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50 percent of the methode champenoise or high-end market and
8.8 percent of the total domestic market. For the period 1985
through 1994, the low-end and high-end champagne markets fared
differently. Sales of champagne produced by means of the Charmat
process or transfer method (the low-end market) fell steadily
between 1985 and 1994. In 1994, sales of the lower priced
domestically produced Charmat process and transfer method labels
dropped 11 percent, when compared to 1993. Canandaigua’s
sparkling wine sales reflected that trend in 1994, declining by
about 8 percent from 1993. In sharp contrast, led by Korbel’s
6-percent increase in champagne sales for 1994, 1994 sales by
domestic methode champenoise producers as a whole grew 4 percent,
when compared to 1993.
Mondavi markets premium still wine under seven different
labels, but it produces little or no sparkling wine.3
Other Factors: Dr. Spiro testified that, as of the
valuation date, compared to Mondavi and Canandaigua, Korbel was
smaller, more profitable, and growing more slowly. It also had
3 Both Drs. Bajaj and Spiro state that Mondavi does not
produce any champagne. Gary Heck testified, however, that
Mondavi produces “about 1500 cases [of champagne] that they only
sell through their wine shop, kind of like we do with still
wines.” Even if Mr. Heck is correct, the amount of champagne
produced by Mondavi is negligible in comparison with its wine
production, which, for 1994, was 4,274,000 cases. Thus, as a
practical matter, Mondavi was a producer of still wines, whereas
Korbel was a producer of high-end champagne and a small amount of
brandy.
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