Accolade Wines merges with Jacob’s Creek to form new wine giant

By Peter Roberts

Pernod Ricard has sold its hugely successful Jacob’s Creek wine brand in a deal with Accolade Wines that will create a new Australian wine giant.

Pernod Ricard announced it would merge the Jacob’s Creek business with Australian Wine Holdco Limited which purchased Accolade earlier this year.

Australian Wine Holdco Limited is a consortium of international institutional investors including by Bain Capital, Intermediate Capital Group, Capital Four, Sona Asset Management, and Samuel Terry Asset Management.

Accolade is built around the Hardys brand and includes Grant Burge, Banrock Station, St Hallett and Petaluma.

In the past Treasury Wine Estates, Jacob’s Creek and Accolade were the three largest Australian and global wine brands – with the merger bringing two of them together into a giant wine group.

Jacob’s Creek, which also includes the Orlando and St Hugo Australian brands, and New Zealand brands Stoneleigh, Brancott Estate and Church Road is one of the world’s most successful wine brands.

Its eponymous brand can be found around the world and was the world’s most traded single wine brand – overall Pernod Rickard sold more than 10 million 9Lcs cases annually.

However it was Pernod Rickard’s only wine asset, and the company has been attempting to sell the business for some time.

The merged wine business will have to battle the big trend in the wine business of premiumisation which has seen margins fall on lower value wines.

One of Accolade’s biggest assets – Berri Estates – is a giant at the lower end of the scale.

Berri Estate winery is the largest grape processor in the Southern Hemisphere, and the largest cask manufacturing facility in Australia.

Berri crushes around 220,000 tonnes of grapes annually;, around a third of South Australia’s entire crush, and exports over 100 million litres of wine around the world annually.

The Berri winery has seen major investment in recent years, including in new bottling facilities, aiming to increase its exports of bottled rather than bulk wine.

As well as wineries in Australia and New Zealand the new group will own wineries in Spain,

Pernod Ricard said the disposal will allow the company to further strengthen its premiumisation strategy and to direct its resources to its portfolio of premium international spirits and champagne brands that drive the growth of its business.

Pernod Rickard said: “With this transaction, Pernod Ricard will sell its wine division to a player of global scale, with a route to market solely dedicated to the wine industry.

“Its wine brands will benefit from the focus required to achieve their potential, reinforce their position, and seize new opportunities around the world.”

Picture: Berri Estates