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Constellation sells wineries and vineyards

Constellation Wines Australia has announced the sale of three wineries and 23 vineyards.

The sales are expected to yield AUS$200m (£93m) and provide a net gain of AUS$50m (£23m) after expenses which include the costs connected with the 350 jobs that will be axed.

The jobs, which represent 22% of the company’s workforce, are mostly in the winemaking, packaging and viticultural branches.

Constellation will quit two South Australian wineries – the 115-year-old Leasingham winery at Clare and the 12,000-tonne Stonehaven winery at Padthaway.

Goundrey Wines, at Mount Barker in Western Australia, is also to be put on the market. The winery was acquired by Constellation in 2006 when it took over Canada’s Vincor.

Constellation, however, will retain all three brands.

Constellation said it will also drop 30% of its stock-keeping units (SKUs – individual wines under certain brands), increase prices, and close its bottling plant at the Houghton winery near Perth. It will now truck wine across the Nullarbor Plain to Reynella, near Adelaide, for packaging.

‘We are eliminating less profitable SKUs, focusing on brand-building and increasing pricing to restore appropriate levels of profitability,’ said Bob Ryder, Constellation’s chief financial officer.

Head of Constellation Wines Australia John Grant said the company was repositioning itself to focus on ‘high-quality, higher-value wines to suit global consumer demands’.

The vineyard sales will reduce the portfolio from 35 to 12 wholly or jointly owned properties.

Written by Chris Snow in Adelaide

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