Napa wineries in foreclosure
March 9, 2010
The most expensive wines in the United States are produced in Napa, but the California grape enclave is taking a heavy economic crush. [San Francisco Chronicle]
As many as 10 Napa wineries and vineyards will soon change hands in foreclosures or distressed sales, up from zero in 2008. In a bank survey of vintners, 7 percent called their finances “very weak,” or “on life support.”
“We have 250 vintner clients saying this downturn is the worst in 20 years,” said Bill Stevens, manager of the Silicon Valley Bank wine division.
Land values in Napa, home to about 400 wine producers, have fallen 15 percent from their 2007 peak, driven in part by the decline in demand for high-end wine. Sales of super-premium wines–defined as those costing more than $15 a bottle–fell by 10 percent last year. sales of ultra-premium wines–those costing more than $30 a bottle–declined by 15 percent.
Meanwhile, loan defaults on Napa wineries and vineyards rose fourfold in 2009. More than 30 wineries are currently for sale in California, Oregon, and Washington.