Two of Spain’s most historic wineries are struggling to sell
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Global wine consumption is slowing, and the impact is being felt at the very top of the industry.
Two of Spain’s largest and most historic wineries, Codorniu and Bodegas Faustino, are currently up for sale. Despite posting record profits and strong operating results, both companies have struggled to attract buyers in an increasingly cautious market.
The sharp slowdown in wine consumption worldwide, coupled with structural challenges in vineyard production has cast uncertainty over future growth prospects.
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Record profits fail to secure buyers
Both Codorniu and Bodegas Faustino were in different stages of the sales process, yet both transactions stalled around the same time.
In the 2023/2024 fiscal year, Codorniu achieved record profits. Its EBITDA reached €39 million, representing a 15 per cent increase on the previous year. When the Carlyle fund announced its intent to sell its 68 per cent stake in the wine company following record sales, the move was met with great anticipation in financial circles.
The Carlyle fund hoped to double their initial 2018 investment of €390 million, and set the asking price to €700 million. However, the sale is still languishing in corporate purgatory. Many experts suggest that while Codorniu’s financial performance is solid, they don’t believe they will secure a satisfactory deal.
Bodegas Faustino also faces a cooling industry
The sale of Bodega Faustino was commissioned more recently, yet it has encountered similar hurdles. Again, despite achieving its best results in recent history, with almost €240 million in sales and €50 million in EBITDA, there has been little interest in acquisition.
Industry observers point to a broader slowdown in mergers and acquisitions within the wine sector. Investors are increasingly prioritising resilience and long-term growth visibility, both of which are harder to guarantee in a market experiencing contraction.
Wine industry decline
The issue does not lie exclusively with Codorniu or Bodega Faustino, rather it reflects a shift in the valuation of the wine industry as a whole. Rising production costs, inflationary pressures and changes in drinking patterns, particularly among younger consumers, have all effected the sector.
Wine consumption worldwide is slowing year-on-year. A significant decline in viable vineyards is also exasperating the problem. In Spain, vineyard surface area is shrinking by approximately 1.5 per cent annually. In France, authorities have announced plans to uproot 32,500 hectares of vines in an effort to rebalance supply with falling demand. This structural adjustment highlights the depth of the slowdown affecting traditional wine-producing regions.
For now, despite their strong balance sheets and historic brands, Codorniu and Bodegas Faustino remain caught between solid operational performance and a cautious investment climate shaped by the global wine consumption downturn.
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