Foley sets his sights on Australia

U.S. wine magnate buys minority share of Australian wine company Wineinc

William Foley is showing no signs of slowing down with his wine acquisitions. The California vintner and finance executive has purchased a non-controlling interest in an Australian wine company, Wineinc, which produces value-oriented brands, mainly from South Australia. Details of the sale were not disclosed.

The partnership with Wineinc will allow Foley to build on his already impressive wine portfolio. “Their highly successful wines represent the best of Australia and will allow us to expand the global reach of our portfolio,” he said in a statement.

Husband-and-wife team Bruce Clugston and Fiona White founded Wineinc in 2004. They started the business mainly as a distribution company but soon decided to make their own wines. Wineinc produces and distributes six Australian brands including Gotham, Wine Men of Gotham and Stalking Horse.

Clugston had originally been looking for separate partners to help with capital and distribution at Wineinc. “The assistance in distribution in the U.S. market was something that we had to resolve,” he said. Clugston was in discussions with several people before he approached Foley about a partnership. Foley Family Wines will provide capital and Wineinc will have access to Foley’s U.S. distribution network.

The move into the Australian wine market isn’t Foley’s first venture outside of the U.S. When the New Zealand government softened its rules on foreign investing in 2009, Foley moved in and purchased the publicly traded New Zealand Wine Fund and its associated brands, Vavasour, Goldwater and Clifford Bay.

A chairman at two Fortune 500 companies, Fidelity National Financial and Fidelity National Information Services, Foley entered the wine industry in 1996 when he founded Santa Barbara’s Lincourt Vineyards and established Foley Family Wines. Since then he has expanded his portfolio to over 12 wineries including Merus in Napa Valley, Firestone Vineyard in Santa Barbara and Three Rivers in Washington state. In 2008 he purchased Sebastiani, followed shortly by Kuleto Estate and Chalk Hill winery. He recently became the principle investor in Crushpad, the custom-crush facility that started in San Francisco, which is moving to Sonoma County.

As part of the deal, Clugston has been appointed president of Foley Family’s New Zealand portfolio and Wineinc has purchased a small share of that company. According to Clugston, there won’t be any major changes to Wineinc, but he said the partnership would help it expand its presence in the U.S. at a time when sales are suffering and distributors are trimming the number of Aussie wines they offer. “It requires a bit of an entrepreneurial approach to market wine from Australia,” he said.