Unauthorized

It was the hottest day of the year. The air was heavy and humid. The incessant singing of cicadas grew to a dizzying pitch. On July 12, 2016 I was visiting vineyards with a producer near Andria in Puglia when news broke that two commuter trains had collided head-on at high speed on a single track just a few kilometers from where I stood. The result of a signaling error, the Andria-Corato train crash would leave 23 dead and 54 injured. It sparked national outcry on train safety in Italy.

The cellular phone of the producer I was visiting began to ring. Friends and family were calling with news of who was on the train and who was not. Wanting to give him some privacy during these delicate conversations, I moved away to seek shade under an olive tree. I began to fiddle with my own phone when I noticed a message alert from Luca Currado of  Barolo’s Vietti. He needed to speak with me urgently and he wanted to apologize.

“For what?” I wondered fleetingly. My concentration quickly reverted to the train tragedy that was unfolding in my immediate proximity.

Only after I returned to my hotel that evening did I remember Luca’s cryptic message. I checked social media to learn that owners Luca Currado and Mario Cordero had sold the historic Vietti vineyards and winery in Castiglione Falletto, Piedmont to American businessman Kyle Krause. The news had already spread, sparking uproar and long threads of unpleasantries on social media.

With hindsight, I think I already knew. I last saw Luca in London in April 2016 at our Robert Parker Wine Advocate Matter of Taste event at the delicious The Square restaurant. We hosted our “Gems of Barolo” dinner and had the chance to catch up before the guests arrived. I mentioned the rumored bidding war for Montalcino’s Biondi-Santi between the Prada and Arnault groups that had been the subject of great discussion and speculation at Vinitaly earlier in the month.

A sudden smile, a knowing smirk or a nodding gesture: I’m not sure what set off my intuition. There was something about Luca’s beaming happiness that made me think – just for a nanosecond – that Vietti might also be in the crosshairs of a major international cash injection the same way Biondi-Santi was rumored to be. Our conversation strayed to another topic and I lost sight of whatever it was that Luca’s smile had unwittingly communicated in that split second.

I would later learn that Luca Currado was in the throes of decision-making regarding the future of Vietti during that April trip to London.  He was mulling over a generous offer to sell.

How 2016 Changed Italian Wine

The Vietti sale should come as no surprise to any of us who follow Italian wine. It reveals a growing trend in which foreign and corporate investors have embarked in an all-out land-grab within Italy’s most prestigious appellations. Barolo, Bolgheri and Brunello di Montalcino have proven especially attractive. Retail prices for wines made in these regions have reached record highs and the coast of vineyard land is surpassing one million Euros per hectare in many cases. American, Argentine, French, Brazilian and Russian capital has arrived with a quickened pace and increased frequency over these past few years. Italian business conglomerates are also on the prowl for savory vineyard acquisitions.

Some have dubbed it the “Burgundization” of Italian wine because like in Burgundy, there is simmering resistance and palpable discomfort in Italy over foreign and corporate capital in local wine. The sentiment is different than say Bordeaux or Napa that have both profited handsomely thanks to their broader business multiculturalism. Italian wine, however, feels strongly about protecting its heritage and keeping these historic wine brands under national ownership. As land values continue to rise, the fear is that up-and-coming Italian vintners will find it impossible to operate and compete. The implication is that a new generation will be squeezed out of a viable future in wine. The fear of speculative business practices is very real. Nowhere is this sentiment stronger than in Piedmont where the Vietti sale took place.

The controversial Vietti sale was highly discussed this past year, but there were many more in 2016. I am bracing myself for more big news to hit in 2017. There are strong rumors of another imminent Barolo sale in La Morra. In other words, Italy’s wine culture is changing quickly and this is something will need to accept despite our nostalgic hankerings. Here are a few recent highlights from the Italian wine world auction block.

The sale of Cerbaiona, one of the gems of Montalcino, was finalized at the end of 2015. Diego Molinari and his wife Nora had reportedly put the property on the market several years prior but concluded their deal in October 2015. They sold to American venture capitalist Gary Rieschel for a reported six million Euros. Mr. Rieschel had previously invested in Massimo Ferragamo’s Montalcino property Castiglion del Bosco. Cerbaiona is a small estate on the eastern slope of Montalcino with about three hectares of vine, of which only 1.7 hectares are earmarked for the production of Brunello di Montalcino. Cerbaiona’s production reaches 20,000 bottles per year (including just 8,000 bottles of Brunello). The Cerbaiona sale represented a major shake-up in Montalcino real estate. Do the math: A reported six million Euros for under two hectares of Brunello vines? That’s nothing short of insane.

