Trade Minister Don Farrell’s visit to China this week to restore trading relations for the wine industry may have come too late for Accolade Wines.
On a continued streak of divesting, US private equity firm Carlyle Group is selling off Accolade Wines’ jewel in the crown, the sparkling wine brand Arras.
Carlyle acquired Accolade in 2018 for $1 billion, but the pandemic, the economic downturn in Europe, and the damaging Chinese tariffs have placed heavy financial strain on the wine business.
Accolade Wines is Australia’s second-largest wine company after Treasury Wines Estate. Yet, over the last twelve months, it has offloaded many Accolade vineyards to cut debt.
Accolade CEO Robert Foye has said these divesting decisions result from a global review of Accolade’s asset base and the best use of capital.
“As part of Accolade’s global growth strategy, the Company constantly reviews its asset mix to ensure its capital is focused on brands and markets with the greatest potential,” said a spokesperson from Accolade Wines.
Late last year, Accolade Wines sold its bottling and packaging plant, The Park in Bristol, the UK, to Encirc for AUD$53 million. At the same time, it offloaded Yarra Valley vineyard Bastard Hill to Giant Steps and the Jackson family and a high-altitude Yarra Valley vineyard Beenak to Treasury Wine Estates.
The Randall Wine Group in South Australia purchased three Accolade McLaren Vale vineyards, while in Western Australia, the Nannup winery sold to the Fogarty Wine Group. More sales in Western Australia included the Houghton Swan Valley property and Brookland Valley Estate vineyard.
Accolade’s prized Stonier brand and vineyards in Mornington Peninsula also went under the hammer. The winning bidder was Circe Wines. The sale included the brand, 25 hectares of premium vineyards, the grower partnerships, and the winery and cellar door in Merricks.
“The strategic divestment of some of assets, particularly vineyards and production facilities either outright or through sale-and-leaseback arrangements, is in line with this capital-light model and allows the Company to redeploy capital to invest in its brands and growing sales,” said Accolade’s spokesperson.
A treasured Australian wine brand, Arras has been lauded the world over for its outstanding Tasmanian sparkling wines, including winning awards such as Decanter’s Top Sparkling Wine of the Year ahead of the competition, including the best wines from Champagne.
Tasmanian sparkling wines are making waves on the international market and Arras continually delivers wines of outstanding merit. The brand is also presided over by legend of Australian sparkling wine production and Australia’s most-awarded sparkling winemaker, Ed Carr.
Potential buyers are circling to acquire this prize sparkling wine asset including the Bay of Fires winery, and vineyards in Tasmania. There is no intention to divest the brands Bay of Fires or the Eddystone Point brands.
“While Accolade Wines is incredibly proud of the international success of the House of Arras brand in recent years, the Company believes it is the right time to consider a divestment of Arras to allow us to focus on other parts of the business with a closer strategic alignment to the rest of our portfolio,” commented Accolade Wines’ spokesperson.
“In Accolade’s two biggest markets – Australia and the UK – the Company continues to gain share across key categories. Accolade has also identified opportunities for growth in markets including the US and Asia. A recent example in the US is the successful launch of our partnership between J-Shed wines and NBA All-Star and cultural icon James Harden,” they continued.
In Australia, Accolade Wines is positively buoyed by its major customers voting the wine business number one alcohol supplier in the market as part of the Advantage Survey last year.
Luxury wine brands remaining in the Accolade portfolio include Hardy’s, St Hallett, Grant Burge and Petaluma.
