipments in Kentucky, Massachusetts, and Michigan surfaced over the holidays, posing both good and bad news for wineries and wholesalers.
KENTUCKY. In Kentucky, the U.S. 6th Circuit Court of Appeals ruled on Christmas Eve in favor of an earlier decision that struck down Kentucky laws that restricted out-of-state wineries. Rules that required residents to purchase wine in-person were struck down by the three-judge panel as a violation of the Commerce Clause. Judge Eric L. Clay wrote that "out-of-state wineries are clearly burdened by Kentucky's regulatory scheme."
The Kentucky panel’s ruling directly conflicts with a Seventh Circuit ruling made in Indiana last year that upholds the state’s face-to-face requirement. Since the two appellate federal Circuit courts are in conflict, there’s the possibility that it could end up in the Supreme Court.
MASSACHUSETTS. District Judge Rya Zobel ordered the state's liquor authorities to issue shipping licenses to out-of-state wineries rather than restrict all winery shipments. Recall that the judge ruled against production caps for wineries and said all wineries should be allowed to apply for a direct shipping license. Formerly, wineries producing fewer than 30k gallons of wine a year could ship direct while larger wineries were barred from shipping if they used a wholesaler. The state has 30 days from entry of the judgment to file notice of appeal.
MICHIGAN. Unlike the prior two states, Michigan ruled in favor of three-tier interests. The law, which has been passed by both houses in the state, makes all direct shipping to consumers illegal by retailers, whether they be in-state or out-of-state. In what first looked like a victory to retailers, this law is in response to a District Court ruling in September which said that the state discriminates against out-of-state retailers by not allowing them to ship direct to consumers when in-state retailers can. The bill now awaits Gov. Jennifer Granholm's signature, and she is expected to sign.
CONTROL STATES DECLINE -5.6% IN NOVEMBER
In November, control states spirits volumes declined -5.6% year over year but grew 2.9% year to date. UBS analyst Melissa Earlam said volumes were hurt by an extra Sunday in the month and one less selling week in Michigan and Utah.
Diageo’s volumes declined -7% in control states year over year, according to NABCA data. The company gained share in cocktails, growing 2% while the category declined -3% year over year. It was “broadly stable in rum” and Scotch, while the category was down -7% and -8.7%, respectively. Diageo lost volume share in Canadian Whiskey, declining -11% while the category was down -7%. It also lost share in vodka (-3.8% vs category -1.3%), gin (-9% vs category -6.5%), cordials (-11% vs category -10%) and tequila (-9% vs category -7%).
Pernod’s volumes fell -10.7%. It gained 12% of share in Irish whiskey, while the category was up 7%. It also gained share in cordials (-6%), but lost share in vodka (-14%), gin (-10%), Scotch (-12%), rum (-9%) and brandy/Cognac (-28% vs category -8%).
Brown-Forman volumes fell -9.2%, and Remy declined -14.3% year over year. Meanwhile, Skyy Spirits declined -1.8%.
UBS rated Pernod Buy, and Diageo, Campari and Brown Forman Neutral.
WSD BRIEFS:
FOLEY WINE GROUP APPOINTS PRES. Foley Wine Group chairman Bill Foley has hired long-time wine industry executive Tim Matz to serve as president of the company. Tim joins the Foley Wine Group following a brief stint overseeing the Langtry Estate & Vineyards in Lake County after four years as President of Jackson Wine Estates International, where he was responsible for the international business of Kendall Jackson Wine Estates. He was previously Vice President and General Manager for Beringer Blass Wine Estates (imports and Canada) from 2002 to 2004 and he was President (Americas) of Southcorp Wines prior to its acquisition by Beringer Blass.
THE WINE GROUP IS REPLACING its 187 ml single serving glass bottles for the popular Glen Ellen and Fish Eye brands with environmentally-friendly 250 ml Tetra Paks. These premium wines include Glen Ellen Chardonnay, Pinot Grigio, White Zinfandel, Merlot and Cabernet Sauvignon, and Fish Eye Chardonnay and Merlot. Glen Ellen wines are price at SRP $5.99 and Fish Eye at SRP $6.99.
