Cranswick Premium Wines Limited today announced that it is to sell its subsidiary, Haselgrove Premium Wines, to the Barrington Wine Company Limited for A$3.5m.

The sale, which is expeted to be completed by the end of June, includes the company's winery and 30 acre vineyard in South Australia's McLaren Vale, the Haselgrove brand and contracts for grape supply from a number of premium South Australian regions.

Cranswick will retain its 100 acre premium Wrattonbully vineyard and 450 acre Loxton vineyard in South Australia, other grape supply contracts from Wrattonbully and Langhorne Creek and the "Lost Sheep" brand name.

Commenting on the proposed sale, Cranswick's CEO, Graham Cranswick-Smith, said: "Haselgrove is a first class winery with a capacity of 3,000 tonnes, however it does not fit with our strategy of producing high volume wines for export and domestic markets. Its sale will substantially eliminate Cranswick's debt, apart from the A$20 million in convertible unsecured notes, positioning us to capitalise further on opportunities in the market segments where we already have a strong presence.

"We will continue to source and market wines from three states and will harvest approximately 1,500 tonnes of premium South Australian grapes which will be vintaged at our modern, highly efficient Milburn Park winery in Victoria. This and our Griffith, New South Wales winery have a combined crushing capacity of approximately 40,000 tonnes which is adequate for our current needs.

"We are retaining the Wrattonbully vineyard as we have great confidence in the potential of this emerging region, which is adjacent to Coonawarra. Our premium wines from Wrattonbully will be marketed under the 'Lost Sheep' brand."