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Riverland growers rebuff Accolade offer
The new private capital owners of Accolade, Australia’s second largest wine producer, have been rebuffed by the 530 members of the CCW cooperative in the Riverland area of South Australia.
They have overwhelmingly rejected a proposal from Accolade to buy out red wine contracts from the members of one its biggest supply groups.
By 314 votes to 17 they have declined the plan to pay AU$4,000 per hectare for those growers willing to cease production. In return Accolade would have had to take only 80% of the current volumes, or around 150,000 tonnes annually.
Accolade made the proposal following a meeting with the growers earlier this year, where it told them it was required to purchase only grapes that met “reasonable commercial requirements as to quantity, variety and quality” under its current contract.
Not sustainable
In addition, it also told growers in February that it “does not accept” it must pay the same rate for those grapes above Accolade’s reasonable commercial requirement to quantity and would offer “materially different (nominal) prices”.
Accolade’s chief executive Robert Foye said there was a mismatch between supply and demand, stating it “simply isn’t sustainable” to continue without responding to the current crisis.
The oversupply meant that South Australia grape growers were being offered rates as low as AU$120 a tonne (£62) despite the costs of production being more than double that.
Lack of judgement
Meanwhile, Accolade remains in talks with Australian Vintage about a possible merger as part of their efforts to reduce Australia’s wine glut.
AV has told its shareholders that the discussions are at an early stage and may or may not lead to a deal. It has also stressed that did not need a merger and that its prospects were improving following a review of its operations and the implementation of cost cutting measures.
Separately earlier this month AV fired its chief executive Craig Garvin for what it termed a “serious lack of judgement”.
New owners
Accolade was bought from Carlyle Group earlier this year by a consortium of investment houses led by Bain group.
The new owners are thought to be in discussions with Pernod Ricard about buying the French group’s Australian wine interests, including the Jacob’s Creek brand.
Both sides have declined to comment.
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