The Chalone Wine Group, Ltd. (Nasdaq: CHLN) announced yesterday record gross revenues of $14,211,000 and $28,729,000 for the three-month and six-month periods ended September 30, 2000, representing increases of 8% and 19% respectively, over the same periods last year. The resulting gross profit of $4,315,000 and $9,727,000 represented decreases from the $5,819,000 and $10,850,000 over the same periods last year.

Net income for the three-month and six-month periods ended September 30, 2000 was $240,000 and $788,000 respectively, versus prior year's $1,014,000 and $1,940,000 for the same periods. Diluted earnings per share for the same periods were $.02 and $.08 versus $.11 and $.21 in the prior year. The reduction in earnings is primarily due to the short harvests of 1998 and 1999, which increased grape costs. The harvest for the 2000 vintage has been picked and is back to normal levels, which will cause future production costs to return to normal levels and provide the opportunity for margins to improve.

"Our revenues are consistent with our long-term strategic growth plan. But the very short harvests of 1998 and 1999 meant that our costs of production rose both at our estate vineyard properties and on grapes and bulk wine we purchased. We have generally completed selling the 1998 vintage and are progressing into the 1999 vintages. We expect normal margins to return beginning with the release of the 2000 vintage in the spring of 2001," said Chalone Wine Group President Tom Selfridge.

Chalone Wine Group, Ltd. (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(TM) Winery in the Carneros District of Napa County, Jade Mountain brand in 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(TM). In the state of Washington, the Company owns and operates Sagelands Vineyard(TM) 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.

CHALONE Wine Group
Earnings Release for the
Second Quarter Ended September 30, 2000

The financial position and results below
are in thousands of US dollars:
September 30,
-----------------------
2000 1999

Current assets $61,871 $57,605

Total assets 144,056 116,117

Current liabilities 13,181 6,124

Shareholders' equity 73,656 66,567

Working capital 48,690 51,481


Three months ended Six months ended
September 30 September 30
2000 1999 2000 1999
---- ---- ---- ----

Gross revenues $ 14,211 $ 13,177 $ 28,729 $ 24,005
Excise taxes (374) (330) (762) (589)
-------- -------- -------- --------
Net revenues 13,837 12,847 27,967 23,416
Cost of wines sold (9,522) (7,028) (18,240) (12,566)
-------- -------- -------- --------
Gross profit 4,315 5,819 9,727 10,850
Other operating
revenue and
expenses, net 27 13 38 53
SG&A expenses (4,094) (3,381) (7,762) (6,424)
-------- -------- -------- --------
Operating income 248 2,451 2,003 4,479
Interest expense (1,059) (599) (1,947) (1,092)
Equity in Chateau
Duhart-Milon 215 193 533 530
Minority interest 154 (325) (102) (629)
Other, net 848 -- 848 --
-------- -------- -------- --------
Income before taxes 406 1,720 1,335 3,288
Income taxes (166) (706) (547) (1,348)
-------- -------- -------- --------
Net income $ 240 $ 1,014 $ 788 $ 1,940
======== ======== ======== ========

Diluted earnings
per share $ 0.02 $ 0.11 $ 0.08 $ 0.21
Average number of
shares outstanding 10,233 9,501 10,229 9,421


From time-to-time, information provided by the Company, statements made by its employees, or information included in its filings with the Securities and Exchange Commission as well as its statements to the press (including this earnings release) may contain statements which are not historical facts, so called "forward looking statements" that involve risks and uncertainties. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms "anticipates," "expects," "estimates," "intends," "believes," and other similar terms as they relate to the Company or its management are intended to identify such forward looking statements. Factors that may cause such differences include, but are not limited to: (i) future weather and general farming conditions affecting annual harvest quantity as well as quality; (ii) variations in market taste as well as demand; (iii) changes in the wine industry regulatory environment; (iv) changes in world-wide supply and demand of grapes and wine. Each of the factors, and others, are discussed from time-to-time in the Company's filings with the Securities and Exchange Commission including the Company's annual report on Form 10-K for the year ended March 31, 2000.