July 23, 2008

Chateau Montelena SOLD (Going once, going twice...)



Chateau Montelena was sold today to the French Estate Chateau Cos d'Estornel. The price of this deal is unclear, but according to the Wine Spectator, Montelena fielded offers between $120 and $150 million for this Napa winery and vineyards.

Some of my colleagues reacted with disgust as I shared the news with them. For the US to be selling out to the French...it was so....unpatriotic!

I disagree. This is not the first major winegrower to sell out to a European wine house. Last year Stags Leap Winery was sold for $185 million and Duckhorn for $250 million or more. This is the start of a trend.

Montelena and Stags Leap wines emerged well ahead of all other US winemakers in 1976. There was a competitive wine tasting in Paris, now referred to as "the Judgement of Paris" where French judges named Chateau Montelena's 1973 Chardonnay as superior to all of the hallowed French Burgundy producers. Everyone was shocked, the French unpleasantly so and the Americans ecstatic. This put American wines on the map.

This is such a compelling story that Hollywood took notice. In January, during the Sundance Film Festival, "Bottle Shock" was premiered telling the Montelena story. There have been some notions that "Bottle Shock" will increase Montana's profile in the same way that the movie "Sideways" did for Pinot Noir. Although not yet released in theatres, you can bet that Cos d'Estornel will be more then willing to fund its distribution.

The more important economic issue here has nothing to do with our domestic wine gems being sold. It has to do with America's addiction to borrowing. We have long been the worst savers in the world. Our economic growth and innovation has allowed us to stay on top for a very long time. The global economy though, is starting to catch up.

The dollar, long the benchmark currency in the world, is being supplanted by the Euro. The dollar and all assets valued in dollars are down right cheap. Lets just say that America is "On Sale". Just last week we saw Anheuser -Busch, parent company of the iconic American "Budweiser" brand, sold to the Belgian brewer Ambev. These deals are only the first of many American brands that will be sold.

We have to change our culture in the United States from spend to save. Our complaints regarding the price of oil, gold and other commodities are falling on deaf ears outside of the US. The dollar is no longer the currency of choice.

For my part, I am going to continue to find wines that provide superior value and quality. The wines are out there and the winemakers are looking to be discovered. I am going to pass on the big name wines for which we pay for reputation more then substance. I would encourage all of you to do the same.





Congratulations to Jim and Bo Barrett, owners of Chateau Montelena and America's newest multi-millionaires!



9 comments:

  1. I happened to see Bottle Shock at Sundance and it is definnitely a love letter of sorts to all California vintners, and Jim and Bo Barrett especially. The movie is actually very touching and funny. My husband and I loved it. Incredible performances by Alan Rickman and a good job by newcomer Chris Pine as Bo Barrett. If you're interested, check out the trailer at www.bottleshockthemovie.com. After seeing this film, I'll be sad to see Chateau Montelena change hands...

    ReplyDelete
  2. Karen, Thanks SO much for the comment. It is always nice to have someone take the time to respond. I can't wait to see the movie. I am hoping it makes it to the DC are theatres in the Fall.

    Please continue to read the reviews, there is a great Australian value reviewed tomorrow....and I look forward to your continued participation! Cheers! WineGent

    ReplyDelete
  3. Here, Here! Great Blog and well said! Can't wait for the movie to come out! Glad to have the honor of finding your site! -- Best, Jennifer

    ReplyDelete
  4. Trailer does looks great. Alan Rickman is very funny. I'm excited to see this! Winegent, the website is pretty informative about when the movie will be opening in different cities. It also has a sweepstakes for a free trip to Los Angeles to dine and wine on all Napa has to offer. I signed up...I hope I win!!

    ReplyDelete
  5. Trailer looks great! Alan Rickman is very funny. I'm excited to see this. Winegent, the website is pretty informative about when the movie is opening where... There's also a link at the website to win a trip to LA to wine and dine on all Napa has to offer. I signed up...I hope I win!

    ReplyDelete
  6. I saw the movie Bottle Shock recently at Sundance, and it is kind of sad that the winery is being sold, I really loved the personalities of the actors in the movie, and it's a little bit like im losing the winery as well. Great movie though.

    ReplyDelete
  7. Yes, it is always sad to see an institution such as Chateau Montelena sold. It is a sign of the times.

    I would prefer to see the glass as "Half Full". The buyer is a fabulous French winemaker and may actually change the wine for the better. Only time will tell. Thanks so much for the comment!

    ReplyDelete
  8. Also bear in mind that they probably purchased Ch. Montelena because they like what that team has been producing. I am going to assume that they understand the value of 'if it ain't broke, don't fix it.' If the winemaker and viticulture team stays the same, we will probably be enjoying the same great wines that we always have. If there are some changes made, then maybe they will make it even better?

    ReplyDelete
  9. Lisa and James7/8/08 08:30

    Hello Gerry:
    My girlfriend and just got home from seeing "Bottle Shock" at its opening night here in Los Angeles. I'm new to the wine market, however, very enthusiastic about learning. My girlfriend is very knowledgeable about the wine market and buys wine on a very regular basis. I've read your blog and didn't know until tonight after the film that Chateau Montelena has been sold to the Frenchies. How ironic after the film. I'm from Australia and that just makes it worse. They happen to adversaries not only in the wine market but, rugby adversaries as well. You have a brilliant website. It will be great to learn from your knowledge.

    Cheers,

    Lisa and James

    ReplyDelete

Please enter comments here. Thank you.