Real estate continued to rumble in Montalcino. In mid-March 2016, the Frescobaldi family widened its interest in Brunello with the very clever purchase of Tenuta LogoNovo from Swiss businessman Marco Keller for “above ten million Euros” according to Italy’s winenews.it. The property includes a state-of-the-art winery and is located adjacent to the Castelgiocondo property, in Frescobaldi family hands since 1989. The LogoNovo purchase greatly increases Frescobaldi’s Brunello production power benefitting both the Castelgiocondo brand and Frescobaldi’s Luce della Vite with an on-site winery.

April opened to a rumored bidding war for Montalcino’s Biondi-Santi that never came to fruition. Nevertheless, reports of the buyout broke just as the Vinitaly trade fair was underway and became the talk of the town. Those rumors fueled a sense that the Italian winescape was indeed more fluid and vulnerable to foreign investors than previously believed. If a historic brand like Biondi-Santi could fall into French or corporate hands, Italy had certainly reached an end of an era. On April 5th, we learned that Austrian entrepreneur Stanislaus Turnauer bought a majority stake in Bolgheri’s Tenuta Argentiera – one of Italy’s most beautiful estates in Tuscany. The 500-hectare property edges up to the Tuscan seacoast and boasts 75 hectares of vines now entering their prime production years. This sale brought the spotlight to Coastal Tuscany, affirming Bolgheri as one of the most sought-after appellations in Italy. Foreign and corporate interest in Bolgheri would become a frequently repeated news story throughout 2016.

July would of course be dominated by heated conversations surrounding the Vietti sale. Published reports put the value of the deal at an astonishing 50 million Euros although Luca declined to confirm that figure to me when we spoke that day after he signed his deal. I can reveal that his spirits seemed very high: “I’m in the hangover stage now,” he told me: “We’ve been working on this for a long time. It’s been at least six months. This morning I wake up to the fact that it’s a done deal.”

October opened to more interesting news in the acquisitions department. Argentine businessman Alejandro Pedro Bulgheroni purchased the 53-hectare Tenuta Vitanza property in Montalcino. It represented his third Brunello buy and his fifth in Tuscany. Bulgheroni already owns Poggio Landi and Podere Brizio in Montalcino. He also bought the spectacular Dievole property in Chianti Classico four years ago and Tenuta dei Pianali in Bolgheri. He is a growing power in Italian wine.

Two very interesting and unusual Italy-on-Italy acquisitions occurred in 2016. The Tommasi family of Valpolicella (Veneto) purchased a leading stake in Basilicata’s Paternoster. Aglianico del Vulture is one of the country’s up-and-coming red wines, prized for its power, elegance and aging ability. This investment represents a huge vote of confidence in a southern wine region that, in my opinion, has yet to reach its full potential. I was very excited when I learned about this deal. Another acquisition that caught my attention in 2016 is Feudi di San Gregorio’s purchase of the historic Guicciardini Strozzi property in Bolgheri (now renamed Campo alle Comete). I love the symbolic ramifications of this deal: This is the first time I am aware of a Southern Italian wine company expanding its holdings by buying in Central or Northern Italy. Past deals have seen Northern Italian money moving south, but never the other way around.

As the month of November came to an end, we got wind of another very interesting acquisition. Investment group Terra Moretti purchased Sella & Mosca in Sardinia and Teruzzi & Puthod in Tuscany’s Vernaccia di San Gimignano appellation. Founded in 1899, Sella & Mosca counts an impressive 541 hectares of vines, including one of Europe’s biggest single-vineyard parcels. The sale price for these two properties was confirmed at 62 million Euros by Italian press. The Terra Moretti group already owned more than 1,000 hectares of vines in Italy including Bellavista and Contadi Castaldi in Franciacorta with more holdings spread across Tuscany.

In mid-December we got news that Claudio Tipa of ColleMassari had purchased the 44-hectare Tenuta San Giorgio in Montalcino. The property counts six hectares of Brunello di Montalcino vines and 2.5 hectares of Rosso di Montalcino. Mr. Tipa is reported to have paid eight million Euros for Tenuta San Giorgio. He had previously made one of Italy’s most enviable acquisitions in 2011 when he purchased Montalcino’s iconic Poggio di Sotto property.

The year came to a climatic conclusion with a final deal for Biondi-Santi, the Montalcino estate that had been the focus of so many acquisition rumors throughout the year. In mid-December, it was announced that Jacopo Biondi Santi had taken on French luxury brand investor Epi Group (owned by the Descours family). Epi already has holdings in Champagne and the Rhône Valley. This is its first interest in Italy. Jacopo Biondi Santi will continue to make the wine.