Concha y Toro Buying Fetzer for $238 Million

Choosing spirits over wine, Brown-Forman sells to top Chilean producer
Mar 2, 2011

In a deal worth $238 million, Chilean wine giant Concha y Toro is buying Fetzer Vineyards, one of the largest wine brands in California, from Brown-Forman Corp.

The deal, announced Tuesday, includes Fetzer and affiliated brands Bonterra, Little Black Dress, Jekel, Five Rivers and Bel Arbor, which annually produce about three million cases and $156 million in net sales combined. Also included in the deal are 1,060 acres of vineyards in Mendocino County, a bottling facility as well as large winemaking plants in Hopland and Paso Robles.

The deal doesn’t include Sonoma-Cutrer, Brown-Forman’s popular Chardonnay restaurant brand, nor does it affect Brown-Forman’s longstanding sales, marketing and distribution agreement with California sparkling wine house Korbel.

Concha y Toro CEO Eduardo Guilisasti called it the largest acquisition in his company’s history. “We believe that this transaction opens additional growth opportunities globally, as well as in the American market,” he said.

Brown-Forman, a Kentucky-based spirits powerhouse best known for Jack Daniels whiskey, purchased Mendocino-based Fetzer from the Fetzer family in 1992 for a reported $82 million.

Wine and whiskey were never an easy fit and while profit margins for spirits remain strong, Brown-Forman management has been disappointed by sluggish wine sales in recent years and began shopping Fetzer in 2010. “Our company and our shareholders are best served by redirecting our resources to those opportunities around the world which offer stronger growth and higher returns on invested capital,” said CEO Paul Varga, in a statement.

While “other parties” expressed interest, company spokesman Phil Lynch said, Brown-Forman ultimately settled on Concha y Toro for three reasons: the $238 million price tag, the South American company shared Fetzer’s commitment to organic and sustainable wine growing and it expressed a determination to keep most of the 240 employees affected by the sale. “That was very appealing to us,” Lynch said.

Founded in 1968, Fetzer has been a leading brand in the value price points of $8 to $15, and its Bonterra label is a dominant player in the budding organically grown wine market. Concha y Toro’s history dates to 1883 and it is one of Latin America’s largest producers. Its brands include Don Melchor, Almaviva and Casillero del Diablo.

The transaction is subject to regulatory approval but is expected to close in April.

Winery Purchases and Sales Chile United States California News

You Might Also Like

The Restaurant at Meadowood Returns with Pop-Up at Ojai Valley Inn

The Restaurant at Meadowood Returns with Pop-Up at Ojai Valley Inn

The Napa Grand Award winner that suffered devastating wildfire damage is back for a …

Feb 25, 2021
Napa's Duckhorn Files Papers to Go Public with Stock Offering

Napa's Duckhorn Files Papers to Go Public with Stock Offering

The growing premium wine company, which owns brands from Decoy to Kosta Browne, made a …

Feb 23, 2021
Penfolds' Peter Gago Talks Blending California and Australia

Penfolds' Peter Gago Talks Blending California and Australia

The veteran chief winemaker discusses the new California wine project and what the Aussie …

Feb 22, 2021
Could a Key Ingredient in Red Wine Help Treat COVID-19?

Could a Key Ingredient in Red Wine Help Treat COVID-19?

In lab tests, tannins stopped an enzyme that the coronavirus uses to replicate

Feb 18, 2021
Screaming Eagle Magnums and Opus One Imperials: Napa Valley Vintners Online Auction Offers Rare Bottles

Screaming Eagle Magnums and Opus One Imperials: Napa Valley Vintners Online Auction Offers Rare Bottles

The nonprofit's inaugural library wine auction offers once-in-a-lifetime lots from Napa's …

Feb 18, 2021
Tennessee Legislators Aim to Limit Winery Direct Shipping Sales

Tennessee Legislators Aim to Limit Winery Direct Shipping Sales

Lawmakers propose banning winery direct shipping through fulfillment houses, which handle …

Feb 17, 2021