Gallo signs new Rioja deal for the US

Wine giant E&J Gallo has signed an exclusive distribution deal with co-operative producer Bodegas El Patrocinio.

The agreement – the terms of which have not been revealed – was brokered by Martín Códax, the Galician producer which has seen its US sales soar since signing a similar deal with Gallo in 2005.

The volumes involved in the new distribution agreement have not been revealed, but El Patrocinio is currently building a 2,000sq m extension to its winery to cope with the anticipated increase in demand. The extension is reported to include extra maturation and bottling space.

El Patrocinio is a co-operative based in Uruñuela in Rioja Alta, and has 200 members who own about 600ha of vineyards. It is believed that it will also source grapes from outside its existing grower base to boost production in response to demand from Gallo.

US sales of Martín Códax wines in 2007 are projected to show an increase of up to 1.5m bottles on last year after the company shipped 600,000 bottles in the first quarter alone.

Gallo sells the Rias Baixas-based producer’s trademark aromatic Albariño white wine, as well as its own Rioja, sold in the US under the Martín Códax Ergo name.

Strong demand for the latter prompted Gallo to ask Martín Códax to source greater quantities of Rioja to capitalise on its success.

Written by Richard Woodard