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July 23, 2008
Château Cos-d'Estournel Buys Chateau Montelena
One of Bordeaux's top châteaus has bought one of Napa's most historic estates. The owner of Château Cos-d'Estournel, Michel Reybier, purchased Chateau Montelena in Calistoga this past weekend, pending U.S 
government regulatory approval. While Reybier would not disclose the purchase price, several sources in Napa familiar with Montelena's negotiations told Wine Spectator that the Barrett family, Montelena's owners, had fielded offers between $120 and $150 million for the winery and its 200 acres.
Bordeaux second-growth will take the reins of historic Napa winery
"We have been looking for a while to purchase something in Napa Valley," said Jean-Guillaume Prats, general manager of Cos-d'Estournel. "It's similar to Bordeaux and we can give and take mutual knowledge and experience."
"This is a perfect fit—a dream marriage," said Jim Barrett, in a statement. "We could not have asked for a finer team to carry on this legacy."
Others in Napa Valley were not surprised by the news. "The Europeans are working with a 60-cent dollar. If I were a European vintner who wanted to expand, now is the best time," said Michael Mondavi. "It's the perfect storm, with a strong euro and a weak U.S. economy."
Located in St.-Estèphe, with vineyards abutting Château Lafite Rothschild, Cos-d'Estournel is one of the Médoc's "super" second-growths. Prats' father, Bruno, brought the estate new acclaim after he took over the property in 1971. Reybier, who made his fortune in the food industry, bought it in 2000 and kept Jean-Guillaume as manager.
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Montelena is best known for its estate-grown Cabernets, from the Montelena Estate vineyard at the winery in Calistoga. It is also highly regarded for its Napa Valley Chardonnay, and it produces a second Napa Cabernet, along with Riesling and Zinfandel.
The winery vaulted to international fame with the famous 1976 Paris Tasting, where its 1973 Alexander Valley Chardonnay won a blind tasting, vanquishing competition that included prestigious white Burgundies and other California Chardonnays. The tasting is the subject of two upcoming movies, which will only increase Montelena's name recognition.
Located north of Calistoga, the winery dates to 1882, when Alfred L. Tubbs, a San Francisco-based entrepreneur, purchased the land and built the chateau. It had been abandoned for decades until 1969, when Los Angeles attorney Jim Barrett led a group of investors to purchase it.
In recent years, however, the winery has battled what the winery termed "cellar funk," with some of its wines tainted by 2,4,6-trichloroanisole, which the winery traced back to a problem in their cellar. TCA can form when mold interacts with chlorine and phenols in materials such as wood, cardboard or cork and may impart a musty or moldy character to wines, or mute their fruit character.
Rumors of the winery's impending purchase have swirled around Napa for some time. Sources say that the Barretts began looking for a buyer three months ago. As offers came in, the sale price quickly escalated over $100 million.
Prats told Wine Spectator that once he and Reybier learned Montelena was for sale, it took about a month to close the deal. Reybier has created an executive committee to run the estate, beginning with this fall's vintage, headed by Prats and including Bo Barrett (Jim's son and the current winemaker), current managing director Greg Ralston, and Cos-d'Estournel winemaker Dominique Arangoits.
This is not the first time Bordeaux has looked to Napa. Robert Mondavi's partnership with Château Mouton-Rothschild created Opus One in 1978. Christian Moueix, whose negociant firm owns Chateau Pétrus and several other top Pomerol estates, started Dominus Estate in 1982 as a partnership with Robin Lail and Marcia Smith, the daughters of former Inglenook and Napanook owner John Daniel. In 1994, the partnership was dissolved, leaving Moueix as sole proprietor.
Undoubtedly, Montelena's historic reputation inspired Cos-d'Estournel's bid. The strength of the euro, currently trading at about $1.60, probably helped make the deal happen. But Reybier's team faces several challenges as it takes over. Napa sources familiar with the negotiations question the price tag because the property needs so much work. They believe that the cellar and bottling space is currently too small to grow the brand and that 75 percent of the vineyards must be replanted.
"There's a need for a tremendous amount of maintenance that has been deferred, maybe a facelift of the entire operation," said a vintner familiar with the winery who would not speak for attribution.
