What do the famous New Zealand wine labels Brancott Estate, Stoneleigh and Church Road have in common with Jacob’s Creek and Orlando in Australia, and Campo Viejo in Spain? These large-volume brands were all sold recently by the world’s second-largest wine and spirits company, Pernod Ricard, in response to a global drop in wine consumption.
Pernod Ricard plunged into New Zealand wine in 2005, buying the industry giant originally called Montana. In 2008, Pernod Ricard listed its four most profitable wine brands as two champagnes, Mumm and Perrier-Jouet, Jacob’s Creek and Montana. Two years later, in the wake of export marketing problems in the US, the brand Montana was changed to Brancott Estate.
Pernod Ricard says the disposal of its New Zealand wine brands – and numerous others – will allow the monolith to “strengthen its premiumisation strategy and direct its resources to its portfolio of premium international spirits and champagne brands that drive the growth of its business”. Other drinks giants, including UK-based Diageo, have also decided that everyday-drinking, moderately priced wines are no longer part of their core business.
The new owner of the prominent Kiwi brands and assets is Australian Wine Holdco Limited (AWL), a consortium of investors comprising funds backed by Bain Capital and others. In February, Bain Capital, a private equity group, also led a consortium that acquired Australia’s second-largest wine producer, Accolade Wines, whose brands include Hardys, Banrock Station and a South Island-based producer, Mud House.
Treasury Wine Estates, Australia’s largest producer, also revealed last month it was selling its “commercial wines” division, to focus on its premium brands, headed by Penfolds. Treasury’s most familiar brands have included Wolf Blass, Lindeman’s, Squealing Pig and Marlborough-based Matua (originally Matua Valley).
“People are drinking less but buying a better bottle,” reports Lee McLean, chief executive of Australian Grape & Wine. Trevor Stirling, a UK-based analyst at Bernstein Research, argues: “The only bit of the wine industry in the world making money is rosé and upmarket wines.”
Reflecting that, Pernod Ricard kept a large vineyard, Château Sainte Marguerite, because rosé from Provence is an expanding, profitable market. Meininger’s International, a major trade publication, reported in July that the brands retained by Pernod Ricard are “unlike Jacob’s Creek, Brancott Estate and Campo Viejo, none of which has been able to develop a market for ‘aspirational luxury’ wines”.
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Seresin Leah Marlborough Pinot Noir 2023
★★★★½
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