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Chapel Down quits beer and cider business
English wine and spirits producer Chapel Down has decided to dispose of its beer and cider arm Curious Drinks in a pre-pack sale to private equity firm Risk Capital Partners.
The disposal will involve Chapel Down putting Curious Drinks into administration, after which it will be acquired by RCP, who will establish a new company to run the business.
According to a statement, there will be no job losses as a result of the deal. Chapel Down will receive no payment for the business, but will be cleared of its net debt in Curious Drinks.
Frazer Thompson, CEO of Chapel Down Group, described the move as a “difficult decision”.
The Chapel Down board made the decision after a strategic review of the business and the effects of Covid-19. It found that while its wine and spirits business had performed well, its Curious Drinks division, which sells 90% of its stock to the on-trade, had suffered.
Chapel Down will now focus on building its wine and spirits division, which achieved 38% volume growth last year despite the hospitality sector shutdowns.
RCP will take on the Curious Drinks business and assets, which include the Curious Beer and Cider brands, the new 2,900hl brewery in Ashford and its on-site restaurant.
Thompson added: “The Covid-19 pandemic has upturned the best laid plans of businesses all over the world and has required companies to respond to the crisis with flexibility and agility. In our case that involved pivoting our multichannel strategy to have a stronger focus on supermarkets and e-commerce direct sales to consumers for our wines which resulted in volume sales growth of 38% in 2020. Demand and respect for English wines and Chapel Down in particular, is growing all the time, and as the leading brand and business we see a significant opportunity and a very bright future for Chapel Down. We certainly won’t be abandoning the hospitality business – we love it – and will support its return vigorously with our wines and spirits.
“It has, however, been a very difficult year for the Curious Drinks business which…has been severely impacted by the uncertainty and frequent shuttering of that industry.
“Following a strategic review, the board has taken the decision to focus our energy and resources on building the Chapel Down brand and business to ensure that we continue to flourish. While this has been a difficult decision, we are very pleased to have found in Risk Capital Partners an excellent home for Curious Drinks – and the Curious team – where the business will be able to fulfil its exciting growth potential.”
The deal is dependent on Chapel Down receiving permission by HMRC and other relevant licences. If approved, investors in Curious Drinks will be given the opportunity to convert their Curious shares into shares in Chapel Down.
Luke Johnson, founder of RCP, which has previously backed Laine’s Pub Co and Draft House pubs, said he saw “terrific potential” in Curious Drinks.
“We’re very excited about its future, despite the challenges of the past year,” he said. “Brewing will always be a cornerstone of British culture, and the craft beer revolution has only strengthened that. Curious is a great brand made in a fabulous facility, and with our support we believe the business can be developed further. We are particularly pleased to be taking on all Curious employees, who bring with them a wealth of insight and knowledge.”
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