Has the "Perfect Storm" Claimed Kluge Estate?

For the past few weeks, rumors have swirled around the twittersphere that Kluge Estate winery was in trouble. Such rumors are not unusual, as Patricia Kluge has her detractors, who seem intent on undermining her effort to produce high quality Virginia wine on her estate south of Charlottesville. But this time, despite denials from the Kluge folks, the rumors were too specific, too detailed to ignore.

Late Friday, William Moses, Kluge's husband and CEO of the winery, issued a statement that was at once an acknowledgement of troubles and a defiant vow to stay alive. It isn't posted yet on the winery's website, so I'll paste it here in its entirety:

This is sad news for the Virginia wine industry. Kluge has made a major investment, including hiring famed flying winemaker Michel Rolland as a consultant. There have been missteps, to be sure - most notably charging more than $60 for their New World Red blend, which now sells more reasonably under $30. Consistency has also been a problem, as winemakers have paraded through over the winery's ten years. But the Kluge Estate wines, including the SP sparkling and the Albemarle viognier and rose, have generally been very good, and have achieved good distribution. Kluge and Moses have also been vocal advocates for the Virginia wine industry. This winery's collapse could send the message that Virginia is not a good market for wine investment, even as the overall quality of the wines improves to impressive, world-class levels.

So what will happen now? Moses' reference to the banks trying to "dismantle" the property is most alarming - rumors that I have not been able to confirm (Moses was not available for comment late Friday) have the banks threatening to rip out the vines and sell off the property for housing lots. Others have a high-profile investor (the "promising partners"?) interested. The news stories, speculation, and gossip are only just beginning. As Moses says, stay tuned ...

Comments

[Todd]

This is another reminder that a winery and vineyard are a business enterprise. Not only must they craft wine or grow grapes which are marketable, but they must plan and make economic decisions just like any other business.

[Destcellars]

This is too bad. We've certainly had winery partners of ours all over the world facing incredible challenges and our hearts go out to them. We really believe it's very difficult to position yourself as a leading winery in a very crowded space.

Last statistic we heard, "Over 250,000 different wines offered in the United States". Incredibly challenging to compete for shelf space, cellar space and especially when you're in a "growing and developing market" such as VA.

Hope things turn out for the best

[Stephen Ballard]

Doesn't sound too hopeful, given the latest twists. The banksters are definitely playing hardball. See this update from the local Charlottesville paper, "c-ville":

http://www.c-ville.com/index.php?cat=11431101084614805&ShowArticle_ID=11100111103995321