New World Wines of Tustin, a wine marketing company founded in 1983, said Tuesday that it has acquired Domaine San Martin, a 220,000-case winery, from Guinness of Great Britain.
No purchase price was announced, but a source close to the negotiations said the price was in excess of $4 million.
Tony Dann, president of New World Wines, said the company will move its headquarters to San Martin, 20 miles south of San Jose.
Dann said New World Wines was founded by a group of businessmen who have worked for British and American package goods marketing companies, and by executives with experience in other retail goods.
Middle Market Targeted
Under the subsidiary, Vineyards Direct, the firm has acted as a private packager of wines for retail clients such as the 300-store Hickory Farms chain. In doing that work, the firm dealt with San Martin, which packages private brands of wines and last year bottled an estimated 200,000 cases of wine under brands other than its own.
Dann scotched rumors that San Martin would be dismantled, saying New World Wines felt San Martin was "seriously undervalued and superbly equipped."
"Our mission is to produce wine at the lower end of the premium category," Dann said. "We are not interested in the top end of the premium market. We have felt for a long time it was necessary to make wine intelligible, accessible and fun for Mr. and Mrs. Middle America." Guinness acquired a number of California wine properties and imported wine brands in its 1986 acquisition of Schenley Industries and announced last year that it would sell all those wine properties.
In March, Guinness agreed to sell Concannon Vineyards in Livermore, Calif., for an estimated $7 million to its wine maker, Sergio Traverso. Last week, a filing with the Bureau of Alcohol, Tobacco and Firearms revealed that Dienhard & Co. of Koblenz, West Germany, a wine producer and marketing company, has become a partner with Traverso in Concannon.