Big commercial wine brands are facing a much tougher time as margins come under pressure amid a trend of people drinking less, but trading up to higher-quality drops.
The Casella Family, No.55 on the AFR Rich List, is using investment bank UBS as an adviser, after fielding offers from outside parties including private equity groups.
French drinks giant Pernod Ricard is shifting away from wine to focus more on spirits and its wine division which includes Jacob's Creek, made at Rowland Flat in SA's Barossa Valley, is up for sale.
Shrinking profit margins, higher costs of production and a shift by consumers up the value chain to higher-quality wines is prompting a string of corporate deal-making in Australia's lower-end commercial wine sector.
The big-selling Jacob's Creek brand produced in South Australia is already up for sale as part of a proposed global reshaping by French drinks giant Pernod Ricard as it shifts away from wine to concentrate on spirits, while the Yellow Tail brand owned by the Rich Lister Casella Family in NSW is now in the spotlight too.
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Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com