Until tomorrow, Megan
“A man may be so much of everything that he is nothing of anything.”
Samuel Johnson
--------- Sell Day Calendar ----------
Today's Sell Day: 2
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Fri
This month last year ended on a: Thurs
YTD sell days Over/Under: 0
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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.
SEBASTIANI SELLS TO FOLEY WINE GROUP
Sonoma’s historic Sebastiani Vineyards was sold to Foley Wine Group, based in Santa Barbara County, in late December for an undisclosed sum. Several industry sources, along with Sebastiani family members, say they chose to sell because of internal family divisions.
"We are confident that this transaction will strengthen Sebastiani’s leading reputation as one of North America's premier producers of wine and continue the Sebastiani heritage of consistent quality and value," Mary Ann Cuneo, ceo and granddaughter of the winery's founder, Samuele Sebastiani, said in an announcement.
However, Don Sebastiani, the 55-year-old son of second-generation winery leader August Sebastiani, told local papers that the decision to sell the family vineyards was not unanimous.
"There were differences of opinion," he said, according to the Press Democrat. "We have our differences behind closed doors. When the doors are open again, we come together."
With the sale of Sebastiani Winery, the family is "all very upbeat and hopeful," Don Sebastiani was reported saying elsewhere.
FAMILY HISTORY. After second-generation August Sebastiani died, his eldest son, Sam Sebastiani, headed the company, but left in 1986 over management differences. Younger brother Don Sebastiani took his place but eventually left Sebastiani Vineyards to establish his own wine company, Don Sebastiani & Sons, in 2001. Sam Sebastiani went on to found Viansa Winery, which he sold in 2005 to an investment group.
Sister Mary Ann Sebastiani Cuneo, and her husband, Richard Cuneo, took over the family winery after Don left. Richard is chairman of the board.
Mary Ann Cuneo told the Sonoma Valley Sun that "all of the family agreed this is a good thing. Everyone can go their own way and do their own thing. We are really happy to sell to an individual and not to a corporate takeover. My brothers, Don and Sam, and I are all pleased."
HOW IT WENT DOWN. The sale of Sebastiani has been rumored for some time, but was not announced until late Friday night (Dec. 20) to employees, surprising many. The sale includes the Sebastiani winery, two office buildings, the tasting room and event center in downtown Sonoma, and 225 acres of vineyards. Half of the vineyard acreage will be owned outright by Foley, and the other half will be farmed by Foley in a crop share agreement with the Sebastianis.
Foley Wine Group founder Bill Foley, "We're not planning on changing branding, but we may change the packaging of the Sebastiani wines." Foley first considered buying Sebastiani in June, but talks fell apart and other potential buyers lined up. Discussions were reactivated a month ago.
Foley Wine Group manages a portfolio of vineyards and wineries in California and the Pacific Northwest, including Foley Estates Vineyard and Winery, Lincourt Vineyards, Firestone Vineyards, Merus, Altus, Goodnight Cellars and Three Rivers Winery.
We believe other medium and large independent wineries will be snatched in the near future as it becomes increasingly difficult to compete against the likes of Gallo’s and Constellation’s distribution network. A string of multigenerational wineries are also facing with the dilemma of handing over the business to children and grandchildren, which may lead some businesses to sell.
DIRECT SHIPPING: YOU WIN SOME, YOU LOSE SOME
Court cases regarding direct-to-consumer wine shipments in Kentucky, Massachusetts, and Michigan surfaced over the holidays, posing both good and bad news for wineries and wholesalers.
KENTUCKY. In Kentucky, the U.S. 6th Circuit Court of Appeals ruled on Christmas Eve in favor of an earlier decision that struck down Kentucky laws that restricted out-of-state wineries. Rules that required residents to purchase wine in-person were struck down by the three-judge panel as a violation of the Commerce Clause. Judge Eric L. Clay wrote that "out-of-state wineries are clearly burdened by Kentucky's regulatory scheme."
