November 2011
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Valle de Vin set to merge with Grovers Vineyards

Nashik-based Valle de Vin, maker of Zampa wines, will merge with Bangalore-based Grover Vineyards within a month to create the country’s second largest vintner after Sula Vineyards. The merged company will be called Gover Zampa Pvt Ltd, Valle de Vin owner Deepak Roy said.

Roy said Grover Vineyards owner Kapil Grower, Valle de Vin co-owner Ravi Jain and himself will make up the executive committee to manage the merged entity, but refused to share the post-merger shareholding pattern. He said the companies have roped in a PE player to buy out 21% stake in Grover Vineyards being held by French luxury goods maker LVMH and the country’s top wine distributor Brindco. LVMH holds 4% share and Brindco holds 17%.

Roy, who is also the executive vice chairman and CEO of spirits company Allied Blenders and Distillers, part of the Kishore Chhabria Group, said the formal announcement of the merger will be made within a month. Grover Vineyards, founded by Kanwar Grover in 1988, is India’s oldest surviving winemaker following the closure of Indage Vintner, earlier known as Champagne Indage, last year. The merged entity will have vineries in the country’s two main wine producing centres, Bangalore and Nashik, and have easy access to the two largest markets, Mumbai and Bangalore.

Wine made in one state and sold in the other attracts higher taxes. After the merger, Grover and Zampa brands can be made both in Maharashtra and Karnataka. Roy said the merged entity will work on the synergies of the two brands. “For instance, Grovers does not have a sparkling wine while we do, in Zampa. We could therefore launch a Zampa sparkling wine in Karnataka, bottled locally for the tax advantage,” he said.

He said they will be careful not to cannibalise each other’s products, while accepting that marketing will be a challenge since both brands are positioned in the premium segment. “It is a marketing challenge since both are in the premium segment. So, we will need to assess the relative strength of a brand and whichever is bigger, go with that,” Roy said.

This could mean the withdrawal of some products in some markets. In a bid to overcome the tax issues between Maharashtra and Karnataka, Grover had set up a bottling plant in Sangli. This may be closed down since Valle de Vin has its own winery and bottling plant.
Source: Economic Times

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