s
s
Sections
You've read 3 of 10 free articles this month.
Get unlimited access to PressDemocrat.com, the eEdition and our mobile app starting at 99 cents per month.
Already a subscriber?
You've read 6 of 10 free articles this month.
Get unlimited access to PressDemocrat.com, the eEdition and our mobile app starting at 99 cents per month.
Already a subscriber?
You've read all of your free articles this month.
Get unlimited access to PressDemocrat.com, the eEdition and our mobile app starting at 99 cents per month.
Already a subscriber?
We've got a special deal for readers like you.
Get unlimited access to PressDemocrat.com, the eEdition and our mobile app starting 99 cents per month and support local journalism.
Already a subscriber?
Thanks for reading! Why not subscribe?
Get unlimited access to PressDemocrat.com, the eEdition and our mobile app starting 99 cents per month and support local journalism.
Already a subscriber?
Want to keep reading? Subscribe today!
Ooops! You're out of free articles. Starting at just 99 cents per month, you can keep reading all of our products and support local journalism.
Already a subscriber?

Fetzer Vineyards, Mendocino County's largest winery, will be sold for $238 million to a Chilean wine company eager to expand its presence in the United States.

Brown-Forman Corp., a Kentucky spirits conglomerate that has owned the Hopland winery for almost two decades, announced a deal Tuesday to sell Fetzer and related brands to Vi? Concha y Toro S.A.

The sale will place Fetzer in the hands of a 128-year-old company that focuses exclusively on wine

"They (Concha y Toro) know the wine industry," industry analyst Jon Fredrikson said. "They're trying to reach out and expand their interests in the U.S. This is their kind of brand. It's their kind of price point."

Brown-Forman, best known for Jack Daniels whiskey, purchased the winery in 1992 from the Fetzer family and expanded production by sourcing grapes from across California. Two members of the Fetzer family expressed hope Tuesday that the winery's new owner will purchase more grapes from local growers.

"I think that's the big one, having the possibility of having more Mendocino fruit" in Fetzer wines, said Daniel Fetzer, now the owner of Jeriko Estates winery near Hopland.

John Fetzer, the company's former chief executive, was quick to praise Brown-Forman for its stewardship of the Fetzer brand and for the corporation's contributions to Mendocino County. But many spirits companies "are struggling with their wine brands and shedding them," he noted.

"It's a different animal than spirits," said Fetzer, who now owns Saracina Vineyards winery near Hopland.

The deal announced Tuesday includes the Fetzer winery, bottling facility, and vineyards in the Hopland area, where it employs 240 workers. It also includes a production facility in Paso Robles and more than a half-dozen affiliated brands, including Bonterra, Little Black Dress, Jekel, Five Rivers, Bel Arbor, Coldwater Creek and Sanctuary.

The sale does not include Sonoma-Cutrer, Brown-Forman's chardonnay specialist in Sonoma County, or the company's distribution relationship with Korbel California Champagnes in Guerneville.

Founded in 1883, Vi? Concha y Toro S.A. is the leading producer of wine in Latin America. It owns 23,500 acres of vineyards and exports its wines to 135 countries. Its brands are marketed at a variety of price points, from the top of the range Don Melchor and Almaviva to its flagship brand Casillero del Diablo.

The Fetzer acquisition represents the largest winery transaction in the company's history, Concha y Toro CEO Eduardo Guilisasti said in a statement.

"We believe that this transaction opens additional growth opportunities globally, as well as in the American market, with its main brands Fetzer and Bonterra," Guilisasti said. "We further intend to incorporate the culture of excellence and commitment of the great team at Fetzer who have created exceptionally strong consumer brands."

Fetzer is one of the 10 largest wine brands by volume in the United States, selling more than 3 million cases annually. It rang up $156 million in sales last year, according to Brown-Forman.

Fetzer was an early pioneer in the development of sustainable farming and business practices. Under Brown-Forman, its Bonterra line became the nation's largest premium organic wine brand, selling more than 300,000 cases annually.

As a result of the acquisition, Concha y Toro will nearly double its U.S. wine sales to almost 6 million cases a year, Fredrikson said.

The deal, he said, comes at a time when wine sales are rebounding nicely in Fetzer's general price range — under $14 a bottle.

"People are looking at value wines and Fetzer's a value wine," Fredrikson said.

In December, Brown-Forman announced it was exploring strategic alternatives for its California wine assets, including a possible sale.

Brown-Forman chief executive Paul Varga said in a statement Tuesday that officials "concluded that 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."

The sale is expected to close in April. It is projected to increase Brown-Forman earnings by 20 cents to 30 cents per share.

The deal was announced after U.S. financial markets had closed. Earlier Tuesday, Brown-Forman stock slipped to $68.50 a share, down 54 cents on the New York Stock Exchange. Vi? Concha y Toro stock rose to $42.25, up 60 cents on the New York Stock Exchange.