FLORENCE -- Marchesi de’ Frescobaldi, the Tuscan wine giant, announced yesterday that it has spun off some of its top wine estates into a new company, Tenute di Toscana, and then sold a small part of it to foreign investors, including Russian vodka producer SPI Group (whose brands include Stolichnaya) and former Napa Valley vintner Michael Mondavi, who now runs an import company.
It just proves that it costs a hell of a lot of money these days to stay competitive in the wine business when you reach a certain volume. The Frescobaldis obviously needed to raise some private capital following the purchase over the last few years of Ornellaia, which probably cost them close to $75 million. They first bought 50 percent from the Mondavi family in 2002 and then another 50 percent from Constellation Brands last year.
Tenute di Toscana includes Tenuta dell’Ornellaia (which also makes the famous pure Merlot Masseto) in Bolgheri, as well as Castelgiocondo and Luce della Vite, both in Montalcino. Apparently, the management of these estates and distribution of their wines will not change.
According to the press release: “After a reserved capital increase of Tenute di Toscana, Marchesi de’Frescobaldi’s holding is 72.29%. The board will be composed of eight members, six elected by Marchesi de’ Frescobaldi, including Michael Mondavi, and two elected by the SPI Group; Yuri Shefler (SPI chairman) and Andrey Skurikhin (SPI deputy chairman).”
I don’t think much is going to change with this news. But it’s always slightly worrying when a prestigious family such as the Frescobaldis sells part of its business to investors, institutional or private. As the saying goes, the fox now is in the hen house.
But money is money. And the Frescobaldi business is huge in Italy. Check out this in the press release:
“The name Frescobaldi has roots in Italian and Tuscan art, culture and history which go back for more than 700 years, and the family has been producing wine since the XIV century. Among the best known wines produced under the Frescobaldi name are: Nipozzano, Montesodi, Mormoreto, Castelgiocondo Brunello, and Luce. The Marchesi de’ Frescobaldi Group recently acquired 100% of Tenuta dell’Ornellaia which produces the world acclaimed wines Masseto and Ornellaia. The Group revenue in 2005 amounted to € 57.600.000. Frescobaldi owns vineyards in Tuscany and Friuli extending over 1.100 hectares (2.700 acres.) Their estates in Tuscany include Tenuta dell’Ornellaia, Castel Giocondo, Tenuta di Luce della Vite, Castello di Pomino, Castello di Nipozzano, Tenuta di Castiglioni and, in Collio (Friuli), Tenuta Conti Attems.”
Tal Cohen — Ft. Lauderdale, FL — May 15, 2006 2:27pm ET
Fred Pitts — New Jersey — May 26, 2006 6:41pm ET
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