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New Zealand Wine Company Buys Historic Australian Shiraz Winery

Barossa Valley Estate, a Shiraz icon with financial troubles, sold to Delegat’s Group Limited

Augustus Weed
Posted: May 2, 2013

One of Australia's historic wineries, Barossa Valley Estate, has a new owner. Delegat’s Group Limited, the New Zealand wine company behind the Oyster Bay brand, has purchased the Barossa valley producer for an estimated $25.6 million. Managing director Jim Delegat is betting that his firm can turn around the storied winery, which has suffered financially recently. The deal, expected to close by June, includes the winery, all assets and grower contracts, as well as 98 acres planted to vines.

The company pursued Barossa Valley Estate (BVE) because of its iconic name and the winery’s reputation for Shiraz. BVE produces a range of wines, both red and white, at its modern facility in the Barossa. It’s best known for its signature E&E Black Pepper Shiraz, which has received classic ratings (95 points or higher on Wine Spectator’s 100-point scale) several times, and less expensive stablemate Ebenezer Shiraz.

Delegat is hoping to reestablish BVE in global markets, banking on wine drinkers' familiarity with Barossa Valley Shiraz, just as it focused on New Zealand Sauvignon Blanc at its other wineries. “These wine styles are complementary to the group’s current business and provide opportunity for substantial future sales and growth globally,” Delegat said in a statement.

Barossa Valley Estate was founded in 1984 by a group of Barossa grapegrowers who banded together to make their own wine at a time when the Australian government was urging growers to pull out Shiraz for other varieties. As the wines gained accolades, the growers decided to expand the winery and partnered with BRL Hardy, which was later bought by Constellation. The winery has a dedicated vineyard but is also dependent on grapes from its shareholders’ vineyards.

In 2011, Barossa Growers Holdings, Ltd., which represents the more than 100 growers who originally started the label, bought Constellation’s 50 percent share. But Australian wine was facing a challenging market and the deal eventually left the winery without distribution in the U.S. and Canada, two of its largest markets. The winery was placed into receivership in early 2013.

The sale is part of a wider effort by Delegat’s to expand its portfolio. Prior to this deal, it purchased two financially troubled wineries in New Zealand, Matariki in Hawkes Bay and Stony Bay in Marlborough.

Nikola Delegat and his wife, Vidosava, founded the company in 1947, purchasing 10 acres of land in Auckland, New Zealand. In the early 1970s, the company branched out, buying vineyards in Marlborough and Hawkes Bay. It makes wines under its Delegat’s Wine Estates label and owns Oyster Bay, which is one of the fastest-growing New Zealand brands in the U.S. according to Impact Databank, a sister publication of Wine Spectator.

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