RUFFINO, THE FAMOUS CHIANTI BRAND, WILL STAY IN THE FOLONARI FAMILY: THE INVESTINDUSTRIAL FUND SOLD ITS SHARES (9.9%) TO CONSTELLATION BRANDS, TAKING IT TO 49.9%. FOLONARI HAS 50.1% AND THE RIGHT TO CHOOSE PRESIDENT AND VICE PRESIDENT

The shareholding structure of Ruffino Chianti Classico, the famous brand of the Folonari family, has changed but remains securely in Italian hands. World Beverage, the “vehicle” of the English Investindustrial led by Andrea Bonomi, sold its shares (9.9% of total) to the U.S. giant, Constellation Brands, formerly 40% co-owner of Ruffino taking it to 49.9% of shares. The Folonari family confirms the majority at 50.1% and is entitled to select 7 out of the 13 Board members and appoint the President and Vice President of the group. Ruffino counts seven of the most renowned estates in Tuscany, from Chianti to Montalcino to Montepulciano and the Collio of Friuli, for a total production of 13.5 million bottles a year, 85% of which are exported.
“We are finally getting encouraging numbers from exports,” Francesco Folonari told WineNews, “especially in the major markets, like the United States, where Chianti Classico is our top-of-the-line product. And in Canada, too, where, thanks to our hard work in recent years, we showed a 10% increase in 2009. Positive signs are also coming from other strategic markets for us and for Italian wine in general, such as Germany and the UK”.
In addition to the transfer of shares (a 23.5 million euros operation that yielded Investindustrial 2.5 times the initial investment), Ruffino has also secured 60 million euros refinancing from several banks, “a financial transaction that seems pretentious, but that does not hide any difficult situations. The funding will be primarily for managing the costs of our stores because most of our production is Chianti Classico Reserve, which requires long periods of storage. We must also take into consideration that in the last 7-8 years we have invested 40 million euros to buy or renovate properties, so a little debt is due to re-structuring. But our estimates are good and growing and that is why banks have confidence in us.”
The Folonari experience gives reason to reflect on the importance of brand name for wine, especially on the U.S. market: “U.S. consumers are dealing with the crisis. Those, however, who cannot or do not want to buy, for example, our $24 bottle from the shelf (like a Chianti Classico) will buy another of our lower-priced products, perhaps a $13 IGT, or a $10 Chianti, but will choose a Ruffino because the consumer trusts the brand and when on a lower-budget, especially, doesn’t want to take any risks”.
Info: www.ruffino1877.it