Australia's wine sector is braced for more mergers and acquisitions after Hardys owner Accolade Wines said it was in talks to buy award-winning Grant Burge Wines.

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The view from the tasting room at Grant Burge’s Meshach Cellar in Barossa

Accolade
, which is controlled by Sydney-based Champ Private Equity, confirmed that it was in ‘exclusive discussions to acquire the award-winning Barossa-based Grant Burge Wines‘.

While it warned that there was no guarantee of a deal, its announcement is further evidence of a fresh consolidation trend in the Australian wine industry.

Late last week, the owner of the Yellow Tail brand, the Casella family, announced that it has agreed to buy control of around 95% of rival Peter Lehmann Wines in a deal worth approximately A$60m. Casella said it intended to follow this up by acquiring all remaining shares in Peter Lehmann.

Many Australian wineries have struggled for profitability in the past decade, hit by foreign exchange rates, overproduction and greater competition in key markets, such as the UK and US.

Moves by Accolade and Casella reflect this financial instability and also a desire by both companies to reinforce their position at the premium end of the market.

‘The need for consolidation in the Australian wine sector is long overdue,’ said Toby Langley, director at wine industry broker Gaetjens Langley and who advised Lehmann on its deal with Casella.

‘Our feeling is the pace of consolidation is starting to accelerate and will continue at some pace in 2015/16,’ he told Decanter.com.

Written by Chris Mercer