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Wine

Laurie Jervis: Gallo Winery Buys 2 Santa Maria Valley Vineyards in a Week

E&J Gallo Winery has announced its second purchase of a Santa Barbara County vineyard in the space of one week.

Both properties are located in the Santa Maria Valley American Viticultural Area.

The Modesto-based wine company, which already owns more than 4,300 vineyard acres along the Central Coast, last week bought the Sierra Madre Vineyard property from agricultural investor Doug Circle.

The property, 15 miles from the Pacific Ocean, includes 151 planted acres of vineyards on 542 acres, according to winebusiness.com.

Sierra Madre currently supplies fruit to about 35 wineries that range in size from small to larger-scale producers.

“This purchase affirms our commitment to compete in the luxury wine segment,” a Gallo spokesman said, adding that Gallo also plans to use Sierra Madre grapes in its own wines.

The sale price was not disclosed. However, public records indicate the deal could be worth $30.2 million, according to winebusiness.com.

Days before announcing the Sierra Madre Vineyard purchase, Gallo bought an even larger vineyard — the 436-acre Rancho Real Vineyard at 6020 Highway 101, south of Clark Avenue in Orcutt.

Located on the western edge of the AVA, Rancho Real includes 211 acres planted to various grape varietals, among them pinot noir, chardonnay, syrah, grenache, viognier, pinot gris and gamay, according to published reports.

Public records indicate that sale was nearly $14.5 million, according to winebusiness.com.

A Gallo representative said the company will honor all grape contracts with existing customers at both vineyards.

Rancho Real Vineyard was planted in 2008 under the guidance of industry veteran Rob Murray, the Gallo spokesman said.

Circle, president and chief executive officer of Circle Vision LLC of Placentia, said he farmed strawberries in the Santa Maria Valley when he originally purchased Sierra Madre from Robert Mondavi 15 years ago – before Mondavi was sold to Constellation Brands.

Over the years, Circle estimated that Sierra Madre supplied more than 100 wineries with fruit.

Circle, who invests in commercial and agricultural real estates, said he will redeploy assets to other projects.

“Our family has a 35-year history in agriculture on the Central Coast, and we remain wholeheartedly committed to the region,” he said in a written statement.

“We feel blessed to have had the opportunity to shepherd this magical Central Coast vineyard for 15 years of its exceptional 47-year history, and we are pleased that it is now passing to another family who will responsibly steward it into its next chapter.”

Roger Nabedian, senior vice president and general manager of Gallo’s premium wine division, was equally effusive.

“We are thrilled to add this impressive vineyard to our premium portfolio,” he said in the same written statement.

“This purchase supports Gallo’s commitment to continue making and selling luxury wines, while growing the finest grapes in Santa Barbara County.”

Gallo, the world’s largest wine producer, has mainly used grapes from the San Joaquin Valley over its 85-year history. Founders Ernest and Julio Gallo ventured into California coastal regions starting in the 1980s.

This includes another Santa Barbara County property, Bridlewood Estate Winery, acquired in 2004.

— Laurie Jervis blogs about wine at www.centralcoastwinepress.com, tweets at @lauriejervis and can be reached via [email protected]. The opinions expressed are her own.

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