23.6.16 Counter Offer for Garvey; Tio Pepe and the Guadalete; Possible Strike?

Just when Lucio Tan’s deal to purchase Garvey and Zoilo Ruiz Mateos required only signatures, Andrew Tan, who recently bought the old Domecq business, now Fundador, has presented a last minute offer. This offer is understood to be better than that of Lucio Tan which was for between 20-25 million euros, so we will now have to wait longer to find out the fate of Garvey, but it is certainly unusual to have people fighting over the purchase of a Sherry bodega. While they share a surname, these entrepreneurs and brandy magnates from the Philippines are not related.

The river Guadalete was used by the Phoenicians to transport goods. These great traders exported agricultural produce from the Marco de Jerez to their cities of Sidon and Tiro. Later, from the XVI century, the Sherry exporters did the same. Butts of wine were loaded onto carts in Jerez and taken to El Portal, the nearest point of the river to Jerez, and thence downstream to the coast at El Puerto de Santa María.  

It was backbreaking work, and in homage to this cultural and environmental history, on Tuesday González Byass staged “Travesía Tio Pepe Guadalete 2016”. Guests could follow this ancient route in a motorised inflatable dinghy and enjoy a glass of Sherry at each stop. At the end of the trip there was a lunch at El Faro. The journey began and ended in El Puerto with experts on hand explaining historical and environmental details such as the Trocadero, the wine quay and the railway.

Over time the river has silted up limiting its commercial use and leading to abandonment, and so it has become a bit of a wildlife reserve, and there are efforts underway to protect and enhance it. Towards the Bay of Cádiz there are old salt pans and the Castle of Doña Blanca. It is said that here, Pedro I “The Cruel” had his wife, Doña Blanca de Borbón murdered. Here also are important archaeological remains with evidence of wine production.

This initiative could have great commercial potential on a consistent basis rather than just a one-off annual event, and some of the money raised could go towards environmental conservation.

Fedejerez is meeting the vineyard unions today in the hope of preventing a possible strike scheduled for September, which would affect the end of the harvest and subsequent vineyard operations. Union sources say they are hopeful of better mutual understanding over pay after previous meetings proved fruitless, and have been cultivating political support stressing the importance of the vineyards to the local economy.

Workers say the bodegas want to reduce wages and keep them on temporary contracts, neither of which is conducive to stable employment. Five years ago they agreed to some hard bargaining to help keep the bodegas going during the crisis and themselves in a job, but now they say that the bodegas have not only survived but become stronger if their results and press releases are to be believed.

6.3.16 Possible Buyer for Garvey?

After one Filipino businessman bought Beam, it seems that another might be interested in Garvey. Lucio Tan (not related to Andrew) is also in the distilling business, among others, and has his eyes on Garvey Complejo Bellavista and Zoilo Ruiz Mateos, both ex Nueva Rumasa and both in administration for the last five years. Any purchase would be extremely difficult since the bodegas have been run down over recent years and there are many complicated legal loose ends. One bodega interested in buying is said to have dropped the whole idea on learning of them while another very low offer was refused.

The main stumbling blocks are the brands, the mortgage and the workforce which numbers about 60. The Ruiz Mateos family transferred title of all the brands to henchmen in companies based in fiscal paradises. Without the brands the bodegas lose most of their appeal, not to mention value. The land and the buildings belong to Promontoria Holding, and any buyer would almost certainly have to pay off as many as 40 staff. When the bodegas went into administration their debt was 216 million euros. It will need a miracle to resuscitate them, so let’s hope this is it.

2.4.15 Probable New Owner of Garvey: Promontoria

The future of Garvey is still uncertain, but what seems apparent is that the investment company Promontoria BBE is interested in the brands and assets of the bodega. The latter has been a problem, however as ownership is scattered, and potential buyers would have to negotiate with all the individual owners to buy machinery, equipment, stocks (owned by the receivers) and the brands. Promontoria already have a mortgage on the buildings and land.

Negotiations are at an advanced stage, and the plan is to reassemble all the parts of Garvey under one owner and re-float it for its later sale as a going concern. If all goes well, this could be in about a month’s time.

The receivers also wish to sell off Zoilo Ruiz Mateos, another ex Rumasa bodega which is in receivership and which has the winemaking and bottling contract for the Sandeman brand. ZRM owns the Sandeman bodegas and vineyards.

The Complejo Bellavista, Jerez (foto:diariodejerez)

The whole affair is very complex and there are many questions in the air which are causing worry in the Sherry trade. People wonder what the Ruiz Mateos family might have gained from the sale of the brand names; why did Promontoria not negotiate directly with the brand owners and instead resort to an intermediary?

