Australian wine giant spies Americas opportunity | Australian Markets

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Vinarchy, the newly shaped Australian wine giant, expects to benefit from trade tensions between the US and its neighbours as demand for manufacturers equivalent to Jacob’s Creek in Canada and Campo Viejo in Latin America replaces gross sales of American wine.

Australia’s Accolade Wines merged with Pernod Ricard’s wine operations to create the second-largest specialist wine producer within the world, in a deal and title change finalised final month.

The Adelaide-based company has annual revenues of $1.5bn and employs 1,600 people, with 11 wineries in Australia, New Zealand, South Africa and Spain.

“[The merger] puts us in pole position to deal with the challenges we as an industry face,” govt chair Ben Clarke informed the Financial Times, referring to weak demand and geopolitical tensions which have included China slapping punitive tariffs on Australian wine in 2020.

A Bain-led consortium took control of Accolade final yr after the winemaker, which Carlyle purchased for A$1bn (US$640mn) in 2018, defaulted on a loan because the industry struggled. It then acquired Pernod Ricard’s Australian and New Zealand operations for an undisclosed quantity.

Clarke pointed to Canada, the place US alcohol is out of favour in response to Donald Trump’s tariffs. “There’s not many bottles of US wines on the shelves in Canada at the moment, so we can take advantage of that,” he stated.

Jacob’s Creek, one of Vinarchy’s three most important manufacturers alongside Hardys and Campo Viejo, is already a robust vendor in Canada, the place Australian wine accounts for 16 per cent of volumes — much like the US and South Africa — in accordance with the Wine Australia trade physique.

Clarke stated its Spanish wine manufacturers would additionally appeal to Latin American clients. 

The chair was phlegmatic in regards to the imposition of a 10 per cent tariff on Australian items by the Trump administration, calling it “awkward but manageable”.

The US levies come as wine gross sales to China have begun to growth after Beijing lifted the 2020 tariffs final yr. Wine Australia reported final week that the worth of exports had risen 41 per cent to A$2.6bn within the yr to March, pushed by the resumption of trade with China.

More than A$1bn of wine was shipped to China during the yr, albeit at decrease volumes than earlier than the tariffs have been launched, in accordance with the trade physique.

Clarke stated there was a growth opportunity in China, however demand from international locations equivalent to Japan, South Korea and Thailand remained robust. Australian producers expanded into these markets after Chinese demand stalled.

The Vinarchy chair stated the new winemaker would give attention to integrating the merged corporations, shedding dozens of smaller and unprofitable manufacturers within the course of, however it could additionally look to develop by means of acquisitions.

“We see real opportunities in global wine,” he stated.