USA: Chalone Wine Group Announces Sale of Hewitt House in Rutherford Bench
In addition to the $14.5 million Hewitt Ranch purchase, CWG also purchased the adjacent Eisele holdings, a four-acre estate with private home, for $1.85 million on February 1, 2000. CWG, working with the Napa County Planning Commission, combined the two properties, performed a lot-line adjustment, and subsequently redivided the properties. The existing Eisele House and the adjacent 60 acres of vineyard will continue to be held by CWG, and at a later date the house will be used as a guest residence for visiting winemakers and wine industry associates.
CWG will net out, after fees, approximately $7.3 million from the sale of the Hewitt House and surrounding gardens. CWG's estimated vineyard cost will then be $119,000 per acre, excluding the Eisele House.
According to the Final Grape Crush Report: 1999 Crop from the California Department of Food and Agriculture, the average price per ton for Napa Valley Cabernet Sauvignon was $2,634. Prices for the top five percent of Napa Valley Cabernet Sauvignon range from $3,600 to $9,400. CWG estimates that the production costs for its Hewitt Vineyard Cabernet Sauvignon are $2,694.
As CWG President Selfridge notes, "Given that our estimated production costs for Hewitt Ranch Cabernet Sauvignon are $2,694 per ton, we're really paying only slightly above the average price for proven, exceptional grapes."
These land purchases mark CWG's new focus on high-end red winemaking. Selfridge has more than a passing acquaintance with the distinctive fruit grown on the Hewitt Ranch. As the Beaulieu winemaker from 1973 to 1983, Selfridge produced reserve-label Cabernet Sauvignon wines from the Hewitt Vineyard fruit. Historically, Hewitt-grown grapes were used almost exclusively for the BV Reserve program.
Chalone Wine Group, Ltd. (Nasdaq:CHLN), "the Company," is a Napa-based company specializing in premium white and red varietal wines. In California, the Company owns and operates Chalone Vineyard in Monterey County, Acacia Winery in the Carneros District of Napa County, and Carmenet Vineyard in Sonoma County. In conjunction with its 50 percent joint-venture partner, Paragon Vineyard Co., the Company also owns and operates Edna Valley Vineyard in San Luis Obispo County. Additionally, the Company produces and markets wines of Central Coast appellation under the brand name Echelon Vineyards. In the state of Washington, the Company owns and operates Sagelands Vineyard (formerly Staton Hills) and is a 50.5 percent managing partner in Canoe Ridge Vineyard. In the Bordeaux region of France, the Company owns 23.5 percent of the fourth-growth estate of Chateau Duhart-Milon, in partnership with Domaines Barons de Rothschild (Lafite), which owns the other 76.5 percent.
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