US: Californian co-operative auctioned off
The details of the sale of the winery's fixtures, equipment and inventory were not disclosed. The value of the sale of the winery and other real estate is to be negotiated over the next few days by the coop's lender, the Farmers & Merchants Bank. The bank's president Kent Steinwert said the sale would cover the coop's $7.2m.
The failure of the company was attributed to the grape glut which has affected the industry in recent years. The harvest this year is expected to be around 3.3m tons, an 8% increase on 2001 and the third time in the last three years that the Californian crop has topped the 3m-ton mark, resulting in falling grape prices.
"We believe this cycle is going to be longer and deeper than any we've seen in recent years," said Bruce Mettler, the coop's president. "We felt that now rather than later was the appropriate time to move." The coop, founded in 1934 primarily by German farmers, has around 35 members and derived around 80% of its sales from bulk wine.
East Side's general manager, Lee Eichele, said he hoped the new owners would keep the winery running as it is, but for now its future remains unclear.
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