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Allied Domecq Sells Callaway in Southern California

As its former parent company changes hands, the Temecula region's largest winery may get a new start

Lynn Alley
Posted: August 5, 2005

After several years of turmoil and misfortune, Callaway Vineyards and Winery in Southern California is being sold by its parent company to a private investment partnership based in Del Mar, Calif.

Though Callaway has been the lynchpin of the Temecula appellation's wine tourism, it made up only a minor portion of the wine business for Allied Domecq, formerly one of the world's largest alcohol-beverage companies. The sale of U.K-based Allied Domecq to French firm Pernod Ricard was concluded in July; Pernod is splitting the wine and spirits labels with Chicago-based Fortune Brands (maker of Jim Beam), which will take over most of Allied's other California wineries.

Del Mar businesswoman Patricia Lin has acquired the Callaway winery, restaurant, wine-club business and 35 acres of vineyards. Prior to the sale, the winery had been producing 200,000 cases annually, primarily Chardonnay. Under the deal, Callaway reserves the right to use the Callaway Vineyards and Winery brand name only for tasting-room and wine-club sales. The Callaway Coastal brand name has been sold to Shaw-Ross International, a Miami-based distributor.

Lin, who heads her family's investment firm, also recently purchased another 235 acres of land in Temecula, 50 of which are planted to grapevines. She has not yet disclosed her plans for Callaway and has not returned calls for comment, but she had her first meeting with the winery staff on Aug. 4.

Callaway's longtime communications director, Peggy Evans, said that after some weeks of anxiety, the winery staff is feeling optimistic about the future. "[Lin] is a very nice lady, very down to earth," Evans said. "She says she really wants to concentrate on our consumer direct sales [through the tasting room and wine club]."

According to Evans, Lin first approached Allied Domecq about purchasing Callaway about 18 months ago. "She's been coming to Temecula's wine country for several years now, and she has clearly done her homework," said Evans. "She said she's watched the growth over the years and never dreamed she'd actually be able to buy the winery one day."

Callaway, which was founded by golf-club magnate Ely Callaway, has suffered in recent years, following Temecula's infestation in the late 1990s by the glassy-winged sharpshooter, an insect that carries vine-killing Pierce's disease. Roughly half of the vines on Callaway's property succumbed to the disease. Callaway began buying grapes from other regions to supplement production and, in 2000, switched its brand name to Callaway Coastal, signaling a change in direction. A few years later, the winery opted out of its lease on hundreds of acres of vineyards with the sale of the land to a developer who planned to build homes on a portion of the property.

Evans said she believes Lin's first efforts will be directed toward replanting the vineyards surrounding the winery. She may then plant more vineyards, put in a golf course and perhaps even subdivide the remaining land into 5-acre estates.

Two of the winery's three large bladder presses are being shipped north to Allied Domecq, which has prompted speculation among locals that Lin may be cutting on-site production and planning to buy bulk wine from outside Temecula to bottle at the winery.

However, local growers and winery owners who have met Lin feel her acquisition of Temecula's largest winery will benefit the region. Marshall Stuart, owner of Stuart Cellars, said Lin has been a member of his wine club for several years. "She's very attuned to business," Stuart said. "She wants to upgrade the [Callaway] facility so that it fits more comfortably into the valley, rather than look like a factory."

"I've met with Patricia, and she seems like she's going to be good for the valley," said Mike Rennie, owner of Leonesse Cellars and Stage Ranch Farm Management. "Callaway's been in limbo for years, and Patricia seems to see the potential of Temecula as a world-class wine region."

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