Chapel Down said it would refocus on English wines and spirits by disposing of its Curious Drinks business, including beer and cider brands, brewery and a restaurant.
Curious Drinks was set to be placed into administration before being acquired by a division of Risk Capital Partners (RCP), the UK private equity group founded by Luke Johnson.
Chapel Down’s CEO, Frazer Thompson, said it was a difficult decision but that Curious Drinks had been hit hard by the economic fallout of Covid-19.
Around 90% of its beer sales came from restaurants, bars and the wider hospitality trade.
Chapel Down said there would be no redundancies from the disposal, although the deal was subject to several factors, including HMRC approving ‘various excise licences’ for RCP.
The deal would also reduce Chapel Down’s net debt from £7.2m to £100,000, the group said.
Around 10% of Curious shares are held by investors, including retail businesses. Under the terms of the proposed deal, these investors would be offered shares in Chapel Down at a value equivalent to 50% of their original investment in Curious, the firm said.
In a sign of contrasting fortunes for different parts of the drinks sector in the past 12 months, Chapel Down said its wine and spirits sales rose by 38% in volume terms in 2020.
Retail sales, including an increased focus on supermarkets, plus direct online orders have propelled this side of the business. UK wines have also enjoyed a boom in demand in recent years.
Thompson said, ‘Demand and respect for English wines, and Chapel Down in particular, is growing all the time and as the leading brand and business we see a significant opportunity and a very bright future for Chapel Down.
‘We certainly won’t be abandoning the hospitality business – we love it – and will support its return vigorously with our wines and spirits.’
Luke Johnson, founder of RCP, confirmed that the group would be taking on all Curious employees.
‘We see terrific potential in the Curious Drinks business, and we’re very excited about its future, despite the challenges of the past year,’ he said.
‘Brewing will always be a cornerstone of British culture, and the craft beer revolution has only strengthened that.’
Chapel Down producer profile (2020)