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Guenoc Winery Owners Depart; California Property May Be Sold

Founder Orville Magoon is retiring while grapegrowers sue winery for breaking contracts.

Lynn Alley
Posted: December 16, 2003

Longtime Guenoc Winery owner Orville Magoon is retiring this month, amid a flurry of lawsuits from grapegrowers and rumors that wine giant Gallo may buy part of the 23,000-acre estate, which sits partly in California's Lake County and partly in Napa Valley.

On Dec. 12, Orville and his wife, Karen Melander-Magoon, sent an e-mail to their customers and friends, announcing that they plan to "leave the vineyards this month and take up residency in [San Francisco] and take on other projects, other journeys, other goals."

Guenoc has recently become embroiled in lawsuits filed by growers in Lake County who claim that the winery broke its grape contracts just prior to harvest. Such contract disputes have become more common in the California wine industry as producers have struggled to deal with the grape glut and a tough economy.

Among those filing suit is well-known Napa Valley grower Andy Beckstoffer. "Two weeks before harvest, [Orville] tells us he's not taking the grapes," said Beckstoffer. "We're extremely disappointed in the Magoon family."

Guenoc buys grapes from growers throughout California each year. According to sources, Guenoc may have broken contracts with as many as 12 Lake County growers, and contracts with growers in Lodi and the Central Coast are also in dispute.

Though Beckstoffer's vineyard holdings are vast, he expressed concern for the small growers who received similar treatment. "Sure, we're big boys, but there's a whole lot of little growers who can't defend themselves. We're talking groceries," he said.

Mike Schochet, vice president of Hawaii-based Magoon Estates Ltd., the winery's parent company, would not comment on the contract disputes, saying only, "It's a legal matter followed by legal counsel."

Inside sources said that Gallo has been looking at purchasing a portion of the Guenoc Estate, excluding the winery itself, to be used for grapegrowing and cattle ranching. Gallo declined to comment.

The Magoons indicated back in early 1999 that they had had enough of the business and were willing to part with all or some of the Guenoc property for the right price. In early 2000, Washington wine giant Stimson Lane, owner of Chateau Ste. Michelle and Columbia Crest, agreed to buy the brand name, winery and inventory for $100 million, but the deal later fell through. Guenoc has been losing money for some time, according to local sources.

Guenoc Valley's viticultural history dates to the mid-1800s, and from 1888 to 1906, famous English actress Lillie Langtry grew grapes and made claret there. Orville Magoon's family, who had made a fortune in Hawaiian real estate, acquired the Guenoc property in 1963 and used it for hunting and cattle ranching. In 1969, Orville, now 75, began replanting the vineyards with Bordeaux varieties; the estate now consists of 370 acres of vineyards and a 60,000-square-foot winery. In 1981, Magoon established Guenoc Valley as an American Viticultural Area -- the first single-winery appellation.

The winery has made some exceptional Cabernet Sauvignons and Chardonnays, along with red and white Bordeaux-style blends. But much of its current 120,000-case production consists of less-expensive varietal bottlings -- Cabernet, Chardonnay, Sauvignon Blanc, Petite Sirah -- that bear Lake County, North Coast or California appellations and are priced at $10 to $15.

Schochet declined to comment on the rumors of the sale of the winery, the possible involvement of Gallo, or who will be at the winery's helm after the Magoons' retirement.

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Check our ratings of Guenoc wines.

Read more about Guenoc Winery and Orville Magoon:

  • June 26, 2000
    Guenoc Sale to Stimson Lane Falls Through

  • Feb. 23, 2000
    Washington Wine Giant Agrees to Buy California's Guenoc Winery for $100 Million

  • March 4, 1999
    Guenoc Winery's Owner May Part with California Property

  • Oct. 15, 1997
    From Water to Wine: Former marine engineer Orville Magoon dreams of matching Lafite at his vast estate in California's Guenoc Valley
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