Australian Vintage rehires sacked CEO Craig Garvin

The embattled winemaker has rehired the CEO it sacked only five months ago, with Craig Garvin declaring he will put growth back on the agenda.

Australian Vintage, the maker of McGuigan and Tempus Two wines, has reappointed its sacked CEO Craig Garvin after dumping him in May.

Australian Vintage has reappointed Craig Gavin as its chief executive after sacking him in May, with the reinstated boss pleading to put sustainable growth back on the agenda for the maker of McGuigan and Tempus Two wines.

The return of Mr Garvin to the CEO’s desk was helped by a clean sweep of the board after Mr Garvin’s initial departure five months ago and the appointment of funds manager James Williamson as chairman whose boutique fund Wentworth Williamson controls 5 per cent of the winemaker and backed Mr Garvin’s reappointment.

Mr Garvin was sacked in May by the former board of directors for inappropriate workplace behaviour that was never fully explained to investors, with an ASX statement at the time simply saying the former CEO’s behaviour “displayed a lack of judgment”.

At the time, Mr Garvin threatened to sue Australian Vintage for defamation, but later the collapse of a deal to merge Australian Vintage with private equity owned Accolade Wines, worsening losses and a heavily dilutive capital raising saw most of the board responsible for his departure themselves exit the company.

On Thursday the saga came full circle as Australian Vintage announced the reappointment of Mr Garvin who will officially return as CEO next week.

“There was fresh eyes relating to Craig and I must tell you there was an assessment done by Lander & Rogers, the employment law firm, and there was never any recommendation that Craig should be dismissed (in May) … there has been no stone unturned, and I can tell you Craig’s reputation both here with the staff and all our stakeholders is fantastic,” Mr Williamson told The Australian.

“This business stagnated for a time and to see relief and excitement to have him back, and there is work to be done. And we have good assets and a fantastic team.”

Mr Garvin’s dismissal in May came at a sensitive time for the winemaker, as it was in deep negotiations with the nation’s second-largest winemaker, the debt-laden Accolade Wines, to execute a merger of the two businesses, of which Mr Garvin was expected to lead. Accolade’s large portfolio of wines includes blockbuster labels such as Hardys, St Hallett, Grant Burge and Petaluma, and by combining the two businesses would have given it extra presence, synergies and efficiencies to better compete in what is an increasingly tough wine market. But in the turmoil at Australian Vintage, Accolade broke off those merger talks and later merged with Jacob’s Creek to form a new wine giant.

On Thursday, Mr Garvin told The Australian he was “pleased to be back” and eager to work with the new board.

“The strategic intent (of the Accolade merger) was right, what we execute and how we do it is the variable. So strategically, the Australian industry needs consolidation, you see that, and we’re very interested in going on that journey, but we have some basics to get right in parallel.

“That includes making sure that we reduce debt, get our cash flow right, get our margins right, all the things you would expect.

“We’ve got to deliver on the basics. Margin, cash flow and creating value for shareholders is really what it’s about. And if that happens to include consolidation or upscaling our industry and our business, so if it delivers value for shareholders – let’s get on with it and try to fix that up. That’s my priority.”

Mr Garvin said Australian Vintage could survive and thrive without a larger merger partner, with new growth opportunities in select overseas markets.