This digressing will allow the French giant Pernod Ricard to further strengthen its premiumisation strategy and to direct its resources to its portfolio of premium international spirits and champagne brands that drive the growth of its business, claims the company.

The transaction is the result of Pernod Ricard’s continuous assessment of its strategic opportunities, in line with its longstanding policy to deliver sustainable value for its shareholders, employees, customers and partners, according to the Press Announcement of yesterday.

The transaction includes the sale of a wide portfolio of strongly established international wine brands owned and produced by Pernod Ricard Winemakers, with over 10 million 9 Liter cases annually from three origins including Jacob’s Creek, Orlando and St Hugo from Australia, Stoneleigh, Brancott Estate and Church Road from New Zealand and Campo Viejo, Ysios, Tarsus and Azpilicueta from Spain. The business is an integrated platform from vineyard to bottle and includes seven wineries.

Jacob’s Creek has been the biggest single foreign wine label that has been ruling the Indian imported wine industry for years in volume, crossing the sale of 100,000 cases annually. The company had been accused by competitors of using its own source of origin in Australia to export at throw away prices, resulting in lower import duties and consequently selling at the most affordable prices in the market and leading as the Top Importer.

It had also started importing the NZ Brancott Estate wines (earlier Montana Estate) and also the affordable Campo Viejo reds from Rioja. The competitors have often complained about the company bundling the wine with their ever-popular Chivas Regal Scotch whisky and even sponsoring the wine at multiple events, free of cost.

With this transaction, Pernod Ricard will sell its wine division to a player of global scale, with a route to market solely dedicated to the wine industry. Its wine brands will benefit from the focus required to achieve their potential, reinforce their position, and seize new opportunities around the world.

Closing of the transaction is subject to fulfilment of customary conditions, including regulatory clearances, and is expected to occur in early 2025.

The business move does not mean India will stop importing the ubiquitous label but the new company AWL will surely cash in on the popularity of the label at the low end of imported wines. Australian Wine Holdco Limited (“AWL”) is a consortium of international institutional investors which comprises funds backed by Bain Capital, Intermediate Capital Group, Capital Four, Sona Asset Management, and Samuel Terry Asset Management.

Subhash Arora