Penfolds owner Treasury Wine Estates to sell off Bordertown, Langhorne Creek vineyards

Penfolds owner Treasury Wine Estates is looking to offload more than 1000ha of vineyard properties across SA amid a wider cost-cutting and restructuring push.

The Bordertown vineyard being sold by Treasury Wine Estates. Picture: Supplied by Colliers

Treasury Wine Estates is looking to offload more than 1000ha of vineyard properties across South Australia amid a wider cost-cutting and restructuring push.

The sell-off includes a 488ha property near Bordertown, comprising more than 374ha of vineyard area, making it one of the largest in the region.

It is expected to attract offers of around $25,000 per planted hectare, or more than $9m.

An additional four sites in Langhorne Creek are also being readied for sale, offering about 400ha of planted vines across 520ha of total land area.

The sell-off comes after Treasury last month warned a downturn in consumption of its portfolio of cheaper and commercial wines, most notably in Australia and Britain, was expected to continue for the foreseeable future, forcing it to cut costs, consider new supply arrangements and divest some of its wine assets.

The maker of Penfolds, Wolf Blass and Wynns revealed that its sales for 2023 would fall as much as 3 per cent.

The Bordertown vineyard. Picture: Supplied by Colliers

However despite softer trading conditions for lower-priced wines, the demand for its premium and luxury portfolio, led by its powerhouse brand Penfolds, remains strong, the company said in an update on its restructure last month.

Treasury chief supply officer Kerrin Petty said the sale of the Bordertown portfolio reflected a “right-sizing” of the company’s vineyard portfolio.

“We continually review our global vineyard assets to make sure they’re set up to deliver on our strategy to grow our premium and luxury portfolio,” he said.

“Last year we acquired Beenak Vineyard in Victoria’s Yarra Valley, as well as Château Lanessan in Bordeaux.

“Right-sizing our sourcing footprint has also meant divesting some assets, including our vineyards in Bordertown and Langhorne Creek, South Australia.”

Colliers Agribusiness’s Tim Altschwager, who’s managing the sale of the Bordertown vineyard alongside colleague Nick Dean, said the offering would generate interest from investors and existing vignerons seeking a commercial vineyard with a “prime location and impressive features”.

“This is an exceptional chance to acquire a large-scale, commercial vineyard in the Bordertown wine region, a highly regarded viticultural area in South Australia,” he said.

“It is a significant vineyard by any measure. Imagine, should the Chinese market reopen, then large-scale commercial vineyards, such as Bordertown Vineyards, assume even greater importance.”

The vineyard, just west of the town centre, was established by Penfolds in 1989, making it one of the first to be established in the area.

Varieties grown include cabernet sauvignon, chardonnay, merlot, shiraz, and tempranillo, which together deliver average production of about 3600 tonnes.

Other on-site assets include three residences, an administration centre, shedding and workshop facilities, and water entitlements of up to 1086.7ML.

Expressions of interest close on July 13.

Mr Dean said that while the property had been established as a successful grape-growing operation, it was also suitable for “potential redevelopment into alternative horticultural or agricultural pursuits”.

“The property’s prime location, extensive infrastructure, and ample land area make it an enticing prospect for investors with diverse agricultural interests.”

Originally published as Penfolds owner Treasury Wine Estates to sell off Bordertown, Langhorne Creek vineyards