The Wine Group Boosts Australian Capacity With Loxton Buy

The Wine Group (TWG) is set to expand its production capacity, agreeing to purchase a 100,000-ton facility in Loxton, Australia from Australian Vintage Ltd. (AVL), the former McGuigan Simeon, for an undisclosed sum. The deal is expected to close August 18th. Located in South Australia’s Riverland Wine Region, Loxton is the fourth-largest winery in Australia, established as a co-operative in 1948 and consistently upgraded and modernized since then, according to TWG, which plans to retain the winery’s existing staff.

Loxton will join TWG’s existing Griffith, Australia operations, and both will be operated at full capacity to produce brands including Fish Eye, Foxhorn and Little Roo. The buy will also allow TWG—the world’s third-largest wine marketer—to “expand its high-quality Australian bulk wine offerings to its global network of bottlers,” the San Francisco-based company said in a statement.

TWG CEO David Kent added that Ross Mayfield, plant manager at the Griffith winery, will serve as director of Australia operations on an interim basis and supervise TWG’s Australia-based wineries, reporting to Steve Roden, vice president of operations.

For AVL, which previously agreed to sell the Loxton site to India’s Indage Vintners in 2008 before that deal fell through amid Indage’s ongoing financial woes, “The sale of the Loxton winery is the most important step in executing our strategy to be the lowest cost premium Australian wine producer,” said CEO Neil McGuigan. Loxton was to be sold to Indage for A$60 million ($62 million). At the time the winery reportedly had the ability to produce around 10 million nine-liter cases annually.

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