The French group — which owns Absolut Vodka, Jameson Whiskey, Olmeca Tequila and Beefeater Gin — announced the sale of seven wineries in Australia, New Zealand and Spain Wednesday, saying it would allow the company to direct more resources to its premium spirits and champagne brands, which “drive the growth of its business.” The sale to Australian Wine Holdco Limited, a consortium of international investors, will see Pernod Ricard offload 10 wine brands: Jacob’s Creek, Orlando, St Hugo, Stoneleigh, Brancott Estate, Church Road, Campo Viejo, Ysios, Tarsus, and Azpilicueta. No financial details were disclosed.
The deal comes after wine consumption globally hit a 27-year low last year, according to an estimate by the International Organisation of Vine and Wine (OIV), an industry group. Pernod Ricard reported a 7% fall in sales for the wine brands it plans to sell in the first quarter of this year, mainly as a result of a decline in popularity of Jacob’s Creek in India and Campo Viejo in the U.S.
Wine drinking has been on a steady downward trajectory since 2018, driven by a decrease in consumption in China and as high inflation has eroded disposable incomes worldwide. Consumers have also been opting for beer and spirits instead, or choosing to forego alcohol altogether due to health considerations. “The divestment (by Pernod Ricard) makes sense as the segment has been underperforming for a while now and the global wine market is still challenging,” Sarah Barrett, .
