3.9. conglomerates

Question 1

What are conglomerates ?

Answer 1

Conglomerates are a few major and therefore very large companies with interest across various alcoholic products. They often own many small businesses from production to distribution. They have a strong bargain & negotiating power.

e.g. E&J Gallo, Moet Hennessy-Louis Vuitton (moet et chando, veuve cliquot, krug)

Question 2

Large company:

E&J Gallo

Answer 2

• founded in 1933
• family owned
• 6500 employees
• 15 wineries
• 10000 ha
• 40% of California production
• producing 2,5 mio/day
• inexpensive to super premium
• marketing to 90 different countries
• 30 wine brands

= 22% of USA wine market

Question 3

medium sized company:

Michele Chiaro, Piemonte, Italy

Answer 3

• founded 1956
• Barbera, Moscato, Nebbiolo
• 110 ha
• 70 % self-owned; 30 % by growers
• supervising the growers for grape growing
• large volumes of mid priced
• small volume of single vineyard to super premium
  = barolo = La Court; cipressi Nizza DOCG
• 75% of export
  = USA, Canada, Switzerland

Question 4

Small company:

Felton road, central Otago, New Zeland

Answer 4

• foulend 1991
• fruits from own vineyards
• 32 ha
• organic/biodynamic
• Pinot noir, chardonnay, riesling
• single vineyards; single block wines
• 75% export to 40 countries
• premium to super premium prices
• 12 wineries

Question 5

Give the 3 advantages of conglomerates!

Answer 5

Advantages:

1. ) Less intermediaries
2. ) Control of all stages
3. ) negotiating power