A large wine and spirits distribution agency has purchased a crippled Niagara-on-the-Lake winery.

Made official Tuesday, Diamond Estates Wines and Spirits gained approval from court to buy the bankrupt Niagara Vintners Inc., which markets under the 20 Bees brand.

Diamond Estates and Spirits is one of the country's largest beverage agencies. The company distributes and markets several Niagara wineries: Birchwood Estate, EastDell Estates, Lakeview Cellars and Dan Aykroyd Winery.

Diamond president Murray Marshall said the company will immediately take control of the NVI property and will continue selling the 20 Bees brand of wine. Purchasing the more than 30-acre property on Niagara Stone Road will also allow Diamond to use the existing production facility to make the company's other wines, Marshall said.

"Niagara-on-the-Lake is one of the best locations for wine production," Marshall said. "The 20 Bees line is established and we will continue that tradition. Acquiring the property also satisfies our expansion plans. Everything fits in perfectly."

Marshall said it will take six to eight months to reorganize the company. He is hoping to press at least 90 per cent of Diamond's grapes out of the Niagara-on-the-Lake facility. The site will also be remodeled to include a hospitality and retail facility for visitors, Marshall said.

NVI announced the company had gone into receivership in late February. Poor management plans and an inability to sell the wine have been among the reasons behind the company's problems.

The winery was formed in 2004 by grape growers that had a vision of creating large quantities of quality wine at an affordable price while guaranteeing a market for their own grape crops.

With more than 4,400 acres of vineyards among the 19 growers, NVI began producing its first vintage in 2005.

In 2006, the company built a 70,000-plus sq. ft. manufacturing facility on the outskirts of Virgil with a temporary trailer installed for use as office space and later as a retail facility. The goal of NVI was to produce 1.6 million litres of wine per year.

The assets include the winery's production facility on Niagara Stone Road; 21,000 cases of packaged wine and more than 3.6 million litres of unbottled wine. The assets are worth more than $32 million, with NVI's debt load at $39 million, as stated in the company's receivership documents.

Robert Bougie, senior partner with Deloitte, the company that handled NVI's receivership, would not disclose how much Diamond paid for the NVI facilities, but did state that the amount will not cover the $40 million owed to creditors, which includes $19 million to Bank of Nova Scotia.

Hillary Dawson, president of the Wine Council of Ontario, said Diamond's acquisition is great news to the wine industry. "Diamond has a proven track record in the industry," Dawson said. "Diamond is committed to promoting and marketing VQA Ontario wines. They have a new, strong brand and they will continue the tradition."