An Image Problem for Seagram

A few months ago, about two dozen California wine makers gathered for a wine tasting were asked to vote for the top 15 California wineries whose wines had achieved a level of excellence over time.

Nobody mentioned Sterling Vineyards, and when the name was brought up, one wine maker sneered and said, “I’ll never touch another Seagram product as long as I live.”

Sterling is owned by the Seagram Classics Wine Co., a division of Joseph E. Seagram & Sons, a New York-based distiller. Despite the high quality of Sterling’s wines, some in the wine industry won’t drink the wines because of two incidents that rankle Seagram bashers.

One was a campaign Seagram undertook in 1986 to equate the alcohol content in a glass of wine, a shot of booze and a can of beer. The other is allegations by three wineries that Seagram failed to market their wines properly. Lawsuits are pending in three cases.

Sam Bronfman, president of Seagram Classics, knows of the resentment toward Seagram, but he is trying to let wine quality answer his critics. And if wine quality can mollify the vitriolic, the latest two Sterling wines will do it.

Buying a Vineyard

Two years ago Seagram acquired Rene di Rosa’s famed Winery Lake Vineyard in the Carneros district, the cool growing region that bridges the southern reaches of the Napa and Sonoma valleys. That acquisition cost more than $40,000 per acre, which some said was a high price to pay.

But Seagram wanted the prestigious vineyard so it could make vineyard-designated wines from its Pinot Noir and Chardonnay grapes, and for a source for its Domaine Mumm sparkling wine operation. Now the first of those wines is ready to be shipped.

And the 1986 Sterling Winery Lake Chardonnay is one of the finest Chardonnays I have ever tasted, with a complex aroma that has lemon, spice and pineapple woven around other more delicate elements. Concentrated fruit is there in the taste and the rich yet crisp aftertaste is laden with nuances. The wine will be $18 on release June 1.

The second new star in the line will be even more expensive ($20), but the 1986 Winery Lake Pinot Noir is an intriguing wine of subtlety and finesse. When I tried it earlier this month, the aroma was faint, though the taste was cherry-lush and fulfilling. Two hours later, I poured another splash from the still-open bottle and found a delightful mint element overlying fruit and spice. It will be released in the fall.

Samuel Bronfman II, 35, is the son of Edgar Bronfman Sr., chairman of Joseph E. Seagram & Sons. He is also the older brother of Edgar Bronfman Jr., whose success with Seagram’s Wine Cooler has been well-reported on Wall Street, and who is reportedly being groomed as the heir to their father’s throne as head of the giant ($3.8 billion in sales) corporation.

But whereas Edgar Jr. is considered brash, a maverick who never attended college, Sam--a college graduate--presents a picture of placid professionalism. His employees in a rambling office complex here said he sets a “positive tone” and they like the fact that they are away from the hubbub of Manhattan, where the division was based until nine months ago when Sam moved it here.

Sam said the move was made to be closer to his wine properties, but some employees are pleased the move was a way to divorce the day-to-day operations of the Classics Division from those of the larger House of Seagram, the spirits-cooler branch run by his brother.

The three winery lawsuits against Seagram (filed by Keenan, Carneros Creek and Lambert Bridge) are pending, so Bronfman talks about them only in the most general terms. But he declines to repudiate the equivalency campaign.

Dangers of Excess

“I’m still a proponent of equivalence from a pure alcohol point of view,” said Bronfman. He said Seagram wanted to alert people to the dangers of excessive drinking of alcoholic beverages.

What irked the wine industry was that the ad campaign ignored scientific studies showing that the alcohol in wine entered the bloodstream more slowly than the alcohol from distilled spirits, and that after “typical usage,” wine with food is far less intoxicating than a martini before the meal.

Bronfman scoffed at that argument, saying the scientific data aren’t perfect and “we could argue that point for hours.”

The wine industry charged that Seagram instituted the campaign largely to have taxes on wine raised--based on the fact that Seagram makes a far greater profit on distilled sprits than it does on wine.

Sam responded, “The campaign was not a taxation argument. All excise taxes are regressive. And this was not a pro-Seagram campaign, it was a campaign to inform people” about what’s in various alcoholic beverages.

Sam was asked who dreamed up the campaign. He said it was a company creation, and he declined to say what hand he played in its inception, if any. There are those who feel Sam had nothing to do with it, and that Sam feels it was ill-conceived.

All he’ll say about the matter is, “Perhaps it could have been done a little better,” and he realizes that there might be a “negative connotation that (transfers) to our fine wine business.”

State Properties Improving

The division that Sam Bronfman heads is doing well. In 1987, division sales hit a record $90 million; Sam projects it will do $125 million in 1988. And the wines of Seagram’s three California properties continue to improve.

Recently, Seagram signed marketing agreements with two of the oldest wineries in California, Charles Krug and Mirassou, and at a recent financial symposium on the wine industry, Bronfman said he was looking for further ways to make use of “underutilized assets,” using Seagram’s muscle to market premium wines.

Moreover, Seagram is putting an estimated $15 million into its Domaine Mumm sparkling wine operation, building a new facility on the Silverado Trail in Rutherford, and its line of wines from the Monterey Vineyard is improving rapidly.

Now all Sam has to do is persuade the industry that he is here for the duration and as a quality player, and that the episodes of the past are behind him.

Wine of the Week: 1986 Nalle Zinfandel ($9)--There may be no better Zinfandel on the market than this limited-production (2,000 cases) item. Doug Nalle makes only Zinfandel and it is near perfect in all ways--loads of raspberry-ish fruit, supple taste and a rich, spicy aftertaste with no harshness. It’s great now and will age for at least 5 to 10 years. The wine is available in limited quantities in Southern California, but Nalle will send two bottles to any California street address for $25 (including shipping and tax). Write to: Doug Nalle, P.O. Box 454, Healdsburg, Calif. 95448.