Accolade Wines plans to get rid of a number of wine brands following the creation of a new wine company this week called Vinarchy.
The Australian wine business intends to cut brands which make up around 4% of total revenues, Just Drinks understands.
Vinarchy launched after Accolade’s owner, Australian Wine Holdco, completed the purchase of a clutch of wine assets from Pernod Ricard on Wednesday (30 April).
The new company combines Accolade’s assets with the Australian, New Zealand and Spanish wine operations formerly owned by Pernod, which were acquired by Accolade owner Australian Wine Holdco Limited earlier in April after a deal announced last year.
While it is unclear how many brands are expected to be axed under Vinarchy, local reports from the Australian Financial Review this week, have indicated up to 50 brands could be shed.
Executive chairman of Vinarchy Ben Clarke was quoted by the publication as having said that the business plans to bring its total 150 brands down to 100.
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By GlobalData“We can see a few waves getting it to about 100. Obviously, it’s a global business, and we will do it by geography and by brand,” he said.
The brands being reviewed are expected to sit within the new company’s global markets, Just Drinks understands, but are small brands and SKUs that haven’t been successful for the group.
Vinarchy is still working through the process, which will take around 12-18 months to complete.
Money received from offloading the brands will be used to invest in brands which the business believes has greater growth potential.
According to Australian Financial Review Clarke said the sum would go towards well-known brands in Vinarchy’s portfolio, like Campo Viejo, Jacob’s Creek and Hardys.
The publication also suggested domestic brands like Beaumont, &Then and Brooke James are affected, as well as Trackers Crossing in the US. A group of private label brands which are produced for retailers and supermarkets are also expected to go.
Australian Wine Holdco, which describes itself as “a consortium of international institutional investors”, is made up of funds from private-equity firms Bain Capital, Sona Asset Management, Samuel Terry Asset Management, Intermediate Capital Group and Capital Four.
The consortium took equity ownership of Accolade from existing shareholders early last year.