The Kentucky panel’s ruling directly conflicts with a Seventh Circuit ruling made in Indiana last year that upholds the state’s face-to-face requirement. Since the two appellate federal Circuit courts are in conflict, there’s the possibility that it could end up in the Supreme Court.
MASSACHUSETTS. District Judge Rya Zobel ordered the state's liquor authorities to issue shipping licenses to out-of-state wineries rather than restrict all winery shipments. Recall that the judge ruled against production caps for wineries and said all wineries should be allowed to apply for a direct shipping license. Formerly, wineries producing fewer than 30k gallons of wine a year could ship direct while larger wineries were barred from shipping if they used a wholesaler. The state has 30 days from entry of the judgment to file notice of appeal.
MICHIGAN. Unlike the prior two states, Michigan ruled in favor of three-tier interests. The law, which has been passed by both houses in the state, makes all direct shipping to consumers illegal by retailers, whether they be in-state or out-of-state. In what first looked like a victory to retailers, this law is in response to a District Court ruling in September which said that the state discriminates against out-of-state retailers by not allowing them to ship direct to consumers when in-state retailers can. The bill now awaits Gov. Jennifer Granholm's signature, and she is expected to sign.
CONTROL STATES DECLINE -5.6% IN NOVEMBER
In November, control states spirits volumes declined -5.6% year over year but grew 2.9% year to date. UBS analyst Melissa Earlam said volumes were hurt by an extra Sunday in the month and one less selling week in Michigan and Utah.
Diageo’s volumes declined -7% in control states year over year, according to NABCA data. The company gained share in cocktails, growing 2% while the category declined -3% year over year. It was “broadly stable in rum” and Scotch, while the category was down -7% and -8.7%, respectively. Diageo lost volume share in Canadian Whiskey, declining -11% while the category was down -7%. It also lost share in vodka (-3.8% vs category -1.3%), gin (-9% vs category -6.5%), cordials (-11% vs category -10%) and tequila (-9% vs category -7%).
Pernod’s volumes fell -10.7%. It gained 12% of share in Irish whiskey, while the category was up 7%. It also gained share in cordials (-6%), but lost share in vodka (-14%), gin (-10%), Scotch (-12%), rum (-9%) and brandy/Cognac (-28% vs category -8%).
Brown-Forman volumes fell -9.2%, and Remy declined -14.3% year over year. Meanwhile, Skyy Spirits declined -1.8%.
UBS rated Pernod Buy, and Diageo, Campari and Brown Forman Neutral.
WSD BRIEFS:
FOLEY WINE GROUP APPOINTS PRES. Foley Wine Group chairman Bill Foley has hired long-time wine industry executive Tim Matz to serve as president of the company. Tim joins the Foley Wine Group following a brief stint overseeing the Langtry Estate & Vineyards in Lake County after four years as President of Jackson Wine Estates International, where he was responsible for the international business of Kendall Jackson Wine Estates. He was previously Vice President and General Manager for Beringer Blass Wine Estates (imports and Canada) from 2002 to 2004 and he was President (Americas) of Southcorp Wines prior to its acquisition by Beringer Blass.
THE WINE GROUP IS REPLACING its 187 ml single serving glass bottles for the popular Glen Ellen and Fish Eye brands with environmentally-friendly 250 ml Tetra Paks. These premium wines include Glen Ellen Chardonnay, Pinot Grigio, White Zinfandel, Merlot and Cabernet Sauvignon, and Fish Eye Chardonnay and Merlot. Glen Ellen wines are price at SRP $5.99 and Fish Eye at SRP $6.99.
Until tomorrow, Megan
“A man may be so much of everything that he is nothing of anything.”
Samuel Johnson
--------- Sell Day Calendar ----------
Today's Sell Day: 2
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Fri
This month last year ended on a: Thurs
YTD sell days Over/Under: 0
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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 2:29 PM
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