Accolade and Pernod Ricard wine merger given green light by ACCC

This morning, the Australian Competition & Consumer Commission has confirmed it will not oppose the acquisition of Pernod Ricard Winemakers by Australian Wine HoldCo Limited, Accolade’s equity owner. The deal, which was signed in Paris in July, will see Australia’s second largest wine producer take over the Australian, New Zealand, and Spanish wine brand portfolios of Pernod Ricard.

“Based on our investigation, we consider the proposed acquisition is unlikely to substantially lessen competition in wine processing and packaging services, and similarly is unlikely to substantially impact competition in the wholesale supply of wine,” said ACCC Commissioner Philip Williams.

“We considered that if the acquisition went ahead, a number of other businesses will continue to offer competing processing services and also wine.”

The ACCC initially launched its investigation into the merger due to concerns that it might disadvantage rival winemakers’ access to processing or packaging services. However, it concluded that Accolade is unlikely to have the incentive or ability to engage in this conduct.

“We found that the acquisition would not materially alter competition in grape acquisition markets where Accolade and Pernod Ricard currently overlap,” said Williams.

Joshua Hartz, a spokesperson for Australian Wine HoldCo Limited and Partner of its primary investor Bain Capital, said “we welcome the ACCC’s decision. We have worked closely with all stakeholders to progress this combination and today’s milestone takes us a step closer. Importantly, management are focused on preparations for a smooth integration of the businesses once the deal completes.”

Australian Wine HoldCo - a consortium of international institutional investors including Bain Capital Special Situations, ICG, Capital Four, Sona Asset Management and Samuel Terry Asset Management Limited - first became equity owners of Accolade in February this year after economic pressures forced the wine producer to enter into a recapitalisation plan. When reports of a potential Accolade and Pernod Ricard deal first emerged in early May, Accolade was still in discussions with Australian Vintage over an alternate merger, which eventually hit a dead end on 22 May.

AWL’s acquisition of Pernod Ricard Winemakers will apply to all assets associated with Australian brands Jacob’s Creek, Orlando, and St Hugo, New Zealand brands Stoneleigh, Brancott Estate and Church Road, and Spanish brands Campo Viejo, Ysios, Tarsus and Azpilicueta. This includes an integrated platform from vineyard to bottle along with seven wineries.

“Both Accolade Wines and Pernod Ricard have a long, proud history as world-class wine producers,” said Hartz.

“Combining Accolade Wines with the Pernod Ricard assets will create a more certain and financially sustainable future for the business, allowing us to better serve our customers, in more segments and more geographies. Backed by AWL, the combined business will be better able to adapt to changing consumer tastes and meet the structural challenges facing the global wine industry,” said Hartz.

Over the past few months, both Pernod Ricard and Accolade Wines have encountered periods of turbulence and internal movement. This includes staff of Pernod Ricard’s Rowland Flat winery conducting a strike action over June and July to discuss the future of their jobs, along with the resignation of Accolade’s CEO Robert Foye.

Drinks Trade recently caught up with Pernod Ricard’s Marketing Director Kristy Rutherford to discuss the group’s shift away from wine.

“Our business and all the teams involved will be working with retailers and our partners to ensure a seamless transition,” she said.

“I think as far as retailers and consumers are concerned, the aim is that they can still access the great wines of quality that we currently have into the future.”

Earlier this year, one of the brands involved in the merger with Accolade, Jacob’s Creek, won three out of the available six Fan Favourite Brand Awards at the Australian Drinks Awards 2024.

Rutherford said, “regardless of who owns it in the future, it's still a very special brand with great heritage that I think a lot of people within the Pernod Ricard business will think fondly of. It's always going to be a great legacy brand for us.”

The Accolade and Pernod Ricard merger does not apply to Pernod Ricard’s Champagne brands G.H. Mumm and Perrier-Jouët. Since the announcement of the move away from wine, Pernod Ricard announced the first ever Mumm still wine: Mumm Central Otago Pinot Noir.

“We saw a real strength in keeping the G.H .Mumm Masterbrand together, in order to grow and realise synergies across the brand portfolio,” Rutherford told Drinks Trade.

“The recent announcement of the agreement to sell the international strategic wine brands will allow 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.”

Moving forwards, Pernod Ricard plans to double down on its spirits and Champagne portfolios. This includes a stronger focus on American spirits, which will be achieved via its North American Distillers global brand company.

Pernod Ricard has previously indicated that the sale of its wine brands will be finalised during H2 2025.