Accolade ‘merger’ with Pernod Ricard wine business approved

The Australian competition authority has approved the acquisition of Pernod Ricard’s wine business by Australian Wine Holdco Limited (AWL), the new owner of Accolade Wines, paving the way for the combined global business. 

Today it welcomed the decision by the Australian Competition and Consumer Commission (ACCC) to grant “merger clearance” for Accolade Wines, Australia’s second largest wine producer, with Pernod Ricard’s Australian, New Zealand and Spanish wine businesses, AWL said in a statement.

AWL, a London-based consortium of international institutional investors led by the Bain group, rescued Accolade Wines in February this year from “a mountain of debt”, after the company was badly hit by China’s punitive wine tariffs, a situation compounded by consumers continuing to trade up, leaving commodity wines producers with oversupply and stretched finances.

A spokesman for AWL, Joshua Hartz said AWL had worked closely with all stakeholders to progress the move, and welcomed the agreement as “a milestone [that] takes us a step closer”, and that the company’s management team remain focused on preparations ” for a smooth integration of the businesses once the deal completes.”

The move is intended to provide “a more efficient global wine business with a diversified portfolio of highly complementary old and new world wine labels”, AWL said, which will be “in a better position to meet the challenges facing the wine industry” and provide “a more certain and financially sustainable future for the business”.

“Both Accolade Wines and Pernod Ricard have a long, proud history as world-class wine producers,” he said. “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 sale is expected to be completed by the spring, after clearing a few more regulatory hurdles.

The sale was announced in July, and will includes wine Pernod’s wine brands Jacob’s Creek, Orlando, St Hugo, Stoneleigh, Brancott Estate, Church Road, Campo Viejo, Ysios, Tarsus and Azpilicueta, along with seven wineries.

Accolade already owns leading brands Hardys and Petaluma.

According to Pernod Ricard,  the deal would allow it to focus on premiumisation and direct resources to its premium international spirit portfolio and Champagne brands, which drive the most growth. Wine sales in sales last year accounted for. As db reported in July, its quarterly figures saw wine sales fall by between 9% and 10% compared to the previous year, mainly driven by declines in USA and UK. As noted, the UK businesses had become increasingly driven by its spirits portfolio in recent years and it was widely speculated that the French business would dispose of its lower return wine business. Although the wine business accounted for around half of the French group’s sales in Britain twenty years ago, this has gradually fallen to around 20% of PRUK’s turnover.