Spanish wine groups diversify into oil sector - Brief Article

Eurofood, Feb 17, 2000

Two Spanish drinks groups are to diversify into the olive oils sector. Gonzalez Byass, the wine and spirit producer, and Freixenet, the cava producer, are forming separate joint ventures which will see them move into the food sector for the first time.

Gonzalez Byass will take a 51% stake in Hacienda de Bracamonte, a joint venture which will be managed by the Zulategui family and will produce olive oil and vinegar at facilities owned by the Hojiblanca oil group. The drinks group will then sell the oil and vinegar via its own distribution network. The aim is to produce small volumes (a million litres or so) of premium oils and vinegars with a substantial profit margin.

Freixenet's venture is currently at the planning stage, but should see the cava producer join forces with the Borges group, one of the biggest edible oil producers in Spain. A small scale venture is already planned between Freixenet and Cevipe, one the cava group's existing partners in its wine business but which also produces olive oil. However, the winery is keen to maximise the potential of its international distribution network, and is negotiating a much larger deal with Borges.