August 1, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Melbourne-based wine giant Treasury Wine Estates (TWE) has expanded its portfolio of assets through the acquisition of the 55-hectare Beemak Vineyard located in the Yarra Valley, from Accolade Wines in a deal valued at just over AUD$7 million (US$4.88 million). 

Located in the Upper Yarra Valley near TWE’s Hubert Estate, Beenak was planted in 1988 with 45 hectares of Pinot Noir and Chardonnay grapes for the production of both still and sparkling wines, averaging 364 tons annually. The deal also included water entitlements totaling 71 million liters, and several outbuildings on the property.

The cool climate of the Yarra Valley is well-suited to the production of Pinot Noir, which thrives at higher elevations. With total vineyard planted area of 2,837 hectares (7,010 acres), in 2020/2021 the Valley totaled 11,489 tons of grapes crushed, and of this total, Pinot Noir and Chardonnay accounted for 68 percent, according to Wine Australia. 

As the second largest wine company in Australia, Accolade Wines stated that its decision to divest Beenak is due to an oversupply of grapes from that region of the country.

“We can confirm that we have sold the Beenak vineyard in the Yarra Valley due to an oversupply of grapes from these vineyards within our business,” said a spokesperson for Accolade.

Tim Ford, CEO, Treasury Wine Estates, commented on the deal, which was managed by Stephen Strachan with Langley & Co Advisors, saying, “Vineyards producing Pinot Noir are of particular interest as we respond to the very strong consumer demand for our Coldstream Hills and St Huberts brands.”

Adding, “The opening of our new cellar door at Hubert Estate [in nearby Coldstream] has further enhanced demand for cool climate wines in the portfolio.”

Since first listing on the Australian Securities Exchange in 2011, TWE has grown in value from $2.2 billion to $8.4 billion, as of 2021. Under its global, multi-regional sourcing model TWE controls premium vineyard and production assets in wine-making regions in the Barossa Valley in Australia, Napa Valley in the U.S., Marlborough in New Zealand, Bordeaux in France, and Tuscany in Italy. 

The company’s three standalone brand portfolio divisions – Penfolds, Treasury Premium Brands (TPB), and Treasury Americas (TAM) – and their supporting  Supply, Treasury Business Solutions, and Corporate functions, support a global distribution platform with sales in more than 70 countries.

In 2021, TWE set out a strategic plan to become the “world’s most admired premium wine company” through “bold decision making and innovation”… and growing its business “using a number of distinctive competitive advantages.”

Over the past nine months, the company has put these intentions into action through a number of expansionary moves. In November 2021, TWE acquired Frank Family Vineyards(the third-oldest vineyard in Napa)  including a historic winery, brand, and vineyards, for US$315 million, and three smaller wine estates in Bordeaux – Châteaux Belle-Vue, Gironville, and Bolaire – to complement its already-owned Chateau Cambon la Pelouse, bought in 2019. 

Further, as the company aspires to gain market share in the premium wine space, in March 2021 it also divested four of its lower-end brands to Wine Group for $100 million, giving space for the Frank Family Vineyard to join other luxury brands such as Chateau St. Jean, Beringer, Acacia, Beaulier, Sterling, and Stag’s Leap.

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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