About Viña Concha y Toro

Viña Concha y Toro S.A. produces and sells wines. The company owns and operates vineyards that grow grapes for use in its wine-making operations, vinification plants (which convert grapes into wine), bottling plants and its wine distribution network. Within Chile, the company owns and operates vineyards located in Chile’s ten principal wine growing regions. In addition to its properties in Chile, the company owns a winery and vineyards in Mendoza, Argentina, and a winery and vineyards in California, the U.S. The company sells its premium wines under brand names, including Don Melchor, Carmín de Peumo, Gravas del Maipo, Amelia, Terrunyo, Marques de Casa Concha, Gran Reserva Serie Riberas, Casillero del Diablo, Trio and Late Harvest. The company sells its varietal and bi-varietal wines under the brand names Sunrise, Concha y Toro and Frontera. In addition, the company’s subsidiaries, Viña Cono Sur, Sociedad Exportadora y Comercial Viña Maipo SpA. (Viña Maipo), Viña Canepa, Viña Palo Alto, Viña Maycas del Limarí and Trivento, market their premium, varietal and bi-varietal wines under the brand names Cono Sur, Isla Negra, Maipo, Canepa, Palo Alto, Maycas del Limarí and Trivento. The U.S. subsidiary sells a portfolio of brands, including Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary, 1000 Stories, and Adorada. The company sells wines under the brand names Tocornal, Clos de Pirque, Exportaci?n and Fressco. The company conducts its operations directly and through subsidiaries. Its distribution business in Chile is conducted through its wholly- owned subsidiary VCT Chile. In 2000, the company formed a fully-owned sales and distribution subsidiary in the United Kingdom, Concha y Toro UK Limited (Concha y Toro UK). This subsidiary commenced operation in 2001. In 2008, Concha y Toro established distribution subsidiaries in Brazil, Sweden, Finland and Norway to strengthen its sales in those countries. In 2010, Concha y Toro established a distribution subsidiary in the Asian market, choosing Singapore as its base, in April 2011, the company completed the acquisition of Fetzer Vineyards in the United States. In 2011, the company entered into a joint venture with Banfi to import and distribute Concha y Toro, Trivento and certain brands belonging to Fetzer into the U.S. market. The company’s wholly-owned subsidiary, Viña Maipo, exports Viña Maipo brand wines and holds investments in affiliated companies. The company’s wholly-owned subsidiary, Viña Cono Sur S.A. engages in the sale, both in the local and export market of Cono Sur and Isla Negra brand wines. In addition to producing and bottling wine under its own labels, the company has a license from Viñedos Emiliana to use Viñedos Emiliana’s brand name in Chile. The company bottles and sells in Chile for its own account a portion of its varietal wine production under Santa Emiliana’s labels, paying royalties in exchange for such rights. In addition, under a contract with Viñedos Emiliana, the company bottles, wine produced by Viñedos Emiliana for a fee, which is sold by Viñedos Emiliana for its own account under Viñedos Emiliana’s labels in export markets. Company Vineyards As of December 31, 2018, the company had approximately 12,814 cultivable hectares. This includes leases of 368 hectares in Chile and 170 hectares in the USA. As of December 2018, 91% of the cultivable land owned or leased by the company was planted with wine-producing grapes in various stages of maturity. Approximately 68% of the company’s planted hectares in Chile are planted primarily with five types of noble grapes, such as Cabernet Sauvignon, Merlot, Carmenere, Chardonnay and Sauvignon Blanc. The company’s remaining land under cultivation is planted mainly with Syrah, Pinot Noir, Viognier, Pinot Blanc, Pinot Gris, Chenin Blanc, Riesling, Gewurztraminer and Sangiovese grapes. Business Strategy The company’s business strategy seeks to sustain attractive growth rates and achieve an even greater brand penetration and visibility in the different markets. The company focuses specially on growth in the premium category, a very attractive segment due to its growth potential and prices, which have enabled it to improve the sales mix and increase its average sales price. Domestic Distribution The company has its own direct distribution capacity through its wholly-owned subsidiary, VCT Chile. VCT Chile serves approximately 17,000 customers throughout Chile, making it a major wine-oriented distribution company in Chile. As of December 2018, VCT Chile had 7 regional-logistic centers throughout Chile and a Logistic Center Vespucio 2, located in the Metropolitan Region. In addition, the company restructured its commercial area. Domestic sales force is made up of 200 people, for all product categories. Principal Export Markets The company’s sales in export markets include shipments to third parties from Chile and sales of the company’s own distribution subsidiaries from Chile, Argentina, and U.S. Its sales in export markets are distributed among the premium, varietal, bi-varietal, sparkling and popular wine segments. The company also sells bulk wine internationally. As of December 31, 2018, the company’s principal export markets were in Europe, North America, Latin America, and Asia. Bulk Wine Exports In 2018, the company sold 7,139 thousand liters of bulk wine overseas. Distribution in Export Markets The company’s products are distributed in approximately 130 countries by independent distributors, including four governmental liquor authorities, and by own distribution subsidiaries. In various countries, it sells wine through a second and third distributor under the brand names of its subsidiaries Cono Sur, Maipo and Canepa. The company sells mostly ‘F.O.B. Chilean port’ to its distributors in export markets. Trademarks The company has Chilean registrations for its major trademarks, such as ONCHA Y TORO, CASILLERO DEL DIABLO, DON MELCHOR, AMELIA, TERRUNYO, MARQUES DE CASA CONCHA, SUBERCASEAUX, TRIO, SBX, SUNRISE, SENDERO, FRONTERA, TOCORNAL, MAIPO, and TENTA. Trademarks registered by subsidiaries include, CONO SUR, ISLA NEGRA, OCIO, 20 BARRELS, BICICLETA, PALO ALTO, MAYCAS DEL LIMARÍ, TRIVENTO, EOLO, PAMPAS DEL SUR, LA CHAMIZA, FETZER, BONTERRA, FIVE RIVERS, JEKEL, COLDWATER CREEK, EAGLE PEAK, SUNCTUARY, SUNDIAL, VALLEY OAKS, BEL ARBOR, STONY BROOK, FIVE RIVERS, PACIFIC BAY, and 1000 STORIES. Also it has registrations for KROSS and its family-brands KROSS CERVECERIA INDEPENDIENTE, KROSSBAR, KROSS CERVEZA DE ACA-COCINA DE ACA. Suppliers The company works with three bottle suppliers, being Cristalerías de Chile S.A. the supplier of its various bottle requirements. Research and Development As of December 31, 2018 research expenses amounted to ThCh$1,603,136. Competition The company’s competitors in the premium segment are large and medium-sized Chilean wineries, primarily Santa Rita, Viña San Pedro Tarapacá S.A., Bodegas y Viñedos Santa Carolina S.A., Viña Undurraga S.A. and Viña Errázuriz S.A. History Viña Concha y Toro S.A. was founded in 1883 by Don Melchor Concha y Toro and Don Ramón Subercaseaux Mercado. The company’s deed of incorporation was executed in 1921 and the company was registered in the Registro de Comercio de Santiago in 1922.