Huge international conglomerate buys two South African wine estates
Vinarchy, a global wine group with about R18 billion in annual sales, has added South Africa to its international portfolio.
Wine / Pexels: stevepb
CapeTalk's Lester Kiewit speaks to Dr Erna Blancquaert, a viticulture researcher at Stellenbosch University.
Listen below:
Vinarchy, a new global wine group with about R18 billion in annual net sales, has added South Africa to its international portfolio with the addition of Flagstone and Kumala wines.
The conglomerate is the result of a merger between Accolade Wines and Pernod Ricard’s Australian, New Zealand and Spanish wine assets.
At a glance, Vinarchy is the kind of corporate Frankenstein that makes traditionalists twitch: 11 wineries across four continents, more than 1,600 employees, and an empire of brands that includes Hardys, Campo Viejo, Jacob’s Creek, and the Southern Hemisphere’s largest winery, Berri Estates.
Vinarchy’s South African acquisitions are no outlier, as most say international appetite for South African wine estates has been growing in Europe and North America.
"... wine farms have had family links, but that's changing because of sustainability... the three pillars of sustainability are people, planet and profit... these are generating entities and so the profit margins are important, otherwise, why would we be doing business?"
- Dr Erna Blancquaert, viticulture researcher - University of Stellenbosch
Blancquaert also explains the reality of the wine business in South Africa and why merging with global conglomerates might be a viable option for wine makers.
"The reality in the South African wine industry at the moment is that only 8% of wine farms are profitable, 46% make a very low profit, and 3% break even, and there are about 43% of producers that make a loss..."
- Dr Erna Blancquaert, viticulture researcher - University of Stellenbosch
Blancquaert also explains challenges in the market that South African wine producers might not be able to compete with.
"Because of health reasons, there's also a shift to low or no alcohol... a major impact on wine sales... a dip in wine consumption..."
- Dr Erna Blancquaert, viticulture researcher - University of Stellenbosch
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