Mondavi puts La Famiglia winery on market

Mondavi puts La Famiglia winery on market News Wine News
  • Tuesday 21 August 2001

Shortly after selling its Languedoc-based Vichon Mediterranean subsidiary, Robert Mondavi Winery has put Vichon's old home in Napa Valley on the market.

The reported asking price for its La Famiglia di Robert Mondavi winery is US$20m (£14m) – and that could be a bargain for a wine company anxious to break into prestigious Napa Valley.

Mondavi bought Vichon in 1985, then converted the facility to produce its California-Italian varietal La Famiglia label when it moved Vichon to France in 1998.

Mondavi's executive vice president and chief financial officer Henry J Salvo said the winery wasn't needed for La Famiglia, which sells less than 50,000 cases a year from grapes grown primarily outside Napa Valley. The company will now produce the wines at other facilities, the reds at Mondavi's nearby Oakville facilities, the whites at leased space in California's Central Coast.

He adds, 'The Cal-Ital segment isn't growing at the pace it needs to. To grow, we need to reduce costs, not burden the brand with an expensive Napa facility.'

La Famiglia, however, is more than a production facility. It has permits for public tastings and retail sales, which are no longer allowed for new wineries in Napa Valley. The permits also let it make wine from non-Napa grapes, a practice now forbidden for new wineries, which must use at least 85 per cent expensive Napa fruit. The facility – and its permits – would be an ideal foothold for a winery seeking to upgrade its image.

Without the distraction of Vichon and La Famiglia, Mondavi can now devote more attention to a likely winner, its joint venture with Australia's Southcorp/Rosemount. 'Australia and its wines have great potential for us,' says Salvo. And the company has had to invest little in the venture, which uses existing vineyards and production facilities to produce a line of jointly marketed wines from California and Australia. Mondavi and Southcorp have each pledged $8m (£5.53m) each over six years to develop and market super-premium (US$15/£10.35) and luxury (more than US$75/£52) labels.

'The wines are in the barrel, and the first ones will be released next year,' says Salvo. Southcorp will market the California wines worldwide, while Mondavi will sell the Australian wines everywhere except there and in New Zealand.

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