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From: lewis.perdue@wineindustryinsight.com

Subject: March Brand Winners & Losers, Cosentino Woes Mount.

Date: 2009-04-15 19:29:30

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WINE INDUSTRY INSIGHT

EMAIL EDITION - VOLUME I, NUMBER 81 - April 15, 2009


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IN THIS ISSUE:

  • Cosentino’s Financial & Legal Woes Gathering Serious Momentum

  • Sale/Leaseback Owners Shopping Cosentino’s Lodi, Pope Valley Wineries and Vineyards

  • IRI Data - Wine Brand Winners and Losers For March

  •  Not Such a G’Day: How Yellow Tail Crushed the Aussies

  • Marin Institute Publishes New Guide For Regulating Alcohol Advertising

  • E&J Gallo to launch male wine brand

  • GoBYO Helps Diners Find Corkage-Friendly Dining



WINE INDUSTRY INSIGHT NEWS FETCH

  • Sales of Napa Valley red wines come to a 'screeching halt'
  • Gallo: putting value before volume
  • Cold Snap Puts Wine Grapes at Risk
  • Connoisseurs skeptical about wine in a box
  • Champagne corks replaced by 'revolutionary' metallic capsule
  • Wine sales down, but rebound seen
  • Grape Identity Crisis in Australia
  • Australia Grape oversupply sparks call for grower unity
  • Brown-Forman adds manager
  • Delta farmers sue to block Delta canal plan
  • Lawsuits flow like water
  • Yarra winery bounces back from heat, fires
  • Cornell grape system adopted on West coast
  • Wine shipping bill advances in Tennessee Senate
  • Temecula: Encouraging sips; Discouraging Drunks
  • BYOB on rise at restaurants hit hard by recession
  • Central Coast Winery Project Snared in Mortgage Fraud Claims
  • NVV’S KORNELL SCOLDS LOUER
  • Under new ownership, Mondavi wines aren't what they used to be
  • New Trend? Wine Direct From Tank To Consumer
  • States Serving Up Alcohol Taxes to Patch Budgets, Pay for Treatment
  • Got Sheep? King Estate Winery wants 200 more
  • Willamette Valley Vineyards annual net income drops 58%
  • Constellation Brands' Andy Berk to retire


  • WINE INDUSTRY INSIGHT ORIGINAL REPORTING

    Sale/Leaseback Owners Shopping Cosentino’s Lodi, Pope Valley Wineries and Vineyards

    Entertainment Properties Trust (NYSE: EPR), is looking for buyers for Cosentino Winery’s Lodi and Pope Valley wineries and vineyards.

    The Kansas City sale/leaseback financier, which has played pivotal roles in a number of major fine-wine transactions (among them Ascentia, in Sonoma County and EOS Estate in Paso Robles)  was shocked when Napa Valley’s Cosentino Winery stopped making its lease payments this year and walked away from its commitments.

    Once owned by Cosentino Winery, the properties were sold to EPR on August 14, 2007 then leased back.

    (For specific information on the original sale price and lease payments, please see: Cosentino’s Financial & Legal Woes Gathering Momentum.)

    “RATIONALIISATION OF ITS OPERATING FACILITIES”

    On March 10, Cosentino Signature Wines PLC (MCOZ, LST) issued a statement that it had

    “[V]acated and returned three non-essential properties, along with certain equipment, that it had been leasing as the result of its August, 2007 sale and leaseback transaction at the Pope Valley, Lockeford and Clements locations, and has consolidated its Napa Valley operations into its fully owned Yountville facility and its Lodi operations into rented space in Woodbridge.

    “This move is part of a rationalisation of its operating facilities and in line with the Company’s strategy of improving operational efficiency and cost control as announced in December 2008.”

    POPE VALLEY WINERY AND VINEYARD

    The Pope Valley operation consists of three legal parcels in Napa County at 5270 Chiles Pope Valley Rd, St. Helena, CA. The property has:

    • 159.39 total acres including 76.34 net acres of vineyards.
    • A 3,674 sq-ft commercial winery facility with a 15,000-gallon annual use permit with approval for 100,000 gallons if improvements are made.
    • 1,600 sq-ft crush pad.
    • 1,216 sq-ft residence used as office and lab.
    • Two residences, 2,500 sq-ft and 1,728 sq-ft.
    • Water: Surface runoff stored in on-site reservoir (49 acre-feet capacity)
    • The property is assessed by the county at $7.16 million

    LOCKEFORD WINERY

    The Lockeford Winery consists of two legal parcels in San Joaquin County at 16750 E. State Route 88 approximately two miles from Lockeford, CA. The property has:

    • 29.52 total acres including 15.5 acres of old Zinfandel vines.
    • A 15,000 sq-ft commercial winery facility with a 99,000-gallon annual use permit.
    • 2,500 sq-ft crush pad.
    • 3,129  sq-ft barrel room.
    • 3,380 sq-ft Tasting room.
    • 1,200 sq-ft modular home.
    • Water: On-site pump and well
    • The property is assessed by the county at $2.38 million.

