June 02: Australia’s largest wine company Accolade Wines which owns Hardys, the number two selling imported brand in India through Sula Selections, has been bought over by the US private equity firm The Carlyle Group which hopes to drive the company through higher sales in Asia with the implicit possibility of aggressive marketing in India against the rival Jacobs Creek, the biggest selling single imported brand, opines Subhash Arora
According to a Press Release yesterday, global alternative asset manager The Carlyle Group (NASDAQ: CG) announced that it had completed its acquisition of 100% of Accolade Wines, 5th largest wine producer in the world and Australia’s largest wine companies with sale of 35 million cases in more than 110 countries including India, more than 10 times that of the overall Indian market, including both domestic and imported wines.
Ari Mervis, former Regional Managing Director for Asia Pacific of SABMiller, has been appointed Executive Chairman from August 2018. Equity for the transaction came from Carlyle Asia Partners IV, L.P.
Headquartered in Australia, Accolade Wines owns a portfolio of more than 50 brands including the second highest selling brand Hardys through Sula Selections being imported for over 15 years, since 2002. It exports over 20,000 cases to India. It has presence in 20 of Australia’s premium wine regions. Hardys is also UK’s number one Australian brand.
The Press Release quotes David Bluff, Managing Director of The Carlyle Group, saying, “We see significant growth potential for Accolade Wines in major wine markets, supported by a portfolio of prominent brands. With our expertise in the consumer sector and access to a global network, we look forward to working with the management team to support the company’s Asia growth strategy and the continued development of its business.”
‘The company is looking to Asian markets after buying out the major Australian wine company, Accolade Wines’. Bluff says there is significant growth potential for Accolade in major wine markets in the Asian region. Its portfolio includes prominent brands like St Hallett, Petaluma, and Banrock Station and is a major producer of cask wines. Carlyle is one of the most active international private equity investors in Australia. As of March 31, 2018, it had invested more than US$2 billion of equity ($A2.6 billion) in Australia.
It is a global alternative asset manager with $201 billion of assets under management across 324 investment vehicles as of March 31, 2018. Carlyle’s objective is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Credit and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. It has expertise in various industries.
Hardys has been present in the Indian market for over a decade. A few years ago when the beer arm was spun off, the group had been supporting Indian market in general and Sula in particular implicitly with aggressive pricing to take Jacobs Creek by the horns, thus reducing MRP to sub Rs. 1000 levels for most of their basic labels. However prices did firm up about 10% last year, making it less attractive as compared to Jacobs Creek.
It will be curious to see what strategy it adopts in India where they are selling about 20,000 cases of Hardys, which may be small compared to the 70-80,000 cases of Jacobs Creek sold but with aggressive marketing they can give JC run for the money. If they choose to compete aggressively, it would be a great competitive ground. In any case, it ought to be good for the imported wines segment in India. Incidentally, Nick Pringle, COO of Sula group has been working with Accolade for several years and was its head honcho for China during his last assignment before joining Sula.
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