M&A on Vineyards in Spain

Vineyards in Spain

Vineyards in Spain

If you are looking for a piece of vine to call your own, then Spain is the place for you!

As one of the top producers in the world, its wine regions range across the country. Over the last decade many wineries have revamped their installations to increase output for export, as well as promote the wine tourism industry.

The heart of the country´s wine produce is La Rioja, in the north-east, close to the Navarre region. Rioja wine is the leading designation of origin brand at home and abroad. The UK, Germany and the US are some of its international markets.

Major investments by the wineries in La Rioja, as well as a focus on exports and marketing efforts, have allowed them to weather the global economic crisis better than some of their peers.

Ribera del Duero wine – from vineyards in Castille-Leon in central Spain – is also becoming a familiar sight on supermarket shelves in central Europe and farther afield in Asia.

SURVIVAL OF THE FITTEST

While the larger Spanish wineries have been able to combat the crisis, their smaller competitors have struggled, particularly last year when production slumped due to bad weather.

World wine production dropped 6 percent in 2012 to the lowest level in at least 37 years on smaller grape crops in France, Spain and Argentina, according to the International Organisation of Vine and Wine (OIV). Spain wine production fell 11 percent after weather damage to vineyards.

With stocks already depleted, and as they weigh up the impact on profitability of another year of unfavourable weather conditions, some enterprises have decided to take advantage of growing investor appetite for Spanish grapes and sell up.

Argali Abogados currently has the mandate to sell two wineries, one in La Rioja and one in Navarre.

A INVESTMENT WITH CORKING REWARDS

An increasing number of wealthy individuals and investment funds are turning to the bottle – as an investment option of course! Potential buyers are eyeing wine production on a large scale and vineyards in places like Spain are more cost effective as land and property prices are low, but the wine´s reputation is solid.

These investors are not looking for high current yield but are drawn to vineyard properties which rise and fall along with the prices of residential markets and land values. Property prices in Spain have dropped nearly 30 percent since 2008.

After seeing all the facts and potential growth in the vineyard sector, don’t you think it is the right time to invest for the long term?

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