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How much is a winery worth?

How much is a winery worth?

Is the wine world made of gold? For 229 wineries producing more than 50,000 hl  it is, for the 66,000 small and medium ones that are in difficulty it is not

Costellation Brands

Constellation Brands

Read for you Donatella Cinelli Colombini

The giants abroad that are on the stock Exchange have flown sky high: Constellation Brand is worth 16 billion euro and is expecting more than 700 million in profits in 2015. Everyone else is nothing in comparison, but a part form the Chinese, many have doubled their value on the exchange: Concha y Toro and Distell, Trearury Wine Estate. So the world of shares believes in wine, and is willing to invest in it too…. if the companies are large.  I numeri del vino, very well informed and truthful web site regarding economic analysis,

<< the two small ones we have for our study,

Farm welcoming

Farm welcoming

Delegat’s and Baron de Ley, are  40% cheaper in terms of price and value on EBITDA and EBIT, while they travel along the same evaluation regarding sales (2.4 times) as the rest. This means that their “superior profitability” does not yet get recognized by the market.>> Obviously these are “small giants” not small, really small, like the majority of Italian wineries

Here in Italy the wine sector is made up of a mosaic of 383.000 grape growers with little more than one and a half hectares each. Confetti. A situation which does not help us when we compete on the global battle field, against  Chile, for example where the concentration in the 4 largest wineries is of  85%, New Zealand 80%, Australia 61%, 50% USA … Italy 7,6%.

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Working in the vineyard in the rain

The most impressive thing is that in Italy  61.500 wineries out of the 66.500 total, have an average production inferior to  500 hl so summing their activities they only slightly go over two and a half million hectolitres while the 229 largest wineries produce alone 50 million hectolitres per year. And they are solid, regardless of the crisis.<<The larger more industrial wineries that deal mostly with wine for everyday.. have to deal with a battle over discounts on the shop shelves.

The countryside long ago

The countryside long ago

And the new grape pickers don’t have an easier time either because they lack experience. While the boutique winery and the wineries of a certain age that are well structured, and in many cases with a really well known brand, fight a battle too, but with more positive results.>> says Anna Di Martino in her report regarding the  88 larger wineries in Italy.

Among the smaller there are the “life style” wineries, or rather those with stores of great wines in historical buildings that must also be examined from a real estate point of view too. These are in fact the dream home of many rich foreigners, who wish to live in Italy. The business is in red but the value has resisted regardless the crisis.

The geat wine enterprises

The geat wine enterprises

For all the rest the situations is not rosy. The debts increase even without investments and it is more and more difficult to pay the staff. Bureaucracy is too demanding registers, courses, authorizations, …) all make the small wineries run by the owners more solid than the medium sized ones where there are employees. And so the weakest chain of the production line and the less productive one, the vineyard, gets whittled down more and more: 200.000 hectares in the last three years, 160.000 in the last 13 says Cronache di Gusto.

An unusual harvest

An unusual harvest

From this come two thoughts come spontaneous: the only prospective for Italian viticulture is to depend on its ability to create a network, especially in sales activities and to work towards the DOC denominations and the bettering of the quality levels.

On the other hand like Carlin Petrini says we must return to our love for the land and believe in its values instead of looking at what it can produce in value, because it is only a strong farming system – of vineyards, olive groves, crops, chicken coops, vegetable gardens … that respects the environment that mankind will have a future.