Diageo is expected to hoist a for-sale sign over the Chalone Vineyard in the Napa Valley after it was excluded last week from a $552 million deal with Treasury Wine Estates, of Australia.
The sale of its US-based Chateau & Estate Wines, including the Sterling and Beaulieu vineyards and Blossom Hill, did not include Chalone because Treasury already has enough chardonnay brands.
The spirits group, which has long been ambivalent about wine, acquired the Chalone Wine Group a decade ago for $260 million when it owned a string of vineyards and wineries across California and Washington state plus a stake in a Bordeaux estate.
The acquisition of Chalone was masterminded by Ivan Menezes, the Diageo chief executive, while he was head of Diageo North America.
Since then, however, the Chalone Wine Group has been whittled down and many of its remaining brands formed part of the sale to Treasury, including the Acacia brand, although the Acacia vineyard remains.
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The Chalone vineyard in Monterey County, which dates back nearly a century, makes wines including chenin blanc, pinot blanc, pinot noir, grenache and syrah in addition to chardonnay.
Diageo also retains ownership of Navarro Correas, the Argentinian winery that it has owned since 1996, and some wine brands that came with the acquisitions of Mey Içki, the Turkish spirits maker, and United Spirits, of India. Their future is not known.
However, the group is expected to retain Justerini & Brooks, its small Mayfair-based fine-wines business, which largely operates on a stand-alone basis within Diageo and is seen as complementary to its core premium core spirits business.
Diageo declined to comment.