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08.02.2013  
 

Araujo Winery Acquisition Ups French Stake

Purchase of Napa vineyard by Chateau Latour owner estimated at more than $100 million

 
by Paul Franson
 
 
araujo
 
Artémis Group's purchase of Araujo Estate in Calistoga, Calif., includes 38-acre Eisele Vineyard.
Calistoga, Calif.—Araujo Estate Wines, the cult producer of wines from Eisele Vineyard in Napa Valley, has been acquired by France’s Pinault family through its holding company the Artémis Group, parent company of Château Latour in Bordeaux, Domaine d’Eugénie in Burgundy and Château Grillet in the Rhône Valley.

The purchase includes the 38-acre Biodynamic and organically farmed Eisele Vineyard, the winery and cave complex, the Araujo Estate brand and existing inventory. The purchase price was not disclosed but is estimated by informed sources to be worth more than $100 million.

The most recent comparable deal might be the $40 million a Chinese executive paid in late 2011 for the 600-case Sloan winery and vineyard that included 12 acres of hillside vineyards but not the brand. Those wines typically sell for $600 per bottle.

Robert Nicholson, who specializes in mergers and acquisitions in the wine business at his International Wine Associates, recently handled the large sale of Mayacamas Vineyards to a former owner of Screaming Eagle, one of the most expensive Napa wines. “Very few transactions of this magnitude occur,” Nicholson said. “It validates the efforts of Napa Valley vintners to produce world-class wines, but don’t expect a rush of other such deals.”

It’s the first outright buy of a top Napa estate by prominent French wine interests in recent memory. That the purchase was made by a company that also owns Chateau Latour, one of the five coveted and collected first-growth estates in the Medoc & Graves sections of Bordeaux, makes it all the more attention-getting. Yet it follows a long history of California winery startups backed by French money, including the creation of Domaine Chandon, Opus One (with its own first-growth connection via Chateau Mouton-Rothschild) and Dominus. More recently, French vintner Jean-Charles Boisset has made numerous California winery acquisitions.

Araujo home for 23 years
Artémis bought the property from Bart and Daphne Araujo, founders of the winery. “The Artémis Group is the perfect buyer of this amazing vineyard we have called home for 23 years,” Bart Araujo said in a news release. “The rich heritage of Château Latour and its other wine properties, combined with the family’s passion for the wine business, absolute commitment to excellence and extraordinary track record of success, assures that the stewardship of Araujo Estate and the Eisele Vineyard will continue with the best of care and intentions.”

Frédéric Engerer, CEO of Chateau Latour, added, “Araujo Estate and its jewel, the unique Eisele Vineyard, have been producing consistently one of the very best wines of Napa Valley.”

The North American staff including the winemaking team will remain with the estate, according to Araujo.

Bart and Daphne Araujo will stay at Araujo Estate until January to assist in the transition. They bought the 162-acre property under the Palisades southeast of Calistoga in 1990. It was first planted to vines in 1884 and has long produced famed wines bottled by such wineries as Joseph Phelps Winery and Conn Creek Vineyards, before Araujo.

The 2009 Eisele Vineyard Cabernet Sauvignon has a list price of $305. By contrast, the 2009 Latour is typically sold for $1,500 and above. The winery also makes Altagracia Cabernet partly from purchased grapes, Eisele Vineyard Syrah and Eisele Vineyard Sauvignon Blanc. A Eisele Vineyard Viognier is bottled during some years. The winery has a production permit for up to 8,333 cases.

A French whirlwind
The biggest other recent French buys in California have been by Jean-Charles Boisset, whose French family wine empire acquired DeLoach, Raymond, Buena Vista, Lockwood and Lyeth. They also started some other California brands like French Rabbit and JCB, and have extensively updated the properties and wines.

The flamboyant and marketing-savvy Frenchman married Gina Gallo of the E. & J. Gallo Winery family, and they bought the knoll-top home of the late Robert Mondavi and Ma rgrit Biever Mondavi.

The French have always had a strong influence on California’s wine industry, however, both in the first wave of immigration in the mid 1850s, and in the second wave of the past few decades.

Frenchmen Antoine Delmas, Charles Lefranc and Pierre Pellier were early leaders in Santa Clara Valley’s wine business, and Burgundian Paul Masson started making wine there in 1854. Pellier planted varietal grape cuttings he’d brought from his native France. In 1881, his daughter Henrietta married a neighboring vintner, Pierre Mirassou.

The sixth generation of the Mirassous are the oldest dynasty in California still in the wine business. Steven Kent Mirassou operates La Rochelle and Steven Kent wines, though the family sold the Mirassou brand to Gallo.

Other prominent historic French wine figures include Georges de la Tour, who founded Beaulieu Vineyard in Napa Valley in 1900. He hired enologist André Tchelistcheff, the biggest influence on winemaking in Napa Valley, in 1938. Tchelistcheff was Russian born but French educated, and he brought fine winemaking practice to Napa Valley.

