Wines & Vines

September 2014 Wine Industry Finance Issue

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14 W i n e s & V i n e s s e P T e M B e R 2 0 1 4 S E P T E M B E R N E W S Top Stories The month in perspective Napa wineries in breach of compliance The Napa County, Calif., Planning Commission's annual audit of 20 wineries selected at random found one winery producing more volume than permitted, one not meeting the requirements for grape sourc- ing (known as "the 75% rule"), six wineries not in compliance with visi- tation limits and four that held more marketing events than allowed. One of the 20 wineries selected had filed for bankruptcy and one was no longer producing wine, accord- ing to the 2013 Winery Production Audit, released Aug. 6. USDA predicts 3.9 million tons from California The USDA's National Agricultural Statistics Service on Aug. 12 pre- dicted that California's 2014 wine grape harvest would total 3.9 mil- lion tons, a decrease of 8% from 2013. "Bunch counts were reported to be down from last year's counts for wine grapes," according to the report. "Drought was a concern for many grapegrowers." Kurniawan gets 10 years After weeks of repeated delays, U.S. District Judge Richard Berman of the Southern District of New York sentenced convicted wine counter- feiter Rudy Kurniawan to 10 years in prison Aug. 7. Kurniawan was found guilty of selling wine collec- tors thousands of bottles doctored to resemble iconic brands such as Domaine de la Romanée-Conti and Château Mouton-Rothschild. As part of his sentence Kurniawan also was ordered to pay $28.4 million to victims of his scheme. Name claim pits wine against whiskey Jameson Irish Whiskey, a brand of Pernod Ricard, filed a claim of trademark infringement against Ja- mieson Ranch Vineyards, arguing that the American Canyon, Calif.- based wine brand's name is too similar to that of the 234-year-old whiskey maker from Cork, Ireland. Jamieson Ranch previously was known as Valley Gate Vineyards, Kirkland Ranch Winery and Reata Winery; one of its brands will retain the Reata name. Southwest Wine Center set to open The new $3 million Southwest Wine Center in the Verde Valley of Arizona is complete, and students should be making wine there this harvest. This being the first year, students will only crush 4 tons of grapes, but volume is expected to increase over time. (The teaching winery's full ca- pacity is 3,000 cases.) Coppola Winery's Asimont to lead ASEV Lise Asimont, director of grower relations at Francis Ford Coppola, was named board president for the American Society for Enology and Viticulture. Asimont has been at Coppola since 2006 and served on the ASEV board for the past eight years. She told Wines & Vines she is already thinking about the group's 2015 annual meeting in Portland, Ore., saying, "I'm industry-driven. We'll have 20% research; the other 80% will explain how we use the information." Increased shipments behind Ste. Michelle revenue boost Altria Group Inc. reported that its Ste. Michelle Wine Estates posted a net revenue increase of 6.6% during the second quarter of 2014, a jump it credited to higher pricing and in- creased shipments. Shipments dur- ing the same period were up 1.9%. Shipments of the 14 Hands and Chateau Ste. Michelle brands both saw double-digit increases during the second quarter, while Columbia Crest shipments fell 17.3%. Wineries change hands Ben Zeitman and Katie Quinn sold their 4,000-case Amador Foothill Winery and vineyard property in the Shenandoah Valley to Tom and Beth Jones, former co-owners of the Lava Cap Winery in El Dorado County. Meanwhile, brothers Mike and Bob Milat announced they would lease their St. Helena, Calif., winery to Delectus Winery. They plan to keep living in their homes on the family- owned property, which they bought from their parents in 1974. Québecois can carry wine across provincial borders Quebec lawmakers relaxed regu- lations about the transfer of wine and other alcoholic beverages for personal consumption between provinces. In stating that individu- als can now bring up to 9 liters of wine into Quebec, finance minister Carlos Leitäo and public security minister Lise Thériault issued a statement saying regulations had to "be adapted to today's reality." Residents must personally trans- port the wine into the province, as the new regulations do not apply to wine shipments. University researchers ask for sample bottles Researchers from the University of California, Davis, and Califor- nia State University, Fresno, are soliciting donations of bottled red wines for a collaborative research project studying tannin chemistry and mouthfeel. The three-year study involves wines bottled be- tween January and June 2014. Participants are asked to provide two bottles, although an additional 12 bottles may be requested during the second phase of the study. For details, contact James Kennedy at jakennedy@csufresno.edu. LAtESt NEWS More detail on the news at: winesandvines.com California's Jamieson Ranch Vineyards is in a dispute with Irish whiskey maker Jameson. tPG Capital Management is among the groups now vying for owner- ship of Treasury Wine Estates, a winemaking company with brands in Australia, Europe and the Americas. TPG matched a $3.4 billion (AUS) bid filed by private-equity group KKR & Co. LP with help from Rhone Capital. See page 15. Nearly 60% of California is now suffering "extreme" drought condi- tions with little hope of relief in the near future, causing farmers to pump record levels of groundwater to offset lost surface water. Lawmakers on Aug. 13 approved a bond measure that would commit nearly $3 billion toward water storage if voters approve it in November. The 2014 vintage, however, looks like it will arrive at wineries relatively unharmed by the dry conditions. See page 16. Treasury Wine Estates owns wine brands on four continents.

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