Emperador to double vineyard area in 2 years

MANILA, Philippines - Emperador Inc., the liquor firm of property tycoon Andrew L. Tan, plans to double its vineyard land to 2,000 hectares in the next two years to significantly boost its brandy production capacity and efficiency.

The integration of the production process will allow the world’s largest brandy producer to further expand its global market reach, a top company executive said yesterday.

“With Grupo Emperador Spain S.A. continuously looking out to acquire more vineyard land in Spain, we expect that out total vineyard property will reach close to 2,000 hectares by 2016,” said Emperador Spain managing director Jorge B. Domecq.

In a disclosure, Emperador said wholly-owned subsidiary Emperador Spain signed an agreement to acquire 230 hectares of vineyard land in Toledo. Prior to this acquisition, Emperador owned around 1,000 hectares of vineyard land.

The vineyard is adjacent to the Vinedos del Rio Tajo operated by Bodegas Las Copas, a joint venture between Emperador and González Byass. Early this year, Emperador Spain invested P3.7 billion for a 50-percent stake in Bodega Las Copas to improve its production base.

“With this total integration in our brandy production, we are in the best position to continue making Emperador the number one brandy in the world. That gives us the capacity to expand our global market,” Domecq said.

Emperador sold 33 million cases last year, cornering almost 20 percent of the global brandy market.

The liquor firm earlier invested P5.8 billion in vineyards, distilleries and bodegas in Spain with the acquisition of Bodega San Bruno S.A.

Emperador said it plans to expand Vinedos del Rio Tajo, a vineyard beside River Tajo, the longest river in the Iberian Peninsula.

“Our beautiful vineyard in the valley of River Tajo is the largest vineyard in Spain that specializes in wine grapes for brandy distillation,” Domecq said.

Domecq said the riverside vineyard will use state-of-the-art technology in vineyard operation and management, with yield expected to hit capacity of 30,000 kilograms (kg) per hectare versus Spain’s industry-wide average yield of around 6,500 kg.

“This means that in every hectare of this vineyard land, we will be able to harvest five times more wine grapes. This will very well support the raw material requirements for our brandy production,” Domecq said.

Emperador, the top selling spirit in the Philippines with a dominant 50-percent share, records a turnover of around 1.1 bottles everyday. The liquor maker targets to double its profits to nearly P12 billion by 2017 from P5.8 billion last year through the expansion of local and international operations.

The company is behind brands Emperador, Generoso and Emperador Light brandies and a line of flavored alcoholic beverages called The Bar.

Emperador is part of Tan’s Alliance Global Group Inc., which is also into property (Megaworld Group), fastfood (McDonald’s franchise operator Golden Arches Development Corp.) and hotels and casino (Travellers International Hotel Group Inc.). In May, Emperador took over the spirits business of the world’s biggest premium drinks group. It bought Whyte & Mackay for $724.24 million, making its largest acquisition to date.