Tempo Beer Industries, Israel’s second largest beverage company & largest brewer, has purchased a controlling 38.94 % of Barkan Wine Cellars, Israel’s second largest winery, for US $ 6.62 million.

Barkan’s owners, Zivit Shapir, Shmuel Boxer and Yair Lerner, who previously held a 76.35 % stake, will now be left with a 37.41 % share.  Boxer & Lerner who act as joint managing directors will continue in their posts. Tempo have an option to buy out the remainder of their shares within a year.

Tempo based in Netanya is the producer of Israel’s best selling beers,  Goldstar & Maccabee, and  importer of Heineken, who own 21.85 % of the company. It is also the bottler for Pepsi Cola & local soft drinks brands like Jump. Tempo has annual sales of  US $125 million and employs 1,000 workers. Jacques Bar, Tempo’s Chairman, said: “ As the second largest drinks producer in Israel and as the leader in the beer sector, we attach great importance to joining up with the second largest winery in Israel.”

Barkan Wine Cellars own two wineries: in the Barkan Industrial Area,  and a state of the art new property at Kibbutz Hulda. They have about 25 % of the Israeli wine market. In recent years they bought Segal Wines, which they successfully brand as an independent winery, even though Barkan & Segal wines are produced in the same place. They produce one of  Israel’s best selling vodkas, Keglevich and one of the country’s most recognizable Brandies, Stock 84, which they produce under licence. Through the Segal purchaes, they also became major importers, representing wineries such as Mondavi & Frescobaldi and international brands such as Martini Vermouth and Jameson’s Irish whiskey. Barkan Wine Cellars was established in 1990 after taking over the assets of the bankrupt Stock / WEST Winery.  Annual sales reach over US $ 30 million.

The purchase is part of a continuing battle between Tempo & Coca Cola Israel, which  up to now has been mainly fought  over cola and beer. This latest move  is to challenge Coca Cola Israel as the leading ‘total beverage company’ by adding wines & spirits to the portfolio. Coca Cola Israel have the bottling rights to Coca Cola and are the leading soft drink company in Israel. They also own Carlsberg Israel , the country’s number two brewery, which  produces  Carlsberg & Tuborg,  and imports  Guinness.  Their subsidiary, UDV Israel has distribution rights for Diageo, the leading spirits company in the world, including  brands from Johnnie Walker Whisky, Smirnoff Vodka to Bailey’s Irish Cream Liqueur. They  also distribute the wines of the small Tabor Winery, which is situated in the Lower Galilee.

There has been speculation that Tempo would enter the wine market for some time. Now, it remains to be seen what impact the new owners will have on Barkan the winery, and it will be interesting to see if other multi nationals show interest in the wine industry.

Sep.2004