Treasury ends UK bottling deal with Accolade

Australian wine giant Treasury Wine has confirmed it is ending its bottling agreement with Accolade Wines in the UK.

The news comes two months after Accolade announced plans for its own bottling plant in Australia which ended an arrangement between the two companies which had seen Accolade share the Treasury Wolf Blass facility in Barossa Valley.

It had been understood at the time that the reciprocal arrangement whereby Treasury bottled its wines at Accolade Park in the UK was not affected, but following a recent report in the Australian Financial Review, a Treasury spokesman confirmed to db that this agreement had also ended.

He said: “We had already given notice to exit the agreement with Accolade earlier this year as we consider options for our long-term bottling and packaging requirements. However the changes do not come into affect until 2019, so until then it is business as usual.”

The bottling deal between the two Australian wine giants was struck in 2012 to help the two companies streamline costs and boost efficiency by utilising “the best and most efficient assets of both companies”, it had said at the time. The move consolidated Treasury’s UK packaging into one site, having previously used several providers, including Quinn Glass (now Encirc).

However Treasury refused to be drawn on where its bottling for the UK market will be done in future, or whether it would quit the site earlier if a new agreement was put in place.

db understands that around half of the wines shipped to the UK are shipped in bulk for bottling in the UK.

Volume figures from Treasury’s 2016 annual report put its overall volume as 33.6 million 9L cases, with European base business volumes (excluding its 2016 acquisition of Diageo’s wine brands) at 6,379k 9L cases.

In October 2015, Treasury announced it was investing around AUS$25 million extending the Wolf Blass winery and packaging centre, which was due to be fully operational this year.

Meanwhile Accolade is investing AU$40 million in the new bottling plant and warehouse at Berri in the Riverland region of South Australia, which is expected to take 18 months to complete. However bottling is unlikely to move from the TWE plant for three years, Accolade said in October.

In March, Accolade Park opened a new £8.5 million bottling line at the Avonmouth facility, bringing the number of bottling lines to six. According to the company, the facility produces around 600m bottles a year, amounting to nearly one third of all wine consumed in Britain each year, and has the largest wine warehouse and distribution centre in Europe (80,000m2).