In yet another instance of American and Australian wine companies joining forces to go global, Robert Mondavi Winery and Rosemount Estates have announced a 50-50 joint venture to produce and market two new lines of California and Australian wines.
The deal comes just two months after Foster's Brewing Group of Australia, which owns Mildara Blass Wines, purchased Beringer Wine Estates, in Napa Valley, for a record $1.5 billion. Mondavi was among the other prominent California wine companies widely expected to follow suit with their own global alliances.
Other U.S. companies that have recently entered into partnerships with Australian companies include Stimson Lane Vineyards & Estates -- owner of Villa Mt. Eden in Napa Valley and Chateau Ste. Michelle and Columbia Crest in Washington -- which teamed up with Petaluma Vineyards to produce the Bridgewater Mill line.
The Mondavi-Rosemount venture will require little in the way of initial capital investment. While total production should start off at well over 100,000 cases, the wines will be made at existing Mondavi and Rosemount wineries. Until the new venture develops its own vineyards, grapes for its first vintages will be sourced primarily from the companies' vineyards in California and Australia, though some will be purchased from other growers.
"We've been looking at Australia for a couple of years now," said Michael Mondavi, president and CEO of Robert Mondavi Winery, based in Napa Valley. "We were there in the early '70s with Leeuwin, and in the last couple of years, [we] thought it was time to go back."
Rosemount, founded in 1969 by Robert Oatley, is currently the second best-selling Australian brand in the United States, according to Impact Databank. It is Australia's largest family-owned winery, with production facilities in the Hunter Valley and McLaren Vale and vineyards in several other districts, including Coonawarra and Adelaide Hills.
The idea for the joint venture originated about a year ago, in casual conversations between Michael Mondavi and Keith Lambert, CEO and deputy chairman of Rosemount. "The more we thought about it, the more we realized what a good fit it was," said Lambert. "We're a family winery, and [Mondavi is ]still essentially a family winery." The two signed letters of intent today in California and expect to wrap up the deal before the end of the year.
Mondavi will sell the joint venture's Australian bottlings worldwide, and Rosemount will sell the California line worldwide. "The idea is to create a global company," said Lambert. "It gives us an entrHe into marketing California wines in Australia, and Mondavi has an entrHe to market Australian wines in the United States. We can also learn from each other."
The as-yet unnamed venture will make its first wines from the 2000 vintage in California and the next Australian harvest, in spring 2001. Current Mondavi and Rosemount winemakers Tim Mondavi and Philip Shaw will oversee production. The first wines are not expected to reach the U.S. market until fall 2002.
The partners plan to make a selection of varietal wines at three price levels: $14, $40 and $100. Production of the luxury wines, probably an Australian Shiraz and a California Syrah blend, should begin at 1,000 cases and eventually grow to 5,000 cases, said Mondavi.
This will be Robert Mondavi Winery's fifth joint venture. The company is currently a partner in Opus One, in Napa Valley, with Baroness Philippine de Rothschild. In Italy, Mondavi also produces Luce, Lucente and Danzante with Marchesi de Frescobaldi; in Chile, it makes SeRa and Caliterra with the Eduardo Chadwick family of ViRa Errazuriz. Mondavi also recently purchased a minority interest in Tuscany's Tenuta dell' Ornellaia, producer of the famed Ornellaia and Masseto wines.
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