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Tandou to leavethe wine business and sell assets

Published:  23 July, 2008

In another sign that the Australian grape glut is starting to bite harder, Tandou has announced that it will exit the wine business as soon as it can find a buyer for its winery and popular Broken Earth brand. The company said it wanted to concentrate its efforts on fruit growing and cotton farming, which are more profitable.

Tandou chief executive Guy Kingwills said: We need to focus our resources and, strategically, we have made the decision to focus our resources in the areas of the cotton farm and the orchard areas and to exit the wine business.'

About 30 people are employed at the winery in Riverland's Monash region, and Kingwell said he cannot guarantee there will be no job losses as a result of the sale.

He added that he hoped to pass on the winery's 50 or so contracted grape growers in Riverland and Victoria as part of the sale.

Peter Bisley, sales and marketing director for Tandou's UK importer PLB, said that it was business as usual as far as we are concerned. It's a real shame that Tandou has decided to leave the wine business as it has worked really well alongside us to develop the Broken Earth brand. We have had good success with it since we relaunched it at last year's Australia tasting with new wines and packaging, especially in the regional wholesalers and impulse, where store owners are looking for something different to the supermarket offerings.

I suppose the decision to exit the wine business is symptomatic of what is going on in Australia at the moment. We are just hoping that the new owners will want to carry on with what we have started.'

Two weeks ago, Tandou reported a loss of A$6.1 million in the six months to 30 June, despite a 40% increase in sales to A$13.5 million. Constellation, Foster's and Evans & Tate have all put processing facilities up for sale in recent months.