    In March 2007, before selling to EPR, Cosentino tried to sell the 19.5-acre parcel with the winery on it for $3 million.

    CRYSTAL VALLEY WINERY

    The Crystal Valley Winery consists of one legal parcel in San Joaquin County at 11715 N. Clements Rd. approximately four miles from Linden, CA. The property has:

    • 39.09 total acres
    • A 47,300 sq-ft commercial winery facility with a 182,000-gallon annual use permit.
    • 3,000 sq-ft crush pad.
    • 1,809 sq-ft mobile home.
    • Water: Two on-site pumps and wells
    • The property is assessed by the county at $4.71 million.

    In March 2007, before selling to EPR, Cosentino tried to sell the 19.5-acre parcel with the winery on it for $3 million.

    CONTACTS FOR INTERESTED PARTIES

    • Michael J. Rusche, Entertainment Properties, Inc., miker[at]eprkc.com
    • Mike Fisher. Global Wine Partners LLC, , (707) 967-5314, mfisher[at]globalwinebank.com

    MORE INFORMATION ON WINE INDUSTRY INSIGHT


    WINE INDUSTRY INSIGHT ORIGINAL REPORTING

    Cosentino’s Financial & Legal Woes Gathering Momentum

    The recent announcements from Cosentino Winery that it had abandoned most of its vineyards and wineries and defaulted on the interest payments due on $18 million in debt may be just a prelude to a gathering storm of lawsuits and financial crises.

    Wine Industry Insight’s examination of public records, court documents and securities filings show a company out of money and scrambling to keep its head above water.

    Among many issues, the records reveal:

    • At least nine current lawsuits in Napa County alone, including growers and mechanics liens.
    • An April 1 court judgment for $181,000 to a cork supplier.
    • More than $100,000 in overdue Napa County property taxes.
    • The unwillingness of its major creditor to renew its $18 million loan.
    • The company’s stock price in freefall.
    • Increasing losses and decreasing sales.

    VIP Subscribers click here to read the rest of the article.


    SUBSCRIBE NOW AND GET THE DETAILED SPECIFICS ON:
    • LAWSUITS, LIENS & JUDGMENTS PILE UP
    • COSENTINO WALKS AWAY FROM MILLIONS IN  LEASE PAYMENTS FOR WINERIES AND VINEYARDS
    • NAPA COUNTY PROPERTY TAXES IN ARREARS
    • COSENTINO STOCK IN FREEFALL
    • MALPRACTICE INSURANCE INVESTOR REFUSES TO RENEW $18 MILLION LOAN
    • SINKING SALES MAKE FOR MORE RED INK

    Subscribe now, get this article and everything else on the site every day, including the Data Cellar for just $9.99 per month or $115.88 per year. Click here for more details.


    WINE INDUSTRY INSIGHT ORIGINAL REPORTING

    Wine Brand Winners and Losers For March

    Data from Information Resources Inc. (IRI) shows that the four-week period ending March 22 brutalized a host of well-known names, leaving such formerly hot brands as Robert Mondavi, Turning Leaf, Smoking Loon, Gallo Family Vineyards and Pepperwood Grove with dollar sales declines of 20 to 40 percent.

    On the positive side, Wine Industry Insight’s custom analysis of the  IRI reveals that a number of mostly smaller, value-priced brands such as Bay Bridge Vineyards, Delicato Box, Oak Creek made huge inroads, gaining from 100 to 218 percent.

    VIP Subscribers click here to read the rest of the article.

    ALSO IN THIS ARTICLE:

    • Nearly half of top 100 brands lost sales
    • Big gain for the Winners
    • Mixed Results for the Top Ten Largest Brands

    SUBSCRIBE AND GET:

    • THE COMPLETE ARTICLE,
    • ENTIRE CHART,
    • ORIGINAL SPREADSHEET  WITH all the TOP 100 BRANDS

    Subscribe now, get this article and everything else on the site, including the Data Cellar for just $9.99 per month or $115.88 per year. Click here for more details.


    E&J Gallo to launch male wine brand

    The U.K.’s Morning Advertiser reports that E&J Gallo is to launch a new male-oriented wine brand into the UK market.

    The Redwood Creek brand is to be rolled out across both the on and off-trade markets after some success in the US, where it is a 2m case brand.

    It is targeted at 35 to 65-year-old men and will fill a gap in the market for a red wine oriented brand, said Iain Newell marketing director for Europe.

    “Following extensive consumer research we have developed a second premium wine offering from California, as we believe there is a gap in this area of the market,” he said.

    The initial range will consist of two reds, a Merlot and a Cabernet Sauvignon and one white wine, a Chardonnay.