Prats admitted that Montelena will require significant investment in both the vineyards and the cellar. He was not concerned about the recent TCA problems. "We are fully aware of the TCA situation, and we investigated it thoroughly. We believe it is a thing of the past."
"It's a great vineyard and I really want to take Montelena to the highest quality level possible," Prats added.
Source: “Château Cos-d'Estournel Buys Chateau Montelena,” Jo Cooke and Daniel Sogg; Photo Credit: Clay McLachian, Wine Spectator, July 23, 2008
Posted by fortna at July 23, 2008 03:52 PM
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Chateau Montelena is a marquee name among Napa Valley Cabernets, but from a bygone era. The winery, which had been rumored to be for sale, was purchased this past weekend by Michel Reybier of Château Cos-d'Estournel.
It still has fans who admire its sturdy, distinctive, ageworthy style, but most of them are old-guard collectors. For years, from the 1970s through the 1990s, Montelena Cabernet from its Montelena Estate in Calistoga was a cornerstone in many Cabernet collections. It was one of those wines, like Robert Mondavi Reserve, Beringer Private Reserve and Stag’s Leap Wine Cellars Cask 23, that were prized possessions.
But in recent years the allure of Mondavi and Stag’s Leap, and to a lesser extent Beringer, has softened and, in the case of Montelena, quality has lagged. It has been at best an inconsistent performer, with notable cellar issues and bottle variation. Many old-time Montelena drinkers are less thrilled by the wines these days.
These Cabernets, and most others of their era, rose to stardom at a time when there were 30 or 40 wineries in Napa Valley and wineries could corner the valley’s best grapes, most of which were farmed by independent growers. Now most of those vineyards are used for individual brands.
Collectors could readily secure a case or two of these old-guard Napa Cabernets—Montelena, Mondavi Reserve, Stag's Leap and the like—for their cellars, and still can, which is unusual today, when many wineries only produce a few hundred cases and you can only buy three bottles from the winery, if you’re lucky enough to get on the mailing list.
It’s a much more crowded field now, with some 400 individual Napa Cabernet bottlings this year, and the popular trend among Cabernet drinkers is seeking out the next new star. Moreover, wine drinkers increasingly are looking for fleshier, earlier drinking Cabernets, not ones that need extended cellaring.
The sale of Montelena is hardly blockbuster news, yet it underscores the fact that the winery, and brand, are both in transition and in need of an overhaul. Insiders say both the cellar and vineyard need work. Think what you may about the Montelena wines—its Cabernets, Chardonnay or Zinfandel—but they have not been on the cutting edge for some time. Many will argue that that’s a good thing and that those wines represent a more traditional style. Put another way, the wines could be much better. On the plus side, Montelena Cabernet is a fixture on many great restaurant wine lists.
The new owner, Michel Reybier of Cos-d’Estournel, will install an executive committee headed by Cos general manager Jean-Guillaume Prats. Prats' father, Bruno, took the Cos estate to new heights after taking over the property in 1971. Most of the top Bordeaux châteaus have spent lavishly overhauling their vineyards and modernizing their cellars, and the proof is in the bottle. It has become an extremely rich man’s game in many wine quarters these days.
The new owners are aware of Montelena’s past issues and should be prepared to renovate the winery and vineyards. And they hold the long-term view to execute such a vision. Many European firms are flush with cash and the exchange rate is ideal for acquiring U.S. firms. On Monday Swiss drugmaker Roche offered $43 billion for the part of Genentech that it doesn’t already own, and last week, Anheuser-Busch agreed to be taken over by Belgian-Brazilian brewer InBev for nearly $60 billion.
In the end, the main issue, as it always is, will be wine quality, and if Montelena returns to its glory days, it will prove to be a marketable brand, maybe even a great one.
I suspect the glory days for many of Napa's first great wineries—Montelena, Heitz, Stag’s Leap, Mondavi and others—are behind them. As businesses, they have great brand equity in their names. But if the wines don't deliver, their names won't be enough.
Still, it won’t be like the good old days. It’s a much more diversified and demanding market. Yet there’s only so much great Napa Cabernet, so let’s see what the new owners can do. I would expect to see some changes with the 2006 and 2007 vintages and the 2008 harvest will fully bear the signature of the new owners.
Posted by: James Laube at July 24, 2008 02:24 AM