McWilliams lures expressions of interest from potential buyers

McWilliams Wine Group has already received expressions of interest in acquiring the 141-year-old company.

McWilliams is Australia’s sixth-biggest wine group.

McWilliams Wine Group has already received expressions of interest in acquiring the 141-year-old company, less than 24 hours after the group entered voluntary administration.

The company, now in its sixth generation of family ownership, called in KPMG as administrators on Wednesday in an attempt to recapitalise or sell the company.

KPMG restructuring services partner Gayle Dickerson told The Australian on Thursday several parties had expressed interest in acquiring the heritage company, known for its affordable range of fortified wines and extensive ­product range marketed under a portfolio of brands, including McWilliams and Mount Pleasant.

“We have received significant inquiry and interest in the short time since our appointment,” Ms Dickerson said.

The administrators are hopeful of saving McWilliams, Australia’s sixth-biggest wine company, and have started an assessment of the business and operations.

“We are seeking expressions of interest to recapitalise or acquire the group to take this heritage brand forward both locally and globally,” Ms Dickerson said.

In January last year, McWilliams — which is also the sole Australian distributor for prominent global brands including Champagne Taittinger, Mateus, Henkell and Mionetto — was forced to seek a capital injection of $6.2m as well as sell assets after it breached some of its lending covenants.

The company is familiar with bailouts. In 2007, McWilliams came to the rescue of Margaret River wine producer Evans & Tate when it took out a 25 per cent stake in the company.

McWilliams produces flagons of fortified wine priced as low as $11. It is this bottom end of the wine market that has been challenged in recent years.

According to one wine marketer, when it comes to producing cheap flagons, scale is everything, and it appears McWilliams reached the tipping point where it was no longer viable.

“A lot of family-owned wine companies are looking to get out of the $12-a-flagon wine market. But it’s still a significant market … and there is demand from big box retailers,” the marketer said.

McWilliams chairman Jim Brayne said: “A number of factors have contributed to a decline in business performance, including evolving structural market dynamics and capital constraints.

“We will work closely with the administrator during the process in order to strengthen the prospects of a positive outcome.”