NSW winemaker Casella Family Brands, the company behind Australia's favourite cut-priced drop, the Yellow Tail series, has snared South Australia's Howcroft Estate Vineyard for just over $9 million.
The deal for the property, located 10km south-east of Bordertown in the township of Mundulla, has been struck at about $22,000 per hectare of vines planted. The price is said to be below replacement costs for the region which average between $25,000 to $30,000 per hectare.
The sale comes just two months after the Griffith-based Casella bought Brand's Laira from McWilliam's Wines.
The latest move is part of a bolt-on growth strategy by the Casella family which saw it acquire Peter Lehman Wines tin the Barossa valley in 2014 for $57 million.
The move was aimed at broadening Casella's reach into the premium end of the market with Yellow Tail cornering the domestic market in the budget category. Casella sells more than 12 million cases of wine a year from its Griffith operations alone.
The Howcroft sale was negotiated on behalf of Sandhurst Trustees Ltd by Tim Altschwager and Nick Dean, of Colliers International.
"Howcroft Estate Vineyard is a large-scale wine grape producing asset, efficiently and expertly managed by Seven Fields Management," says Altschwager.
"It presented as an extraordinary chance for both investors and existing wine industry participants to secure or significantly strengthen their future in the Australian industry. As such, the property was highly contested."
Howcroft Vineyards, among the largest commercial vineyards in the Bordertown district, were developed between 1998 and 2000 and comprise a mix of premium varieties.
"The vineyard plantings, comprised of 100 per cent red grape varietals, are well managed and present in excellent condition, and there is a five-year grape supply agreement with a major wine company," says Dean.
The vineyard is located on the Limestone Coast Zone, which stretches as far south as Mount Gambier and includes the Coonawarra region.
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