Shareholders in Australian winery BRL Hardy have approved the company's proposed merger with the US-based Constellation Brands, a move which clears the way for the creation of what will be the world's biggest wine group.
The acquisition of Hardy by Constellation was announced earlier this year, and has already been approved by the US authorities. All that remains now is for the Supreme Court of South Australia to rubberstamp the merger, which is expected to happen next week.
Meanwhile, BRL Hardy earlier this month reported record sales and profits for 2002, its 10th successive year of growth. Sales revenues rose by 16.8 per cent to A$84.3 million (€476.9m) while net profits increased by 16.8 per cent to A$84.3 million. Net operating profit rose 16.8 per cent to a record $84.3 million.
BRL Hardy's managing director Stephen Millar, who will head up the merged BRL Hardy-Constellation Brands global wine operations, said BRL Hardy's latest sales and profit growth had been achieved "in the most difficult wine industry trading conditions in the past decade".
"Pacific Wine Partners, our existing US joint venture with Constellation Brands, was a star performer throughout 2002 and more than made up for reduced earnings growth in Australasia and Europe," he said.
"While BRL Hardy continued to achieve solid sales growth in Australasia and Europe in the past year - up 12.3 per cent and 16.7 per cent respectively - competitive markets and heavy discounting eroded profit margins.
"On the other hand, sales and profit growth of our Pacific Wine Partners joint venture provided us with a dramatically increased presence in the US, the most profitable wine market in the world."
Millar said the main US growth had been driven by outstanding sales of BRL Hardy's Australian brand, Banrock Station, and by the US Blackstone brand which was acquired by PWP in 2001.
"Annual sales of the Blackstone brand raced above one million cases in 2002 and its very popular Merlot is now the number one selling red wine above US$11 in the US market," said Millar. "Banrock Station's remarkable sales growth has taken it to be one of the top selling imported Australian wines in the US."
Millar said the outlook for 2003 was for similar trading conditions, but with no further erosion of profit margins in Australia and the UK. "We have made a solid start to the year, and while the current vintage is expected to reflect the extreme drought conditions evident across most of Australia during the past year, the BRL Hardy group is very well placed to maintain its highly competitive sales position. Our record 2002 crush will more than make up for an expected decline of around 20 per cent in the current grape harvest," he said.