The McWilliam’s Wine Group (MWG) will “reset as an organisation” after successfully completing a $15.8m recapitalisation of the company with its strategic partner Margaret River Wine Production Pty Ltd (MRWP) and Australian agricultural fund manager Laguna Bay.

The deal sees MRWP take a seat on the MWG board and Chief Executive, David Pitt, told TheShout that MWG remains a family business, but one that will review the whole organisation, now from a base of “absolute stability”.

“The group is still predominantly family-owned,” Pitt said. “But through our strategic partner in [MRWP], they take a 19.8 per cent fully diluted position and that comes through a convertible loan note and as a result they get a seat on the board.

“In terms of the transaction Laguna Bay have invested significantly through MRWP as well as the Fogarty Wine Group and we are one part of a much bigger transaction. Laguna Bay are certainly taking this as a strategic long-term play and investing through MRWP.”

This investment now allows Pitt and the group to focus on its short and long-term plans, something that Pitt is able to concentrate more on now that the investment has been secured.

“The ASIC published results of the last couple of years are not impressive by any stretch. But the key point is that there has been significant improvement year on year and that trajectory will continue again through our FY19 year.

“We are really setting ourselves up strategically to go again in FY20 and beyond. So we’ll spend the next part of this year defining our strategic plan and then leveraging our partnership with MRWP.”

Pitt (pictured left) also said it was important that the company now recalibrates its position in the market place and looks at a more consumer-led recovery and strategic plan.

“We need to make sure that our brands are being marketed and developed in line with what the consumer trend is,” he told TheShout. “There is no point going down the path of a category that is in decline and consider that is something that will grow for us. It’s about really bringing that consumer lens back into what we do as a business and what’s in our portfolio.

“Even though we have the core portfolio we’ve got brands that have been extended and then extended again, so our portfolio is quite vast. We’ve done a lot of things for a lot of different customers, but ultimately it’s taken away from our focused efforts on what is core for McWilliam’s.

“I think when you look at the range around the MCW wines where we’ve re-focused and taken the position of taking a more premium product to market and used that to extend. I think these are some really good indicators of where the organisation needs to continue to move forward.”

Pitt added that this investment brings the opportunity for MWG to reset as an organisation and get into the detail of where the company will focus, which he said will be around a “fewer, bigger, better approach”.

He added: “We are kicking the tyres on every single part of the business. I need to take some costs out of the business, because we certainly have some exposure on a costs basis. Given where we have been financially, we haven’t really had the ability to make those choices. With a cash injection we can now really focus on our working capital play, pay down some debt and really start to get after where we want to grow in the future.”

Asked if those costs come from the brand or personnel sides of the business, Pitt told TheShout: “It’s a combination of those. The key focus is to be more streamlined around our brand strategy, we have a proliferation of brands at the moment and we are very diluted. If I reference back to the MCW range, if I had just that focus of that distribution of that range then we would be in a much more positive position than we are.”

Pitt certainly talks very positively about the group’s position and its focus on the future with good cashflow management and paying down the debt. MWG is a 140-year-old family run wine company, the sixth largest wine group in Australia which has endured a tough few years, but with a more strategic and streamlined focus, there is optimism that the future is bright for McWilliam’s.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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