Vintage Wine Estates Buys Cameron Hughes Wine for $5.5 Million in Bankruptcy Court

The brand, known for sourcing high-quality excess wine, will continue with a new owner
Vintage Wine Estates Buys Cameron Hughes Wine for $5.5 Million in Bankruptcy Court
Hughes built a loyal following among Costco customers nationwide. (iStock/marcusamelia)
Jan 12, 2017

Updated, Jan. 18, 2017.

Cameron Hughes Wine Inc. has a new owner, saving the négociant firm from bankruptcy. Vintage Wine Estates purchased the company founded by Cameron Hughes as part of a bankruptcy court settlement this week. The Santa Rosa, Calif., firm emerged as the winner in a blind auction, agreeing to pay $5.5 million in a deal expected to be finalized within weeks. The proceeds will largely go to pay off Hughes Wine's debts with Union Bank.

Hughes became a prominent name in the California wine industry during the global wine glut of the past decade. Recognizing that even premium wineries had excess wine, his company bought the wine in bulk, blended and repackaged it under its own label, in various limited series of "lots" and sold it at a discount. A deal with Costco put the wines in front of a loyal customer base who liked the price and quality.

But when the excess juice dried up, so did Hughes' business. While the company developed a solid direct-to-consumer sales program, it wasn't enough to stay afloat. On March 24, 2015, the Superior Court of San Francisco placed the company in receivership.

"The decision to buy Cameron Hughes is really because our business model is very complementary to what they do," Vintage Wine Estates president and CEO Pat Roney told Wine Spectator. "The purchase really elevates our direct-to-consumer channel with this addition of specialized, small-lot portfolio wines that we are happy to offer to our customers … and we have a lot of great wines in our portfolio of wineries that we can offer to the Cameron Hughes customers, as well."

Roney asserts that operations will basically be "business as usual" for the company. According to Roney, both Hughes and his wife, Jessica Kogan, have agreed to stay with the company for now.

"Given the unique identity of Cameron [Hughes Wine], our intention is to operate it as a standalone company," Roney said. "We're going to continue to focus on delivering the exclusive offerings that Cameron Hughes is known for, and we intend to keep agreements that are in place as well as leverage our own business to get even more access to high-quality vineyards and wines." He noted that Vintage is already familiar with Cameron Hughes' business model. "We used to do their back-end warehousing for them about four or five years ago."

Additionally, Roney plans to retain and build upon other aspects of Cameron Hughes Wine, including its relationship with Costco. (Vintage already sells wines through its private label, Kirkland). SalesPro, the in-store marketing business that operates within Cameron Hughes Wine, is also safe, according to Roney. "With new financial resources behind it, we think that it is an important segment of the business for us and that will continue to grow," he said.

Now the 17th largest wine company in the U.S., Vintage owns a collection of wineries—its most recent addition being St. Helena-based Delectus Winery and Vineyards. Roney said the firm has plans to expand further in the coming months, citing wineries in Oregon, Washington and Paso Robles as potential acquisition targets.

An earlier version of this story reported the wrong purchase price.

Winery Purchases and Sales News

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