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Whatever Happened to the Little Guy?

Who Really Rules California’s Wine Country?

by WILL PARRISH

California’s  North Coast wine industry is a sprawling, multi-billion dollar enterprise.  It encompasses  hundreds of thousands of acres of prime agricultural land in Sonoma, Napa, Mendocino, Marin, Lake, and Solano counties; commands millions of acre feet of the area’s ever-more scarce water resources; and frequently operates on a scale so industrial that at least one Sonoma County vineyard developer has shared heavy machinery with trans-Alaska oil pipeline builders (all the better to scalp the trees and vegetation from small mountains).  In addition to vineyards, the industry’s main ingredients range from a barrage of tasting rooms — those upscale-rustic environs omnipresent in downtown areas from Sonoma to Napa to Philo — to manufacturing services such as crushing, processing, bottling, labeling, storage, and shipping.

These activities are capital-intensive. For those with enough pre-existing wealth to shoulder the heavy up-front costs, the profits can be enormous.  Thus, as as the Redwood Empire has turned to the Red Wine Empire, with wine grapes supplanting timber as the kingpin of area agribusiness, ownership of the industry has grown increasingly concentrated.  Most vineyard acreage in the region is ruled by a small collection of massive multi-national corporate conglomerates, which typically boast annual revenues greater than a billion dollars.

Yes, that’s billion with a “B.”

To hear the patriarchs of the wine industry tell it, by contrast, the typical area wine-making operation is a “bucolic,” family-owned business (“bucolic” being the most well-worn adjective in the NorCal wine industry lexicon).  All these monocrop wine-grape plantations wrapping around mountains and running endlessly along ludicrously expensive tracts of land in the area’s hyper-inflated real estate market, we are led to believe, are actually locally-owned mom-and-pop ops, guided by ancient oenoligical traditions and steeped in small-town neighborly values.

The Mendocino County wine-growing enterprise, in particular, thrives on this fakery.  The front-page of the Mendocino Wine-Grape and Wine Commission’s web site touts the “multi-generational hands-on family farmers and winemakers” that ostensibly characterize the local industry.  Heidi Dickerson, paid aide to Wine Country Congressman Mike Thompson, writes a weekly column for the Ukiah Daily Journal in which she studiously avoids mention of the monolithic corporate underpinnings of the companies she profiles.

In reality, while there remain some area vineyards that possibly fit the Wine Commission web site characterization, a huge portion of Mendo’s vineyard acreage is owned by corporate conglomerates that belong to the billion-dollar-a-year set.  Most of the other wine-grape plantations are remotely controlled by decidedly non-local corporations with revenues of at least $50 million a year.

Take one of the wine industry’s biggest vertically integrated multi-national firms: Constellation Brands.  With revenue of roughly $4.7 billion in 2009, the scope of Constellation’s economic activity is greater than many of the member states of the United Nations. An integrated wine, beer, and spirits firm, it is both the largest wine company in the world in terms of sales by volume and the largest importer of beer to the United States.  It owns several large vineyards in Mendocino county, along with an even larger number in Sonoma and Napa.

Constellation Brands, in short, is about as opposite from a “multi-generational family farmer and winemaker” as Lockheed-Martin.

Yet, the “History” section of the company’s web site features the story of how its Clos du Bois vineyard division founder Frank Woods’ children selected the name of the vineyard. The web site of one of  Constellation’s many enormous subdivisions, Robert Mondavi Winery Corporation, leads off with the phrase “Robert Mondavi started in his family’s wine business?” before extolling at great length the philanthropic deeds of Mondavi and his wife on behalf of the small rural town where they used to live in Napa Valley.  Nowhere is there any indication that Robert Mondavi Corporation or Constellation Brands is a multi-billion dollar multi-national.

Over the years, wine industry robber-baron Jess Jackson has gone to perhaps the most absurd lengths of all to garb his company in a rustic wine-maker mystique.  The company no longer refers to itself as Kendall-Jackson, but rather as Jackson Family Wines.  In 1992, Jackson even elbowed his way into the position of inaugural president of the trade organization Family Winemakers of California (FWC).  That’s in spite of the fact that the organization was created the year before for the expressed purpose of promoting the “little guy’s point of view.”  A representative of Kendall-Jackson remains on the FWC board of directors to this day.

“Little Guy” Jackson landed in the upper half of Fortune magazine’s 2003 ranking of the world’s 500 richest people, with personal wealth of $1.8 billion.  Needless to say, he owns a prominent wine-grape estate in Philo, Mendocino County.

Unfortunately, with regard to the impact of these companies on the local economy and ecology, there is frequently little difference between mega-firms like Constellation Brands and smaller-scale outfits like, say, Beckstoffer Vineyards, a Napa County-based outfit that has been buying acreage all over southern Mendo in recent years, or Alder Springs Vineyards in Laytonville, which clear-cut 133 acres of oak forest to fill with new vines and trellises in 2002, causing a massive steelhead trout die-off in the Ten Mile Creek watershed due to erosion consequent on the clear-cut. 

In any case, relatively “local” vineyard operations such as these are usually only a degree removed from concentrations of vast corporate wealth.  Beckstoffer, though his company is nominally “independent,” is one of the top 20 owners of vineyard acreage in California. Alder Springs owner Stuart Bewley raised the capital for his current vineyard by selling his previous one, California Cooler, Inc., to the $3 billion Brown-Forman Corporation for $72 million in 1984 dollars.

More to the point, the profits generated by local vineyards accrue almost entirely to the wine industry big boys.  Just seven global wine conglomerates purchase the vast majority of wine grapes grown in the United States.  The majority of these are grown in California.  These companies produce 82 percent of all wine sold throughout the country.   The majority of these enormous companies are integrated with other units of Big Alcohol; namely, spirits and beer. 

The upshot? Regardless of who runs the actual grape production side, it’s the large multi-nationals that ultimately reap the benefits of the local wine-growing economy ? just as with virtually every other sector of America’s agribusiness enterprise ? at the expense of just about everyone and everything else.  That is, especially if you count the future generations who will reap the greatest consequences of wildlife habitat destroyed, forests clear-cut, water stolen and diverted, pesticides laden, and alternative futures foreclosed.

Mendocino County has a thriving economic localization and food sovereignty movement. Anderson Valley Advertiser publisher Bruce Anderson has aptly called it “the most interesting thing going” in this area.  If this movement takes its own stated goals seriously, it will inevitably have to confront the concentrated power of the local wine business (not to mention, coming soon, the consolidated marijuana industry).  Nearly 17,000 acres of Mendocino County’s best agricultural land is currently committed to wine-grape production.  Most of that is controlled by enormous financial interests that seemingly could care less about the well-being of Planet Earth, much less Mendocino County.  As long as such a circumstance exists, the possibility that Mendo Island will ever truly be a localized economy will remain a distant dream.

As Wendell Berry has written regarding the corporate agribusiness model in general, “To put the bounty and health of our land, our only commonwealth, into the hands of people who do not live on it and share its fate will always be an error.  Whatever determines the fortune of the land determines also the fortune of the people.  If history has taught us nothing else, it has taught us that.” 

In the coming weeks, CounterPunch will continue with this series of investigative pieces by WILL PARRISH on the North Coast wine industry.

WILL PARRISH can be contacted at wparrish@]riseup.net