Australia’s Treasury Wine Estates has brushed off a media report it is looking to buy English wine producer Chapel Down.
Last month, Chapel Down said it would consider a sale of the company to find new ways to build long-term growth.
UK newspaper The Sun reported Treasury Wine Estates and Accolade Wines were interested in making moves for Chapel Down.
However, a spokesperson for Treasury Wine Estates told Just Drinks it “is not participating in the sale of Chapel Down wines”.
Accolade had not returned a request for comment at the time of writing.
Last week, the owner of Accolade agreed to buy a clutch of wine assets from Pernod Ricard. The deal will include Pernod Ricard wine brands such as Jacob’s Creek, Brancott Estate and Campo Viejo, as well as seven wineries. The Accolade portfolio includes Hardys, Echo Falls and Jam Shed.
In 2023, Chapel Down booked a 15% rise in net sales to £17.2m ($22.2m).
Operating profits were up 81% to £2.3m, while adjusted EBITDA increased 87% at £5.4m, helped by “profitable trading” and an adjustment to grape prices following a record 2023 harvest. The winemaker said the year had been “profitable at all levels”.
Chapel Down harvested 3,811 tonnes of grapes, its highest amount to date. These made up for around 3.4 million bottles. More than two million of these were to be used in its sparkling wines. This figure was an 86% increase on 2022 (2,050 tonnes) and 75% higher than the company’s 2018 record (2,173 tonnes).
In a statement released 25 June, the group said it would “consider all alternatives” including “a sale of the company” as it conducted “a strategic review of the options” with an aim to boost profits,
Chapel Down also said it intends to examine “investment from existing shareholders, investment from new shareholders… and other relevant transactions”.
The move comes as the group looks to support future investments in new vineyards and a purpose-built winery, due to be completed by the 2026 harvest. It also plans to inject an unknown sum into developing its brand home in Tenterden, Kent.
Treasury Wine Estates rejigged its corporate structure last month, merging a team focused on revenue growth into its premium-brands division. It has been reshaping its portfolio over the last year, as the company puts more emphasis on its “premium” and “luxury” ranges.
In the opening six months of its fiscal 2024, the comoany posted sales of A$1.31bn ($871.2m) compared to A$1.31bn a year ago. Net income was A$166.7m, down 11.4%.
The group’s earnings before interest, tax, SGARA and material items (EBITS) dropped 5.8% to A$289.8m, driven by Treasury Americas and Treasury Premium Brands, which featured a 17.5% and 3.2% decline in EBITS respectively.
