2 European Winemakers Join Forces

Two of Europe’s leading wine producers announced a strategic partnership Wednesday to take on U.S. and Australian competitors in a global battle for emerging markets.

The pact, which falls short of a full merger, brings together Italy’s largest producer, Caviro, and Groupe Val d’Orbieu, France’s second-largest winemaker. The alliance will cooperate in such areas as research and development, transportation and marketing, and will lobby to defend the interests of producers.

“We have to sweep away the dust, to modernize, to adapt and become more competitive,” said Joel Castany, president of Val d’Orbieu.

With sales of $267 million last year, Caviro represents 20,000 growers. Val d’Orbieu, with sales of $423 million, brings together 15 cooperative wineries, 135 privately owned cellars and 2,000 producers.

Castany and Caviro’s president, Secondo Ricci, said European suppliers risked getting squeezed out by giants such as Constellation Brands Inc., based in Fairport, N.Y., which last year took over Australia’s BRL Hardy Ltd. to become the world’s No. 1 winemaker with wine revenue of more than $1.2 billion.

The two European producers aim to focus on emerging wine markets in Russia, Japan, Korea, Taiwan and eastern Europe.

Longer term, they are looking at potentially huge markets in India and China, hoping a rapidly expanding middle class will develop a taste for European wines.