California wine boom

Press, 17 July 1980, Page 8

California wine boom

By

JOHN HUTCHISON,

in San Francisco

Foreign investors are putting money into California wineries at an increasing pace. At least $125 million has entered from Europe, Asia and Canada into operations producing more than 2.5 million cases annually of . high quality .vintages,. these are mostly ■from North Coast and Central Coast : vineyards, increasingly recognised world-wide for their dry table wines.

The most recent foreign venture capital comes from Piper-Heidsieck, the prestigious French champagne maker. They are joining with Sonoma Vineyards to expand that

middle-sized winery with the development of a $6 iriillion plant. It will make high quality, sparkling wine from two premium grapes, , well known in ■ France, which also perform especially, well in the' cool Russian River valley of Sonoma County — chardonnay and pinot noir. : French money has already come into California’s wine business, . and. there are rumours of more which other Gallic firms are eager to invest in. Moet et Chanessey, makers of Moet et Chandon, are doubling the capacity of Domaine Chandon, the showplace built in the. Napa Valley in 1977 to produce sparkling wine. (American law permits. such wine to be labelled “champagne,’’ a practice outlawed. in most wine countries outside France).: Lansori,../ another prestigious French champagne firm, is rumoured to be seeking a California in-, vestment. The Baron Philippe de Rothschild, and Robert Mondavi, a prominent Napa Valley vintner,*, recently announced a joint venture to: make a premium Bordeaux-type red wine here. French-Swiss interests in the Nestle chocolate and coffee firm own a fine old North Coast winery, —M

Beringer. Canadians have bought a winery and vineyards in California.

The leading wine industry consultant in California . believes that the pace of foreign investment will accelerate. Dozens of others are seeking entry, says Lou Gomberg. . For some, . the cheap American dollar makes the investment attractive, and rapidly growing American wine. consumption promises a lucrative market. National wine consumption passed 7.5 litres per. capita for the first time last year. The Japanese whisky company, Suntbry, is associated with a branch of

the Firestone (rubber manufacturing) family in a modern Central Coast winery. A .German wine and spirits company now owns historic Buena Vista, founded, 'in 1856 in So- : noma County. A Swiss company, owns a small,. , select winery. Another : small winery belongs to a Thai company. But the foreigners have so far not made a serious ; incursion into the Califor- t nia industry in terms of ‘ its volume'. Their in- 1 vestment concerns less t than 1.5 per cent of the ■ State’s total wine ptoduc- ; tion, which last year was t about 1.5 million litres — about 88 per cent of United States wine output. ’