Australian Wine Holdco Limited (AWL) has combined Accolade Wines with Pernod Ricard’s Australian, New Zealand and Spanish wine businesses.

Pernod Ricard Winemakers CEO Bryan Fry told The Australian the move would allow it to focus on its portfolio of premium spirits and Champagne brands, which include Mumm, Perrier-Jouët, Beefeater, Jameson and The Glenlivet.

“The agreement with Australian Wine Holdco Limited (AWL) is a positive step forward and will give our wine brands the focus they need to become stronger, more competitive, and better positioned to seize new opportunities globally,” he said.

“We look forward to the opportunities that lie ahead and remain dedicated to delivering outstanding and award-winning wine brands.”

Australian Wine Holdco Limited (AWL) – a consortium of international institutional investors that comprises funds backed by Bain Capital Special Situations, ICG, Capital Four, Sona Asset Management and Samuel Terry Asset Management – said it intended to “create a more efficient and more diversified global wine business by combining wholly-owned Accolade Wines with Pernod Ricard’s Australian, New Zealand and Spanish wine businesses”.

“The combined business will have a more diversified portfolio of highly complementary old and new world wine labels, operations in every continent, and be in a better position to meet the challenges facing the wine industry, providing a more certain and financially sustainable future for the business,” AWL said.

The Pernod Ricard assets to be included in the combined business comprise a wide portfolio of well-known and loved international brands operated by Pernod Ricard Winemakers with over 10 million 9L cases produced annually from three origins.

These include Jacob’s Creek, Orlando and St Hugo from Australia, Stoneleigh, Brancott Estate and Church Road from New Zealand and Campo Viejo, Ysios, Tarsus and Azpilicueta from Spain. The assets are an integrated platform from vineyard to bottle including seven wineries.

Accolade Wines is a fully integrated business, managing the entire supply chain from grape to glass. Accolade’s rich portfolio is made up of distinguished wine brands including Hardys, Grant Burge, Banrock Station, St Hallett and Petaluma, and modern, innovative wine brands such as Mud House, Dolly Wines, Jam Shed, J-Harden and Wise Wolf by Banrock Station.

AWL spokesperson Joshua Hartz said: “Both Accolade Wines and Pernod Ricard have a long, proud history as world-class wine producers.

“Combining Accolade Wines with the Pernod Ricard assets will create a more certain and financially sustainable future for the business, allowing us to better serve our customers, in more segments and more geographies. Backed by AWL, the combined business will be better able to adapt to changing consumer tastes and meet the structural challenges facing the global wine industry.”

The transaction is subject to regulatory approvals.

“AWL will work with relevant regulators to progress the combination, and if approved, support management to focus on a smooth future integration of the businesses,” Hartz said.

The transaction price for the Pernod Ricard assets is commercial in confidence.

The merger follows Accolade Wines walking away from negotiations with Australian Vintage earlier this year. Accolade Wines was involved in a dual-track process with both wine companies for many months.

The Australian reported in May that Pernod Ricard had “a suite of Australian assets up for sale through JPMorgan and Morgan Stanley”, while the Australian Financial Review said Pernod Ricard’s Australian assets “could fetch a price tag of about $500 million”.

Pernod Ricard releases statement

Pernod Ricard released a statement saying it was “very pleased to announce the signing of an agreement to sell its international strategic wine brands to AWL”.

“This disposal will allow Pernod Ricard to further strengthen its premiumisation strategy and to direct its resources to its portfolio of premium international spirits and champagne brands that drive the growth of its business,” the company said.

“With this transaction, Pernod Ricard will sell its wine division to a player of global scale, with a route to market solely dedicated to the wine industry. Its wine brands will benefit from the focus required to achieve their potential, reinforce their position, and seize new opportunities around the world.”

The deal reflects a “de-cluttering” taking place across the spirits sector, Jefferies analyst Edward Mundy said in a note.

Diageo recently sold its African beer assets, while Suntory Global Spirits sold cognac brand Courvoisier to focus on core brands such as Jim Beam whiskey.

In its latest quarterly figures, Pernod Ricard reported wine sales falling by between 9% and 10% compared with last year, mainly driven by declines in United States and United Kingdom. The company’s wine sales comprise just 4% of its turnover.

The sale of its wine brands follows the drinks company announcing last week that it was upping its focus on American whiskey.

Pernod Ricard has established a new global brand company in the United States – North American Distillers (NADL).

The new company will be responsible for global marketing strategy and production of its premium American whiskey brands, leveraging the company’s global network to stimulate growth. NADL’s priorities will also include overseeing the highly anticipated Jefferson’s distillery, currently under construction in Kentucky. 

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