20 Bees wine maker has a new owner

by BETTER FARMING STAFF

A former Niagara winery cooperative has a new owner.

Diamond Estates Wines & Spirits Ltd. is taking over the former Niagara Vintners Inc. (NVI) cooperative, the maker of 20 Bees wine and ice wine products.

The cooperative went into receivership last February and its court-assigned receivers, Deloitte & Touche Inc., put it on the block with an April closing date for offers. They filed for NVI’s bankruptcy in June.

Robert Bougie, a spokesperson for Deloitte & Touche says while his company received expressions of interest in the facility from around the world, only seven serious offers made it to the table.

“The challenge of course with NVI was (that it was) too large for some and too small for others,” he says.

Among NVI’s assets was a 43,000 square foot production facility on 30 acres of land in Niagara-on-the-Lake. The facility can process up to 4,000 tonnes of grapes. NVI also has a substantial inventory of bulk and bottled wine as well as nine listings with the LCBO.

Murray Marshall, president and CEO of Diamond Estates, says his company was already planning on building “a full-fledged new winery,” when NVI became available. “It looked like it was going to be a perfect fit for us.”

He notes Diamond Estates has invested more than $30 million in the Canadian wine industry over the past seven years. “We’re committed to this industry.” In recent years that growth has included consolidating four wineries it owns in the Niagara region under the company umbrella as well as mergers with sales and distribution agencies across Canada. Last year it also announced plans to build a $12 million Dan Ackroyd Winery at its Birchwood Estate Winery location.

Marshall expects the transition to the new ownership will be “relatively smooth.” The sale, finalized today, calls for Diamond Estates to take possession of NVI tomorrow. “We’re trying our best to keep everything going and actually building this company back up,” he says.

He says that the company will “certainly look at the retention of as many of the staff as we can and adding to our own staffing quotient.” He declined comment on how many staff positions might be added. The 20 Bees line will continue “for sure” and Diamond is looking at “additional wine expansions as well as new brands to be produced out of that facility.”

He says Diamond Estates plans to work with NVI growers to help them make a transition to either growing for Diamond or other wineries. “We think it’s an important piece in what we’re doing and we’ve made sure through our negotiating that there’s no more pain down there than needs to happen.”

The details of the sale will be disclosed on the Deloitte & Touche website after it is finalized, Bougie says. The amount generated by the sale won’t be enough to pay off unsecured creditors, he says. Creditors meet with Deloitte & Touche representatives today in St. Catharines to discuss details of the NVI bankruptcy.

Established in 2004, the NVI cooperative was made up of 19 growers and one wine maker.

Initially, the venture’s future looked bright. In 2007, it garnered the LCBO Elsie award for VQA excellence and a regional Premier’s award for agri-food innovation. But by February the company, whose book value was nearly $33 million, owed almost $40 million to secured and unsecured creditors, court documents show.

In court documents, Deloitte & Touche attributed the company’s insolvency to inadequate financing, lack of corporate leadership, overproduction of wine and related wine purchases and lack of management experience. BF