The Vietti Sale and What It Means for Piemonte

Our wine-educating social media friend Keith writes an insightful blogpost about the sale that has the wine world abuzz at the moment.  Even if you’ve never heard of or tasted a Vietti wine, this subject should still be of interest to you if you’re reading this, as you’re likely a person like us–someone who appreciates how Italy has managed to stay true to its locavorist, slow food loving, artisanal wine making roots in the 21st century (something increasingly difficult it seems).

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The short version:  an historic Barolo producer, Vietti–hungry for working capital, and feeling pressure as farmers whose grapes they rely upon started wanting to sell off their properties instead of renew contracts to produce the high quality fruit that Piemontese winemakers live and die by–agreed to a sale of the Vietti brand, its wine production, and its acreage in Castiglione Falletto to Krause Family Holdings, the ownership interest of quite possibly the worst brand name globally for gas stations I’ve come across (Kum and Go…yes, really, that’s what they’re called).

Looking for more insight into Vietti’s Luca Currado’s motivations, I listened in on Levi Dalton’s podcast interview where the subject of the sale was delved into (mentioned in Keith’s blogpost).   Interesting discussion worth a listen; that said, the line of questioning Levi takes left me wanting for some more probing questions.

Luca talks at great length about the scary economics facing Piemontesi wine producers, and seems to understand that he was going to face criticism locally and abroad for selling to an American corporate interest, but also stresses repeatedly that he retains creative control over wine production.

Questions I was left wondering about (from interacting with him on Twitter, I get the distinct impression Levi wasn’t happy with my assessment, alas…but inquiring minds want to know):

  1. For how long does that control over wine making last?  Until his retirement?  His death?  What happens if his children don’t want to continue in the wine producing tradition?  What then?
  2. Details about the transaction are sparse, but articles discussing it in wine related publications suggest the Krause family is to be consulted about “strategy and major decisions”.   What constitutes a “major decision”?  Does the Krause family essentially have a veto power when major decisions need be made?
  3. Wine production is a high risk business, and Vietti like all Piemontesi vignaioli is never more than one hail storm away from disaster; is there protection for his control over wine production if there are a couple disastrous vintages?
  4. What pressures will this portend for other negociants who rely on fruit from various grape growers in the region?  Will wine production in Piemonte eventually require infusions of capital from outside interests in order to be workable?

Vietti was a large house and an older, very well established brand in the region.  If they couldn’t afford the debt load for buying the grape production from the farmers who are not renewing contracts, I wonder if anyone else in Piemonte can either.  Indeed, one of the things about Piemonte that strikes me as I explore it is how land rich but operating capital poor the wine makers really are.  You don’t see many of them driving around in Ferraris, despite owning estates that are worth tens of millions of dollars.  While really small producers who work entirely with their own stocks probably aren’t going to be affected (I’ve spoken over email and Facebook with a couple off the record who aren’t too deeply concerned), many of the, for lack of a better term, mid-sized producers are from what I hear a bit concerned this represents just the first of many dominoes.  Will Piemonte stay Italian family owned for another generation?  Certainly not something anyone can know for sure, but I don’t think people asking that question are merely being nativist ninnies.  The character of the place is certainly evolving, perhaps out of economic necessity, but it’s evolving nonetheless.

What does that mean for fans of artisanal Italian wine making?  It certainly bears watching.  Keith’s blogpost offers some insightful pondering on that score, and more thoughts on offer here.

For what it’s worth, yes, it’s a fair criticism that those of us who are concerned about this are no doubt wedded to a romanticized vision of what the Langhe and Roero districts are, and aren’t familiar with the day to do operational challenges the producers there are saddled with.  But when you consider how similar economic realities have played out in other high demand wine production zones, it is indeed entirely possible the character of the region is going to be quite different.

Time will tell.

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