The wine world has been rocked by the dramatic downfall of Marques de la Concordia Family of Wines (MCFW), a prominent Rioja producer with historical ties to literary giant Ernest Hemingway and the Spanish national soccer team, as reported by Wine-Searcher.
Once among Spain's top 10 wine companies, MCFW’s recent descent into bankruptcy has unveiled a complex web of financial mismanagement and alleged fraud.
From Boom to Bankruptcy
In 2018, MCFW, under the umbrella of The Haciendas Company, reported a turnover of EUR 48 million. Fast forward six years, and the company's fortunes have reversed drastically. By 2022, MCFW’s turnover had plummeted to EUR 33 million, with debts soaring to EUR 64.4 million. According to La Rioja newspaper, the company has now entered liquidation proceedings, and its assets are being put up for sale.
Allegations of Fraud and Mismanagement
The financial woes of MCFW are further complicated by serious allegations against Victor Redondo Sierra, a former director of The Haciendas Company. Metric Capital Partners, a shareholder in The Haciendas Company, has accused Redondo of siphoning EUR 45 million from MCFW, channeling funds through 32 different wine companies to obscure losses. In court filings, Metric Capital Partners claimed Redondo treated company assets as his own, making it impossible to trace the final destination of the funds.
Historic Assets on the Auction Block
MCFW's impressive portfolio includes renowned wineries such as Rioja Santiago and Lagunilla, as well as the Vega Reina in Rueda, Marqués de Monistrol Cava, and estates in the Duero Valley. The company's assets are now set to be liquidated, with DLM Insolvia handling the bankruptcy proceedings. Meanwhile, MCFW's parent company, The Haciendas Company, holds a 50% stake in Marques del Griñon, another historic wine producer.
The Broader Impact on Rioja
The collapse of MCFW comes amid a broader downturn in the Rioja wine region, exacerbated by the pandemic, Brexit, and rising energy costs. According to Grupo Rioja, the association of large Rioja wine companies, sales have been declining due to these external factors. However, critics argue that internal issues, such as the overproduction of red wine and low pricing strategies, have also contributed to the crisis.
Growing Unrest Among Wine Growers
The discontent among wine growers has reached a boiling point, leading to wildcat strikes and road blockades in Rioja. On February 6, wine growers used their tractors to block roads and demonstrated outside the Rioja wine board headquarters in Logroño. Their demands include the removal of unviable vineyards, higher grape prices, and more access to distillation funds. These strikes are a prelude to planned official strike actions that could bring the region to a standstill.
The Future of Rioja Wine
Amidst the turmoil, the Rioja wine region faces an uncertain future. Rebel wine producer associations, like Bodegas Familiares de Rioja (BFR) and ABRA, have called for significant reductions in vineyard areas to balance supply and demand. Recently, Melquior, another Rioja wine company, filed for bankruptcy, signaling further instability in the industry.
Conclusion
The downfall of Marques de la Concordia Family of Wines marks a significant moment in the history of the Rioja wine industry. The combination of financial mismanagement, external economic pressures, and internal sectoral challenges paints a complex picture of an industry in flux. As the situation continues to evolve, the eyes of the wine world remain on Rioja, waiting to see how this storied region will navigate its path forward amidst mounting conflicts and a rapidly changing market landscape.
Source: Wine-Searcher