A month after exiting the still wine business, Gruppo Campari has sold J Carolan & Son Ltd - which produces the Irish liqueurs Carolans and Irish Mist - to Heaven Hill Brands for $US165million.

The deal is expected to be finalised by August 1, and while Campari has sold off the trademarks, inventories and brand assets, it has signed a multi-year exclusive distribution agreement with Heaven Hills to continue distributing Carolans and Irish Mist outside the US. 

Campari bought the Irish liqueuer brands in 2010 as part of a €129million ($US150million) deal to acquire Frangelico from William Grant & Sons. While Frangelico was the key acquisition target, Carolans is the second biggest selling Irish whiskey cream liqueur in the world (Bailey's takes out the No.1 spot).

Carolans' ingredients include fresh cream, honey and Irish whiskey. Irish Mist, the first liqueur to be produced in Ireland, is a blend of Irish whiskey, honey and natural aromatic spices.

In 2016, Carolans and Irish Mist achieved total net sales of €34million. Those sales represented approximately 2% of Gruppo Campari net sales in FY2016.

Bloomberg noted in May: "A sale of Irish Mist and Carolans would help the company offset some of the costs of its acquisition of Grand Marnier, the liqueur it bought for €684million ($US765million) last year."

Bob Kunze-Concewitz, CEO at Gruppo Campari, said: “The sale of Carolans and Irish Mist is the largest disposal ever completed by the Group. We are very pleased to sign this transaction with Heaven Hill, a prominent spirits company in the US and a perfect fit for Carolans and Irish Mist.

“With this transaction, we continue to streamline our non-strategic portfolio and further increase our focus on our priority spirit brands, particularly in our largest and core US market. Moreover, thanks to this disposal, we can further accelerate in the reduction of our financial indebtedness. Since the beginning of 2016 we have divested non-strategic assets for a total value of approximately €260million.”

The buyer, Heaven Hill, is one of the largest bourbon makers in the US, with a portfolio that includes: Evan Williams Bourbon; Larceny, Elijah Craig and Henry McKenna Bourbons and vodka, gin, rum and liqueur brands.

Campari focussed on priority spirits brands

As part of its focus on spirits, Gruppo Campari sold its French winery last month, marking its final exit from the still wine industry as it turns its focus to spirits.

The Château de Sancerre winery was been sold to Maison Ackerman, the wine division of French-based company Terrena, for €20.5million.

Campari acquired the winery, which was founded in 1919 by Louis-Alexandre Marnier Lapostolle, the creator of Grand Marnier liqueur, in 2016 as part of its takeover of the Grand Marnier brand.

Gruppo Campari CEO Bob Kunze-Concewitz said: “With the disposal of the Sancerre winery, which follows the sale of the Italian and the Chilean still wine businesses, finalised over the last year, Gruppo Campari fully exits the still wine business, thus continuing to streamline its non-core activities and increasing its focus on the core spirits business.

“Since the beginning of 2016 we have divested non-core assets for a total value of approximately €117m.”

The company still produces Italian sparkling wines under the Cinzano, Mondoro and Riccardonna labels. 

Gruppo Campari is the sixth-largest player in the world spirits industry, with brands including Aperol, Appleton Estate, Campari, Skyy, Wild Turkey and Grand Marnier.

The booming popularity of Aperol and Wild Turkey sent Campari share prices soaring to an eight-year high in Quarter 1 of 2017.

Sales of the bitter orange liquer jumped 18%, while Wild Turkey sales role 24%, spearheading estimate-busting results for the company.

Total sales for Gruppo Campari reached €376.6 million (US$409.8m) for the period ending March 31, 2017, up 15% on the same period the previous year. Results were also driven by the acquisition of Grand Marnier, which contributed €32.5m (US$35.3m) to net sales.

 

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