Case Study:

Buying a wine business in the current market

04 May 2021

Peter Toll , Perth Office Managing Partner; National Leader, Food & Agribusiness; International Liaison Partner; Partner, Corporate Finance |

With increasing tariffs imposed by China and falling prices of grapes and wine exports, would you invest in a winery business right now?

According to the Department of Agriculture, the predominant reason for reduced prices is the loss of China as a significant export market for Australian wines. As a result, the pressure is on Australian producers to find alternate markets and expand their supply chain to different geographies.

However many business owners are looking to cut their losses, take a hit and sell up or diversify assets. But is the outlook for selling a wine business as bleak as it seems?

BDO was recently approached by an established family business that had made a strategic decision to divest their winery business as it was not core to the primary focus. To help the owners understand their options we assessed the options available including assessing the viability, business and financial impacts of each. Following consideration by the board, a sale process was chosen as the most attractive option.

Our team prepared a detailed information memorandum outlining the business and opportunity. We identified, screened and approached suitable targets, and secured several attractive offers for the business. From this, we prepared a summary and assessment of the various offers for the client and advised on the merits of each offer to enable the board to make an informed decision.

We then project managed the transaction to completion, achieving a sale price above the client’s initial expectation.

The extensive experience of the BDO Agribusiness team was invaluable in making the process as smooth as possible. From paddock to processing, BDO works with businesses across all stages of the food and agribusiness value chain. Our agribusiness specialists have an extensive understanding and appreciation of the issues the food and agribusiness sector faces. This is backed up by significant experience across a diverse range of food and agribusiness clients, from producers to retailers and everything in between.

We understand that each agribusiness faces a different set of challenges and opportunities. You may be focusing on fine-tuning your business model, exploring new export markets, looking for investment to drive your growth or deciding whether to sell. Whatever your business stage, BDO can provide the support you need to unlock challenges and maximise growth.

Our team provides no-nonsense strategic advice, helping you make better-informed decisions. Whether you need to streamline your operations, review your tax strategy, access government support initiatives, become investor-ready or divest your business we can help.

Contact the food and agribusiness team for a confidential discussion on how we can assist your business.