Southern Premium Vineyards has acquired 35 vineyards from wine group Casella Family Brands.
The sale comprises 7215 hectares across South Australia and NSW, including water entitlements and plant and equipment attached to the vineyards. The vineyards are located across the Clare Valley, Langhorne Creek and Limestone Coast regions of South Australia, and the Riverina precinct in NSW.
Southern Premium Vineyards (SVP) already owns about 460 hectares of vineyards in the Coonawarra and the Barossa Valley.
It is owned by Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers.
SPV director Nick Gill said: “SPV’s strategy is to offer wine companies a multi-regional grape supply solution for their winegrape sourcing as an alternative to owning or leasing vineyards – and a partnership with Casella is a perfect fit with this strategy.”
John Casella said: “We are pleased to be entering this partnership with SPV, a platform of PSP Investments, which is an investor with a proven track record of successful long-term investment in agribusiness in Australia and around the world.
“We are confident that SPV will continue to deliver the quality and consistency of the grapes we require, safeguard and preserve the vineyards and ensure the wellbeing of employees.”
PSP Investments senior managing director, Real Assets and Global Head of Natural Resources Investments, Marc Drouin, said: “Our commitment to sustainable farming combined with our long-term investment horizon allows PSP Investments to lever Australia’s unique global competitive position for its quality winegrapes.
“Casella is a best-in-class group with an impressive portfolio of vineyards in some of the country’s most highly regarded wine regions.
“This acquisition is a cornerstone investment for both SPV and PSP Investments’ global wine portfolio.”
Casella’s strategic review
Casella put most of its vineyards in NSW and South Australia on the market in May, following a strategic review of the business.
The review by Australia’s largest privately owned winemaker led to a decision to divert the company’s funds into brand-building rather than running vineyards.
The Australian described the move as “the biggest single sale of vineyards as one lot in living memory in Australia”, which is anticipated to raise tens of millions of dollars for Casella.
Casella has entered into long-term grape supply agreements for all 35 vineyards to ensure ongoing supply for its established brands.
John Casella said: “The company is in a sound financial position, having recently experienced global record sales for Yellow Tail during the COVID-19 pandemic.
“While demand has stabilised, we are forecasting future growth due to ongoing investment in our brands supported by a strategic innovation pipeline.
“The intended strategic partnership will allow us to focus on strengthening our brands globally, and therefore deliver positive outcomes for the Australian wine industry.”
Some Casella-owned vineyards located in the Riverina and Barossa were not included in the sale, as well as its Victorian vineyards, which include Baileys of Glenrowan and Morris of Rutherglen.
Plans for new alcoholic beverage brands
The company plans to use the funds to build its growing wine brand portfolio, create new alcoholic beverage brands – in categories such as spirits, beer and seltzer – and expand its whisky distilling business.
Coca-Cola Europacific Partners sold its stake in Australian Beer Co (ABCo), which is located next door to the Casella winery in Yenda, NSW, to Casella Family Brands in January.
Coca-Cola Europacific Partners vice-president and general manager for Australia, Pacific & Indonesia, Peter West said: “Casella Family Brands is a highly respected partner, and when we approached them as part of our strategic review of our beer and cider strategy, John and his team were keen to explore the opportunity to take full ownership of ABCo. We have had a terrific partnership with Casella Family Brands for almost a decade now and exit on good terms. We genuinely wish them
the very best for the future.”
John Casella said: “ABCo is an exciting business led by a state-of-the-art brewery, and we welcomed the opportunity to acquire full ownership. We will endeavor to maintain the excellent relationships the CCEP team has established with customers in the beer and cider category in Australia. We have enjoyed partnering with CCEP to grow ABCo’s business, and we both leave the joint venture arrangement on excellent terms.”.
Casella Family Brands took over full ownership of the Australian Beer Co on July 1.