BREAKING NEWS: Gran Cruz purchases Quinta de Ventozelo

[Roy Hersh]

Roy's note: this was an article in Portuguese that I used a translation program to come up with this. Obviously there will be some minor mistakes in grammar etc.:

The business of Port wine is far from the strength that showed in the late 90s of last century. The Douro farmers earn less and neither the boom of Douro wines has managed to reverse the income break. Still, the main industry groups never invested so much as now.

Times will difficult for the Douro wine producers, that and the constant degradation of the price of grapes, lost only in the last decade about 140 million euros with a decrease of wine production of Porto. But, curiously, in the same period of crisis the main industry groups have strengthened their positions, considerably increasing your assets. Both Symington group, as Fladagte Partnership and the Grand Cruz, the top three players, been in years more recent large investments in the purchase of farms, businesses and rehabilitation of buildings.

Then in 2006 they acquired the Cockburn's, in what was the company's largest investment in recent decades, the Symington family however bought the estates of Curval (located in the Pinion and where is finalizing a center of wine production and reception of visitors), Sabordela (Pinion), Sibio (Thy) and Gafaria (Carrazeda of Ansiães), adding already 27/5 throughout the region (a little more than 1,000 hectares of vineyards). In between, completely renewed Graham's cellars, making it the one of the main Gaia visits centers. The Fladagate Partnership, and has built a luxury hotel in Gaia, the Yeatman, also bought in Gaia Quinta Barons (EUR 21 million) to Real Companhia Velha, where he installed a modern bottling line, and in the summer of 2013 acquired Wiese & Krohn, an exporter of port founded in 1865 and whose stocks wines were valued at over 20 million. In turn, the Gran Cruz, part of the French group La Martiniquaise invested in recent years close to 40 million euros in the creation of Space Port Cruz (on the waterfront of Vila Nova de Gaia), the construction of a model winemaking center Alijó and, since the end of 2014, the purchase of Thursday Ventozelo, one of the biggest estates in the Douro (about 400 hectares, of which 198 are under vines).

If compared to Symington and Fladgate is notorious a clear investment in the sector of Port wine in the case of Gran Cruz strategy is to procure raw material for special categories of Port wine and at the same time, "to put also a walk in the Douro wines, "notes Jorge Dias, the administrator of the French group in Portugal. The purchase of Thursday Ventozelo to Spanish of PROINSA (by about EUR 15 million) was the last big deal and closes an actuation cycle of Gran Cruz in Portugal.

The company leads the market of Port wine, with a share of 23%, invoicing about 75 million euros, but the bulk of the operation has been concentrated in the lower categories. For many years, the Gran Cruz merely buy port wine, the staging of it and selling it. The company was known to be aggressive in purchases using their financial capacity for low output prices, especially among the cooperatives, most of which never came out of a chronic debt situation. Later, also began producing port wine according to their needs from the purchase of grapes to farmers. With Ventozelo, the company will start producing wines with their own grapes, can now develop a high-quality niche business and not just volume.

The French group once had a farm in the Douro, Farm, located just joins the Quinta da Leda, Sogrape (near Almendra, Foz Coa), but the story is not very proud. Most of the vineyard was planted illegally and the Gran Cruz could only legalize thanks, it is said, the involvement of the French government. Influenced or not, the Portuguese Government, led at the time by António Guterres, eventually approve an ordinance legalization of vineyards as the Gran Cruz needs and which lasted only one day. In 2005, Quinta da Granja, with about 100 hectares of vineyards, was sold at anytime. The property was only allowed to produce Douro wine and this segment, the time was not strategic for the French company.

With the death of historic administrator Gran Cruz, Rocha Pinto, and the entry in 2009 of Jorge Dias, academic passing by the Government and the Port Wine Institute, the strategy and the behavior of the Gran Cruz began to change. The new administrator ended the partnership with Manuel Mateus, a known intermediate of the Douro wines, renewed the face of the company in Gaia, launched the first Douro wines and some of the extraordinary white port wine, built the most modern sector of winemaking center (occupying the space left open by Adega Cooperativa de Alijó, once one of the largest and Douro today in a vegetative state) and bought the Farm Ventozelo. All in just five years. Now the challenge is not only to sell more than any other company. It also implies dispute the quality of leadership in the Douro and Port wines, and having opportunity to continue to gain muscle, which is why Jorge Dias does not close the door to new investments. Although the wine sector of Porto is dominated by five major groups (Gran Cruz, Symington, Fladgate, Sogrape and Sogevinus), "there remains a need to focus on the Port wine sector", given the increasing pressure of large areas, he says. The Douro wine growers, these were never as helpless

[Andy Velebil]

Good for them.

[Glenn E.]

Nice move for them. I'm having difficulty with the translation, though... who did they purchase the Quinta from? Was it independent?

[Ronald Wortel]

I always thought Real Companhia Velha bought the quinta from the Spanish firm PROINSA back in 2008 (see here), but apparently it was some sort of agreement where the Spanish retained ownership? Anyway, Cruz is clearly aiming at premiumisation with this acquisition.