Tuesday, August 31, 2004

Mondavi observations, round II

Other thoughts on the Mondavi spin-off

* Can they afford to buy back the Napa assets without Michael Mondavi "buying in"?

* If not, will they have to sell off strategically valuable Napa land to make it work?
* Do they even want all three Napa Vineyards (the Carneros one is 'uneven' at best)?
* How do they handle the ownership of the luxury imports Ornellia, Luce, and Sena?
* Do they buyback their 50% ownership in Opus One (although after the 89 that WS gave the last vintage, maybe its time to get out)?
* How do they cleanly break away from the Private Selection brand which has Robert Mondavi and the arch and tower very prominently displayed, without losing the trade's interest in the brand? Through some type of name-licensing agreement?

And most of all, if the remaining corporate assets (principally Woodbridge and Private Selection/Coastal) have to gradually "use-up" their rights to the Mondavi name, the Peter Mondavi family just had a windfall. That would leave them as the only Mondavi brand selling under $10!!! CKMondavi sales will surge if they play it right....


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