Shinsegae acquires Napa Valley winery Shafer Vineyards for $250 million

South Korea’s retail giant Shinsegae Inc. has acquired US winery Shafer Vineyards for $250 million to consolidate its leadership in the domestic wine market.

Shinsegae Group said in a regulatory filing on Wednesday that its real estate development subsidiary, Shinsegae Property, has agreed to take over Shafer Vineyards, which produces high-quality wines or cult wines in Napa Valley, California.

Established by John Shafer in 1972, the winery is known for its flagship wines such as Hillside Select, One Point Five, Relentless and TD-9.

Located in Napa Valley’s Stags Leap District, the winemaker owns and cultivates over 80 hectares of vineyards.

Shinsegae Group is Korea’s largest wine importer through its wholesale distribution unit Shinsegae L&B Co., which operates wine shops under the Wine and More brand in Korea.

Once considered a high-end beverage in Korea, wine is now a daily commodity, with Shinsegae’s convenience store operator E-Mart Inc. posting over 100 billion won ($83 million) in annual wine sales.

In 2020, E-Mart revamped its wine section into an exclusive in-store boutique called WINE & LIQUOR to appeal to wine lovers.

Industry data showed Korea’s wine retail market grew to 1 trillion won last year, as wine overtook beer as the country’s No. 1 imported beverage.

Shinsegae said on Wednesday Shafer Vineyards also has growth potential in its property value, as Napa Valley saw its property prices rise at an annual average rate of 9% in the past few years.

Shinsegae Group Vice Chairman Chung Yong-jin founded Shinsegae Wine Co., a wine importer, in 2008 and later renamed it Shinsegae L&B.

Last year, Shinsegae Group said it is also entering the local beer market under the Lets Fresh Today brand to strengthen its presence in the Korean liquor industry.

Write to Han-Shin Park at phs@hankyung.com
In-Soo Nam edited this article.