Domaine Chandon turns 40
The action in the last few decades has been particularly concentrated in Napa Valley, where French corporations and individuals own many important wineries and vineyards, and French vintners and winemakers are also prominent in American firms.

In 1973, Domaine Chandon was the first sparkling wine producer outside Champagne to be established by a French firm using only the traditional method of producing sparkling wine. This year Domaine Chandon is celebrating its 40th anniversary. Domaine Chandon owns about 1,100 acres of vineyards in Carneros, Mt. Veeder, Yountville and Lakeville in Sonoma County, making it one of the largest vineyard owners in California’s North Coast.

Domaine Chandon’s parent company, LVMH, also owns Newton Vineyard, a St. Helena producer of fine wines.

Another California sparkling wine producer is Domaine Carneros, owned by Champagne Taittinger. Mumm Napa was started by Champagne Mumm with Seagram. Dominus in Yountville is owned by Christian Moueix, proprietor of famed Chateau Pétrus in Bordeaux. It also makes a second wine, Napanook, named after the venerable vineyard once owned by John Daniel of Inglenook.

Opus One is the pioneering joint venture between the late Robert Mondavi, founder of Robert Mondavi Winery, and the late Baron Philippe de Rothschild, proprietor of first-growth Chateau Mouton Rothschild in Bordeaux. It produces the signature wine at its distinctive winery and tasting room on Highway 29 in Oakville. The winery is now half owned by Baroness Philippine de Rothschild  and Constellation Brands, which bought Robert Mondavi Corp.

St. Supéry Winery in Rutherford is owned by Robert Skalli, a third-generation French winemaker whose family came from Algeria. He is now one of Napa County’s biggest landowners, with vineyards both in the heart of the valley and in remote Pope Valley, part of the Napa Valley American Viticultural Area.

Marketta and Jean-Noël Fourmeaux, started Chateau Potelle in 1980 after visiting Napa Valley as wine tasters for the French government. After six months however, they decided to stay. They returned to France, packed up their two daughters and moved to California in 1983. In 1988, they purchased 202 acres on Mount Veeder, where Marketta made the highly regarded wines.

They divorced, and sold the property to Jackson Family Wines, but both remain in the wine business, Jean-Noel with the VGS Chateau Potelle brand, and Marketta with small Marketta Winery in Napa, which makes Handcrafted by Marketta wines.

Beaucanon Estate, owned by the de Coninck family of Bordeaux, sold its prominent winery and small vineyard on Highway 29 in Rutherford to the Chalone Wine Group, which was acquired by Diageo. The company, however, kept its best vineyards, which are located off the Silverado Trail near Napa, and have built a winery for the brand there.

Aubert de Villaine of Burgundy’s Domaine de la Romanée-Conti created a partnership with Larry Hyde, of Hyde Vineyards in Carneros, to produce a Chardonnay and a Merlot-Cabernet blend. The venture is called HdV, for the Hyde and de Villaine families. De Villaine’s wife, Pamela Fairbanks de Villaine, is Larry Hyde’s first cousin. Both Hyde and Fairbanks descended from José de la Guerra, the son of a noble S panish family that settled in Santa Barbara, Calif., in 1810.

French winemakers multiply
Many French winemakers have made their mark in the U.S. wine business. A partial list includes Bernard Portet, formerly of Clos Du Val, Philippe and Cheri Melka, Stéphane Derenoncourt, Luc Morlet and Nicholas Morlet, Pierre Seillan at Verite, Gilles Nicault at Long Shadows in Walla Walla, Wash., Pierre Birebent at Signorello, Francois Bugue at Cain Vineyard and Winery, Jerome Chery at Saintsbury, Ludovic Dervin at Mumm Napa, Antoine Favero at Mazzocco-Matrix-DeLorimier, Julien Fayard, Nathalie Jure at Opus One, Franck Lambert at Watts Winery and Arnaud Weyrich of Roederer Estate. French wine consultant Michel Rolland also works with many California wineries.

Not all the French influence is in Napa, however. What is now Laetitia Vineyards on California’s Central Coast was started as Maison Deutz, and what is now J Vineyards & Winery in Sonoma County was once Piper Sonoma, the U.S. arm of Piper Heidsick. Both firms overestimated the demand for sparkling wines and eventually sold their operations.

More successful was Roederer Estate in Anderson Valley in Mendocino County, which makes some of California’s best sparkling wine in that cool valley. Nearby Scharrfenberger Cellars, which makes Pacific Echo sparkling wines, is owned by Roederer and managed by Maisons Marques & Domaines, its marketing arm

In Oregon, Domaine Drouhin is owned by Joseph Drouhin of Burgundy. Paul Pontallier of Chateaux Margaux has a winery on Long Island in New York.

French involvement is not limited to wine production; many industry supplier companies operating in the United States are French-owned or managed. The French Association of Wine Executives-USA includes both production and supplier executives who are French-born. Jacques Brix of Wines & Vines (email him here) is its president.

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