    Read the whole article (free)



    Marin Institute Publishes New Guide For Regulating Alcohol Advertising

    Long-time alcohol industry adversary, The Marin Institute, has published a guide aimed at helping public policy makers restrict alcoholic beverage advertising on billboards and other “out-of-home (OOH) venues. The guide — aimed primarily at beer and spirits companies — is designed to help circumvent First Amendment protections on “commercial speech.”

    The guide is available here.

    INSTITUTE STATEMENT DETAILS STRATEGY AND GOALS

    In a statement posted on the advocacy group’s web site, the Marin Institute said:

    “Decades of research and common sense tell us that the more often youth are exposed to alcohol ads, the more likely they are to drink,” stated Marin Institute’s Research and Policy Director Michele Simon. “Marin Institute’s new guide offers new tools to local and state advocates and lawmakers to enact legally-defensible policies to protect youth from harmful messages that lead to problem drinking.”

    Out-of-home advertising encompasses traditional billboards, ads plastered on public transit vehicles, buildings and “street furniture” such as newspaper stands and kiosks, as well as new high-tech options like video display terminals, digital billboards, and ambient advertising. Spending on such advertising venues grew to over $8 billion dollars in 2008, with the alcohol industry being one of the largest purchasers.

    “These alcohol ads reach kids waiting in line at a grocery store, riding the bus to school, or walking to the library,” said Marin Institute Executive Director, Bruce Livingston. “They cannot be avoided by flipping a channel or turning a page. Nor can parents protect kids from them. Out-of-home ads are planting dangerous messages into the developing brains of a vulnerable captive audience.”

    Examples of current local and state alcohol advertising laws that can serve as models are offered, as well as an explanation of commercial speech and the First Amendment. The guide also describes the difference between public and private property and how advocates can push for legally-defensible laws in their communities.

    “For too long, the alcohol industry and media owners have claimed absolute free speech protection to their harmful message aimed at youth” added Simon. “This Guide dispels that myth and offers local communities viable options for protecting youth and others.”


    Not Such a G’Day: How Yellow Tail Crushed the Aussies

    Slate is reporting that the success of Yellow Tail has damaged the rest of the Australian wine industry:

    “A few years ago, Australian wines were the hottest around: Consumers couldn’t get enough of those strapping shirazes with the quirky names (the Mad Hatter, the Dead Arm, the Ball Buster) and the eye-catching labels. Across all price points, Australia was ascendant. Not anymore: Buyers who used to make a beeline for the Antipodean section of their local wine shops are today waltzing right past it. Depending on who’s doing the counting, exports of Australian wines to the United States fell by 15 percent to 26 percent in value last year; whatever the precise figure, the arrows are all pointing sharply downward, and with retailers paring back their Aussie selections in response to the flagging demand, this year threatens more of the same. Foster’s may be Australian for beer (mate); it appears that screwed is now Australian for wine.

    “To be sure, vintners everywhere are struggling on account of the global economic crisis, and Australia has been hit especially hard by the gyrations in the financial markets. The Australian dollar surged to a 25-year high against the U.S. dollar last summer, which was a big headache for a wine industry heavily dependent on sales abroad. Unremittingly severe weather has also had devastating consequences. Droughts have ravaged parts of Australian wine country. The recent heat wave and wildfires in Victoria destroyed wineries and damaged a number of vineyards, with as much as 70 percent of the crop lost in some areas. But while the Australians have been victimized by a run of bad luck, their woes are mostly self-generated; they’ve trashed their own brand, a point many of them now concede.”

    Read the rest of the article.(free)


    GoBYO Helps Diners Find Corkage-Friendly Dining

    A new website, GoBYO.com says that more than 15,000 restaurants in ten major regions permit customers to bring their own wine. The site surveyed dining establishments in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, Philadelphia, San Francisco, Southeast Florida and Washington/Baltimore and now offers an online database where consumers can search for BYO-friendly spots.

    The database offers searches by Zip Code, food and a number of other characteristics such as a children;’s menu, WiFi, pet-friendly and more. The site, owned by DiningInfo LLC of Philadelphia, also provides links to state BYO regulations, wine forums and more.

    “We surveyed more than 50,000 restaurants and discovered a distinct upward trend in BYO-friendly dining establishments, identifying over 15,000 that now allow diners to bring their own wine,” said Devon Segel, DiningInfo CEO. “A significant finding of our latest survey was that a substantial number of restaurants with liquor licenses are now competing head-on with pure-BYO restaurants. This is good news for both wine lovers who enjoy bringing a favorite bottle of wine, as well as budget-conscious consumers.”





    ================= CONTACT DATA ====================
    Lewis Perdue
    670 W. Napa St., Suite H, Sonoma, CA 95476
    Phone: 707-326-4503, fax: 707-940-4146
    Email: lewis.perdue@wineindustryinsight.com