How do you say behemoth in Italian? When wine cooperatives Cantine Riunite, the Réggio-Émilia producer best known for making sweet, fizzy Lambrusco a hit in America, and Modena-based CIV merged last September, they created one of the largest growers' co-ops in Italy. But they decided to grow further last month, buying the even larger co-op Gruppo Italiano Vini (GIV). The financial details of the deal were undisclosed.
The deal creates one of the largest wine groups in the world, producing 110 million bottles a year from grapes sourced from 2,800 growers for an estimated annual turnover of $600 million, according to a Cantine Riunite & CIV press statement.
The deal was set up by Riunite and CIV's merger. Both owned large shares of GIV, and the merger made their new company the majority shareholder. Executives soon began working to buy out the other major shareholders.
Cantine Riunite & CIV produce mostly Lambrusco and prosecco wines for worldwide distribution. GIV owns 3,088 acres of vineyards and wine cellars located from the top to the toe of Italy.
According to Emilio Pedron, who will remain managing director of GIV, a post he has held since the group's formation in 1985, the two companies will continue to run autonomously, but the operation will open possibilities for combining forces at administrative and strategic levels.
"We will be focusing on combined efforts to consolidate our sales in already established markets, such as the U.S., Canada, Russia and Japan," he said. "We aim to be more proactive with the consumer and are setting up local offices in strategic areas to allow for more direct sales. We plan to break into new markets such as China and India in the same way."
GIV's estates include Nino Negri in Valtellina, Ca' Bianca in Piedmont, Melini and Machiavelli in Tuscany, Bigi in Umbria, Fontana Candida in Lazio, Castello Monaci in Puglia, Terre degli Svevi in Basilicata and Rapitalà in Sicily.
The group also owns the Lamberti and Santi estates in the Veneto region and, in December 2008, it bought Bolla, one of Veneto's historic brands, from American spirits manufacturer Brown-Forman. Bolla produces around 1.3 million cases of wine annually.
"We know that, in the near future, market conditions are going to be tough, especially in the U.S. and the U.K.," said Pedron, "but we are confident that we can forge ahead. We have the ability to control costs, from the vineyard to the distributor, and we can be competitive not only in terms of prices, but also in terms of competence and efficiency."