McWilliam’s sale, Yalumba launch, Dawine Ltd

McWilliam’s for sale?

A small article in The Australian on 7 March revealed interesting news about McWilliam’s Wines, if it’s true and there are doubt’s. 

“Accolade Wines’ sale process may be on ice, but could another be on its way in the form of McWilliam’s Wines?”

McWilliam’s for sale would be a shock for some, but shouldn’t really surprise. At the back end of 2015 McWilliam’s sold Coonawarra-based Brand’s Laira to Casella. Was this to prop up an ailing company?

Maybe. McWilliam’s has many wonderful wines but none that are globally recognised by consumers as being “great” (though its Lovedale Semillon should be and McWilliam’s produces wonderful Hunter Valley shiraz). Unfortunately, in the world of wine, quality is not the driving force of success.

The article speculates who might buy McWilliam’s. Not Accolade Wines or Treasury Wine Estates is the conclusion. TKR agrees.

Instead of disposing of the whole, McWilliam’s could strip the company back to its original Riverina and Hunter Valley base, getting rid of Evans & Tate in Western Australia, but that may not be enough. A full sale may be the only option but there again the report could be, as we think, false.

Brand new, old hat

On 1 March ASX-listed Brand New Vintage (BNV) officially changed its trading name to Dawine Ltd with a listing code of DW8.

BNV listed on the ASX in April 2000. It acquired Dawine in or around June-July 2016. Dawine is described as an Australian private company with a business-to-consumer e-commerce wine platform targeting Asia.

On the Dawine website  the boast is: “We want to see you enjoy the same best quality and value for money; hence, we have carefully selected the wines presented on DAWINE through our long standing and personal relationships with wine makers from some of the world’s best wine regions (including France, Australia, Italy, Chile, New Zealand, Argentina).”

As yet only eight SKUs are listed. All are Australian, with several owned by the Atkins family. Sam Atkins is coincidentally on the board of Dawine and was CEO of BNV. As all SKUs are Australian we presume the rest of the portfolio is being assembled, though we find it strange that a new company could be launched and ASX listed in such a half-cocked fashion.

It’s Dawine’s intention to “adopt two methodologies of procuring wine from global wine regions. Supply agreements have been signed with producers to provide wine to Dawine on an ongoing basis via a consignment model.”

Dawine says this will reduce the capital expenditure outlay required. True, but is it likely producers will want to get involved in such a scheme? There is little in what Dawine has said that in TKR’s opinion would be attractive to producers.

The past five years of BNV trading:

Interesting that after such a decline and run of losses the directors managed to extract about $390,000 in fees each year. Especially as Brand New Vintage only had two brands, and as far as we can tell only dealt with two distributors. The brands were One Planet, mainly sold in the US, and Yarra Valley-based Sticks, which BNV sold at the back end of 2015.

Before the sale of Sticks a loan of $325,000 was acquired with a fixed interest rate of 11.68 per cent. That was a good return for the loan supplier with bank deposit account interest running at about 3 per cent at the time. According to the Brand New Vintage 2016 year-end accounts the loan came from Joval Pty,  owner of the Casama Group, which in turn owns the distributors Red + White and Mezzanine (Sticks is in the Red + White portfolio). The whole and a lot more besides is under the control of the Valmorbida family.

Anyhow, Dawine is now trading on the ASX and some must think it a good risk, as it undertook a $3 million capital raising that was oversubscribed. The shares opened on 1 March at 27 cents but were down to 18 cents at close of play on 7 March.

 

New elite wine from Yalumba

A new member of the Australian vinous elite will be unveiled globally on 12 May, when Yalumba presents to the world ‘The Caley 2012’.

The Caley is a Coonawarra-Barossa blend of cabernet sauvignon and shiraz.

At $350 a bottle it’s not going to find its way into many households.

Without tasting the wine, I have no doubt that it is of high quality and applaud Yalumba for releasing such a prestige wine. Australia needs several top end wines that will attract those with the money to indulge in what is considered the best.

Penfolds Grange is top of the Australian rankings but there is room for several others, excluding those producers that knock out a wine and slap a huge price tag on it thinking because it costs bags of doubloons the ostentatious but ill-informed consumer will fall for the illusion and buy it.

For Yalumba to release a wine at this asking price means a lot of thought, care and planning has been involved in its creation. TKR has that much confidence, trust and respect for Rob Hill-Smith and the Yalumba team. In our mind, wine wise the name Yalumba is up there with the Penfolds and Rothschild’s (re wine) of this world, or should be.

It’s a limited production wine of about 400 dozen 75cl bottles and some large format bottles. Long-time senior winemaker Kevin Glastonbury is in charge of production. It will always be a Coonawarra-Barossa blend released at five years of age, and will not be made in unsuitable vintages.

Aldi is champ again

Aldi is the champ for the fourth time, according to the 2016 Roy Morgan Research Customer Satisfaction Award for Supermarket of the Year. Well done to Aldi but what criteria does Roy Morgan use? We asked and were told

“Each month we will publish on our Customer Satisfaction Awards website the top five organisations from our Customer Satisfaction monitor for each sub-category. The winner for the calendar year will be the organisation that has achieved the most months with a number one ranking. In the event that two organisations tie with the most first rankings, the winner will be decided by their highest overall percentage for the year.” 

Customers are asked to rate products/services on a scale of:

  • Very satisfied
  • Fairly satisfied
  • Neither satisfied nor dissatisfied
  • Fairly dissatisfied
  • Very dissatisfied

Roy Morgan combines those who were fairly satisfied and very satisfied and calculates this as a percentage of total customers. For every category, only customers of that product or service are included.

Roy Morgan says it has a base of 50,000 Australians, from whom it collects information annually.

First Choice was liquor retailer of the year.

UK not looking so shipshape

Vinexpo CEO Guillaume Deglise came up with an interesting prediction this month. Deglise thinks when the UK withdraws from Europe it will also cease to be the main transhipment point for Australian and New Zealand wines into Europe.

It’s a valid point and in no way a misguided prediction. This shouldn’t affect shipments to the UK or indeed sales within the UK. Future agreements between UK and the EU will dictate if shipment into the UK then transportation to the EU will remain financially worthwhile.

There could be complex paperwork involved and time constraints may play a part. Shipping direct to the EU is easy enough. Rotterdam is a fully functioning port with all the latest logistical technology.

The issue may be for those that ship in bulk containers and bottle or bag at Accolade’s plant in Bristol, Kingsland Drinks in Manchester or other bottlers.

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