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The Restructured Mondavi Holdings

May 30, 1991|DAN BERGER

About two years ago, rumors started circulating around the Napa Valley that the Robert Mondavi Winery was for sale. A spokesman for the winery denied it, and financial analysts attributed the rumor to the fact that "some big money" had met with Mondavi, unsolicited. Mondavi reportedly said the winery wasn't for sale.

A San Francisco-based wine industry analyst said such rumors are not uncommon, especially since the tax law changes of 1986. The law wiped out the so-called estate tax freeze, which permitted a family company to be passed on to heirs at a lower tax rate. Under the new plan, and in the absence of careful estate tax planning, the Mondavi Winery could face large inheritance taxes.

That is one of the reasons Mondavi, hoping to avoid a financial debacle at the time of his death, has been acquiring other wineries and vineyards.

Today, Mondavi owns some 1,200 acres of vineyard land in the heart of the Napa Valley, another 450 acres in the Carneros region south of the winery (still in Napa), the Vichon Winery on the Oakville Grade (50,000-case production), Byron Winery in Santa Barbara County (16,000 cases) and hundreds of acres of other vineyard land in Santa Barbara.

In addition to the Oakville winery, which produces 500,000 cases of premium wine, Mondavi's holdings include the Opus One winery (about 40 acres in Oakville) as well as a huge wine-making facility at Woodbridge, near Lodi, where some 2.5 million cases of less expensive table wine are made.

Under a restructuring of the firm undertaken last December, Mondavi remains chairman of the board, with his older son, Michael, as president.

Next in the hierarchy is newly appointed executive vice president and chief operating officer Clifford Adams. A former San Francisco attorney who handled the lawsuit against Krug, Adams will soon relocate from San Francisco to the Napa Valley.

Also under the Mondavi banner is the Robert Mondavi Wine & Food Center in Costa Mesa. The property was not actually built by Mondavi but by Henry Segerstrom of the development firm C. J. Segerstrom & Sons (to Mondavi's specifications). Under a complex arrangement, Mondavi has a long-term lease. The winery has just completed planting a small demonstration vineyard on land adjacent to the center, which is also owned by Segerstrom.

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