Constellation Brands announced this week that it wants to sell three of its Australian winemaking facilities and lay off about 350 workers there. The announcement makes a lot more sense in the context of a conversation I had about a month ago with James Mariani, family proprietor of Banfi Vintners.
In a special arrangement, Banfi imports the Padthaway-based Stonehaven, one of the wineries Constellation wants to divest itself of—Leasingham in Clare and Goundrey in Western Australia are the others.
Constellation stressed that it means to keep the Stonehaven and Leasingham brands, which were acquired as part of the Australian wine giant BRL Hardy in 2003; Goundrey was part of the Canadian company Vincor in 2006. But they want to sell the wineries and the vineyards, accompanied by the staff responsible for running them, as a package. That has to affect the wines Constellation intends to make under the Stonehaven, Leasingham and Goundrey names.
So where does Banfi come in? Best known for its Italian winery in Montalcino, Banfi made an arrangement eight years ago with BRL Hardy to market Stonehaven wines in the U.S., an effort to keep them distinct from Hardy's other brands, including Hardy, Reynella and Leasingham. For Banfi, it was a chance to dip a toe into importing Australian wines from a company that could deliver enough wine to make it worthwhile.
Banfi's success with its Chilean wine partners, Concha y Toro and Almaviva, got James Mariani thinking. "The public is excited about these Chilean wines, but I sense a dial-down of interest in the Australian category," he said when we talked last month. Though he did not say so, he may have known or guessed that Constellation was planning significant changes to Stonehaven.
Ironically, this is all happening just as Stonehaven plans to release a revamped portfolio of wines, geared more toward higher quality and character distinctive of the Limestone Coast region, where the winery draws its best grapes. I tasted these new bottlings with winemaker Susanne Bell in Australia in May. I thought the reds showed more depth than what I had tasted before. (I always liked the whites, especially the Rieslings and the Chardonnays.)
"It is very sad news," Bell wrote me in response to an email Sunday. "I think it is only starting to sink in. The brand is being retained but they are selling the winery, vineyards and all the staff (including me). "If you know of anyone with some cash," she added, "let them know a good winery, vineyards and a great winemaker are on the market!"
The same situation holds at Leasingham, which makes some stunning wines under its "Classic Clare" imprimatur and excellent value wines, especially Rieslings, in the $10 to $20 range. It's even named after the town where it is in Clare. It will be strange if the wines for brands called Leasingham and Stonehaven are made elsewhere, while the wineries, vineyards and staff that used to be responsible for the wines make something else.
Ironicaly, this is happening just when Australia is making a strong push to differentiate its regional wines in the mind of the public. Stonehaven and Leasingham have been good examples of these regional distinctions, and retaining the brands without keeping the vineyards, let along the wineries and the people, can only confuse matters.
With Australia trying to deal with the triple whammy of unrelenting drought, a strengthening local currency and our own economic woes here in the U.S., the inevitable tug-of-war between winemaking and marketing is bound to produce some casualties. Business observers in Australia are waiting nervously for Foster's to make its announcement of how it plans to deal with these economic challenges. It's not going to be pretty.
James Peterson — San Antonio, Texas — August 11, 2008 6:57pm ET
Harvey Steiman — San Francisco, CA — August 11, 2008 7:20pm ET
Roy Piper — August 12, 2008 1:56am ET
Michael Tracy — Corona, CA — August 16, 2008 6:50pm ET
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