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$14.1-Million Deal Takes Distiller From Wine Market : S.F. Firm to Buy Glenmore Distilleries Winery

January 28, 1988|DAN BERGER | Times Staff Writer

Glenmore Distilleries Co. has agreed to sell its Corbett Canyon Winery in San Luis Obispo for $14.1 million to Wine Group Ltd., a San Francisco-based company that is the nation's fourth-largest producer and marketer of wine products, Glenmore said.

The move continues the trend of distillers leaving the wine business that began earlier this decade. At one time, more than a half dozen major U.S. distillers owned winery operations. That number has now dwindled.

Glenmore, based in Louisville, Ky., entered the wine business when it bought the former Lawrence Winery in 1981 and changed the name to Corbett Canyon.

The Wine Group is a limited partnership headed by Art Ciocca that produces Franzia table wines, 20/20 Wine Cooler, Tribuno Vermouth, Summit wines (in a bag-in-a-box package) and Mogen David kosher wines.

Glenmore announced earlier in the month that it had sold Corbett Canyon to Jess Jackson, a San Francisco attorney and the owner of the Kendall-Jackson Winery in Lakeport, Calif. That deal fell through a week ago. A spokesman for Jackson said it was because some grape contracts couldn't be transferred.

The sale of Corbett Canyon left Jos. Seagram and Sons and Hiram Walker (a division of Allied-Lyons of Great Britain) as the only remaining distilling companies with major holdings in the California wine business. (Moet-Hennessey of France, also a distiller, owns Domaine Chandon, the Napa Valley sparkling wine producer.)

The only wineries still in distillery hands market premium wines. Seagram owns Sterling, Domaine Mumm and the Monterey Vineyard, while Hiram Walker owns Callaway in Temecula in southern Riverside County.

"The large volume (wineries) have been disposed of by the larger distillers in recent years, and no single announcement was ever made by any of the distillers when they sold these holdings as to why they were getting out," said Lou Gomberg, founder of the San Francisco wine industry analyst firm of Gomberg & Fredrikson.

He said he suspected that jug wine producers' profitability may have dropped in recent years.

"Competition in the premium wine industry appears to have developed such a unique character that its appeal has diminished," Gomberg said, although he added that premium wineries are "still relatively attractive."

The Wine Group, once a division of Coca-Cola Bottling Co. of New York, became a limited partnership to acquire Mogen David, Tribuno, and Franzia Bros. from Coca-Cola.

Corbett Canyon was founded in 1978 as Lawrence Winery by James Lawrence. Last year, Corbett Canyon produced about 200,000 cases of wine, including sparkling wine under the Shadow Creek label.

George Vare, president of the winery, declined to comment on the sale, saying it was to become final on Friday. Ciocca was at Corbett Canyon and declined to accept phone calls.

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