The Court embargo on the brand names prevented their use by anyone other than Bellavista (Garvey), thus tying the hands of the Ruiz Mateos so that sooner or later the brands would have become part of the receivership and the amount paid for them would go to the creditors. The Garvey executive who managed to secure the brands will be able to use them as a lever to keep his job with the new company.

Promontoria – which has some link to Banco Santander – could not really have negotiated directly with the Belize company about the brands because of the latter’s poor relations with the Santander who cut off funding, bringing about the receivership.

12.3.14 Single buyer sought for Garvey and Zoilo Ruiz Mateos

The administrator of bodegas Garvey (the huge Complejo Bodeguero Bellavista) and bodegas Zoilo Ruiz Mateos are looking for one buyer for both bodegas, since both the ex Nueva Rumasa concerns share production facilities. Both are still active going concerns, with Zoilo employing 70 people, and owning bodegas and 400 ha of vineyard. The hope is that the two companies can be sold within the next six months.

Some vineyard and stock of wine has already been sold in order to provide some money for the company to meet expenses. The sale will include all the Garvey brand names, and a protective embargo has been put on them. Also embargoed as a precautionary measure are Grupo Garvey registered names, such as Bodegas Garvey, Garvey, Garvey BV among others, actually owned by Engel Overseas Ltd of Belize.

The brands of Zoilo Ruiz Mateos do not have this problem, as the bodega is the exclusive supplier of Sherry for Sandeman. This relates to a deal from 2004 by which Nueva Rumasa took over the entire bodegas and vineyards of Sandeman - but not the brand – which Rumasa desperately wanted. Anyway, Garvey and Zoilo both belong to Back In Business, whose owner, Angel de Cabo is in preventive custody for fraud with Marsans, a travel company.

While there are no firm offers on the table yet, there has been interest from agricultural alimentary companies from outside the Sherry zone. Let us hope this sale can be brought to a successful conclusion, and that both bodegas – or all three if we include Sandeman – can get on with producing top notch Sherry without worry about their future.

News from Jerez 24.10.12

Garvey staff call meeting to find out what is going on

Garvey is two months in arrears with staff pay and has severe liquidity problems, so the unions have called meetings with the staff and management of the four Nueva Rumasa bodegas  (Garvey, Zoilo Ruiz Mateos Teresa Rivero and Valdivia) for Friday as they have had no news for months about what is going on with the receivership. Workers’ representatives will seek an early meeting with the judge of the mercantile court. 

Valdivia is awaiting a judicial decision before being put up for sale. Teresa Rivero – formerly CAYDSA – is in deadlock over the reduction of staff. The management of the bodega hopes to revert to the pre-Nueva Rumasa cooperative status as its sale was never properly finalised (paid for) by the Ruiz Mateos family. These are the two smaller bodegas, going through an abbreviated process. 

The bigger two, Garvey and ZRM have seen swingeing staff cuts – more than half at Garvey and over 20 at ZRM, and there has been little management since the judge removed management authority from Angel de Cabo, the actual owner of Nueva Rumasa. What with the liquidity situation, the bodegas have had problems securing raw materials, and have been steadily losing customers.

News from Jerez 23.6.12

Department of Employment approval appears to be imminent for the agreement between the workforce and the administrators of Bodegas Valdivia to terminate 10 out of 12 employment contracts. According to sources  who know, this is a likely prelude to liquidation, a fate also faced by Garvey's 2 main bodegas: Complejo Bodeguero Bellavista and Zoilo Ruiz Mateos, bought from Nueva Rumasa by Back in Business. The workforce have reluctantly agreed mainly because they have faith that Valdivia will be bought by another firm. Three are said to be interested, including an american multinational who would retain the workers.

Moving on. According to the latest report from Rutas del Vino de Espana (Spanish touristic wine routes) which covers 2011, the Jerez area is the most visited with a total of 480,767 visitors. The Rutas del Vino comprise 21 routes and 546 bodegas, and are to be thoroughly recommended.

News from Jerez 13.6.12

A Cadiz court has embargoed assets of the Ruiz Mateos family, Jose Maria, his six sons and one daughter, to cover a 94m Euro deficit at bodegas Zoilo Ruiz Mateos. This is on top of existing embargoes on two of the group's food companies (Dhul and Clesa) totalling 1.3bn Euros. The embargoes cover all family assets, direct or indirect, and investigation will take place if these prove insufficient. The judge reckons there are strong possibilities that the hitherto apparent solvency of the group may have attracted funding from private investors and this might have been channelled out of the group. The administrators have been criticised. The bodega was sold to Back in Business for 1 Euro in April 2011.