Cleavage Creek sold for China exports

NAPA COUNTY -- A Hong Kong-based group has purchased the Cleavage Creek wine brand as well as its shuttered 6,700-case-a-year winery and vines in Pope Valley east of Napa with plans to export that brand and other forthcoming California labels to China.

[caption id="attachment_78017" align="alignright" width="400"] Production of the Cleavage Creek brand for China markets is set to come back to this Pope Valley facility in 2014. (image credit: Heritage Sotheby's International Realty)[/caption]

FCC North American Investment, LLC, purchased the brand, its 16,000-gallon-a-year winery with 19 acres of mostly cabernet sauvignon vines and permits to plant 16 more on the 95-acre ranch at 6307 Pope Valley Rd. on July 26 for $4.95 million, according to public records.

The late July off-market deal came through active courting of out-of-the-country buyers, according to the buyer's agent, Scott Bergman of Bergman Euro-National. Out of a number of inquiries from China-based investment groups seeking California wine brands and properties, this group was the best-prepared, despite not having been in the alcoholic-beverage business, he said.

"They had established a relationship with a large distributor before they had a wine label," Mr. Bergman said.

The buyers declined to comment on the sale, according to a Hong Kong-based representative.

The deal didn't include the Budget Brown brand. Yet the Cleavage Creek name had more appeal among the buyer's connections with Macau casinos, a target market, he said. Whether it would be a benefit brand again is unclear, he added.

The group is seeking U.S. and California approval of a new label, Calla Lily Estate & Vineyard, also for export to China. FCC North American Investment is seeking a second winery to purchase, potentially in Russian River Valley with a supply of pinot noir grapes from that winegrowing region.

"The Chinese market is realizing that (cabernet sauvignon) isn't the endall," Mr. Bergman said. "They are realizing that Russian River pinot noir is highly appealing to the new Chinese market."

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