Treasury Wine sells Rosemount back to the Oatleys to bet on Penfolds

Treasury Wine Estates, the company behind Penfolds, is selling Rosemount back to the family that created it. The Oatleys, the billionaire clan whose patriarch Bob Oatley built Rosemount from a Hunter Valley start into one of Australia’s best-known wine exports, are taking the brand home along with two smaller labels, Ingoldby and Secret Stone. For the seller it is housekeeping. For the buyers it is a bottle with their surname on its history.

The two sides of the deal want opposite things from Australian wine. Treasury wants fewer brands, higher prices and a portfolio led by Penfolds, the label that sells Grange to collectors in Shanghai and New York. The Oatleys want the everyday bottles a listed company no longer has room for. One side is betting on scarcity. The other is betting on memory.

Penfolds gets the money, Rosemount gets a family

Bloomberg first reported the sale, and Treasury confirmed that the three brands and their associated inventory will go to A.G. Oatley Wines, the family’s wine business. Neither side disclosed a price. Treasury keeps royalty-free rights to sell Rosemount in Europe for up to three years, so customers there will see no immediate change in how they order.

Angus Lilley, Treasury’s managing director for Australia, New Zealand and Europe, framed the sale as one step in a longer clean-out. “Since we announced our transformation agenda last year, we’ve sold five brands and a range of non-priority assets,” he said, adding that the Oatleys “bring deep experience in Australian wine.” Seppelt, Tollana and Rouge Homme have already left the stable. The company is shrinking from 76 brands to a priority list of 30.

At the top of that list sit three “power brands”: Penfolds, the Californian label DAOU and New Zealand’s Matua. Below them come regional names such as Wynns, Pepperjack, Squealing Pig and the Napa wineries Beaulieu Vineyard and Stags’ Leap. Treasury expects those ten brands to produce about 90% of group net sales within five years. Rosemount, which at the turn of the century was the second-best-selling Australian wine brand in the United States, did not make the cut.

A homecoming paid for by an island

For the Oatleys the deal is personal, and Sandy Oatley, who owns the family wine business and worked beside his father on Rosemount for more than two decades, said so. “We are thrilled to be able to bring Rosemount home to our family once again,” he said, calling the chance to work on it with his daughter Nicky a full-circle moment. Nicky Oatley said the family was not yet ready to share its plans for the brand.

The family has the cash to make plans. Last December it agreed to sell Hamilton Island, the Whitsundays resort Bob Oatley bought in 2003, to Blackstone for about A$1.2 billion. Days before the Rosemount announcement, A.G. Oatley Wines also bought Murray Street Vineyards in the Barossa Valley, with its winery, cellar door and vineyards.

The numbers on Treasury’s side explain the hurry. Bob Oatley founded Rosemount in 1969 and sold it into Southcorp in 2001 in a deal worth almost A$1.5 billion; the brand passed to Treasury in 2011. In August the company reported a statutory loss of A$1.08 billion. Chief executive Sam Fischer has promised to cut A$100 million a year in costs, and about 170 corporate roles went this month. Treasury shares were unchanged at A$5.61 after the announcement, and the sale is due to complete on 23 October.

A quarter of a century ago Rosemount was worth a billion and a half to a public company. Now a listed group is handing it back to a family for a price neither side will print, and the Oatley name returns to a label that never really stopped carrying it.

Tags: Oatley family, Penfolds, Rosemount, Treasury Wine Estates, wine industry