Beaulieu Vineyard to Dedicate Rutherford Wine Operations to Napa Wines; Move Emphasizes Continued Commitment to Quality.

Business Editors/Wine Editors

NAPA, Calif.--(BUSINESS WIRE)--March 29, 2004

Beaulieu Vineyard (BV), a leading Napa Valley winery with over 100 years of innovation and excellence in winemaking, announced that it is structuring its winery operations to provide greater focus on its Reserve and Appellation wines at its Napa winery, and to concentrate on its non-Napa appellation wines at the company's Sonoma and Central Coast production facilities.

Newly appointed Vice President of Operations, Steve Spadarotto, announced the plan, saying the change will streamline operations and give the BV winemaking team of Joel Aiken, Jeffrey Stambor and Bob Masyczek more resources, time and creative focus to spend on the world-class BV Reserve and Appellation wines.

"BV has some of the best and most acclaimed vineyards in the Napa Valley and is committed to making the highest quality wines," said Spadarotto. "By structuring our operations in this way, we will ensure that the higher end Napa wines that established BV's reputation remain our top priority."

This initiative is part of the "focus on quality" strategy set out by Ray Chadwick when he became president of Diageo Chateau & Estate Wines after Seagram was purchased by Diageo in 2002. Last year, Sterling Vineyards finished a major five-year renovation of its winery facilities and vineyards. French brand Barton & Guestier (B&G) recently completed an overhaul of its winemaking practices that has greatly increased wine quality.

"Diageo is committed to the wine business and to producing world-class wines," Chadwick said. "We believe the way to succeed in the wine industry is to focus on quality, and we will continue to invest substantial resources in our wineries and vineyards to ensure that we keep making top quality wines."

In addition to the changes at the Rutherford winery, non-Napa appellation wines, such as BV Coastal Estates and a new brand offering which will carry the endorsement of BV, Century Cellars, will be bottled out of the larger Carneros production facility in Sonoma. BV winemaker Ken Greene will oversee production of both Coastal Estates and Century Cellars.

"We are very proud of the quality represented by our wines from other appellations, and feel that by assigning a single winemaker to oversee their production we can ensure their continued quality and value," Spadarotto added.

BV Coastal is the top selling coastal brand in the U.S. in its price segment, according to Information Resources, Inc. (IRI), for the current 26-week period. It has a suggested retail price of $10.99. The brand was re-launched as BV Coastal Estates in January to help reinforce the coastal image consumers enjoy.

Century Cellars will arrive on shelves this spring and will retail in the rapidly expanding $5-$10 price range. It will be available in four varietals, Chardonnay, Merlot, Cabernet Sauvignon and Sauvignon Blanc. It will come in both 750 ml bottles and magnums.

Beaulieu Vineyard wines are produced by Diageo Chateau & Estate Wines, which is part of Diageo, the world's leading premium drinks business. DC&E also produces and markets Sterling Vineyards, Sterling Vintner's Collection, Solaris, and Blossom Hill, as well as the French wines of Barton & Guestier. DC&E is also a leading importer of classified Bordeaux in the U.S. and F.E. Trimbach wines from Alsace. A collection of Burgundy estate-bottled wines and several other fine European wines complement the selection. Diageo's broader business includes: Smirnoff Vodkas and flavored malt beverages, Guinness, Bailey's Irish Cream Liqueur, Crown Royal Canadian Whiskey, and Captain Morgan Original Spiced Rum, as well as many other of the world's leading premium drinks brands. Please enjoy our quality responsibly.