Langton's sold to Woolworths

The hammer falls: ACCC deadline passes

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The Rewards of Patience by Andrew Caillard

The Rewards of Patience by Andrew Caillard [©Allen & Unwin]

Penfolds Grange - an Australian icon

Several years ago, a Woolworths wine marketing executive told us that it was the expressed aim of that company "to own the high end wine consumer".

That aim become another step closer to reality in February when Woolworths Limited (owners of Dan Murpheys and BWS) acquired Langton's Fine Wine Auctions, based in Melbourne and with a branch in Sydney, after nine months of negotiations. The price? Undisclosed, but reportedly around A$13 million.

The acquisition was completed on 2nd February and the ACCC commenced its routine 'informal review' on the 11th. Submissions from interested parties were open to the 27th. Who knows what may have been submitted or by whom, but that date has now passed and the acquisition is presumably set to be formalised. It is reported that founder Stewart Langton will remain with the company for at least three years to assist with the transition.

It is also reported that Woolworths is interested in expanding its online wine presence and Langton's fortnightly online wine auctions are seen as a way to expand into the online wine space.

One question on the lips of fine wine collectors is will Langton's retain its former independence? Smaller high end producers were well served in the past, and we hope that that will continue. The press release states that Langton's "will operate as usual until Woolworths has a complete grasp of its day-to-day operations". Andrew Caillard MW has not been mentioned in the press releases so far, but Langton's website (which gives no hint of the new ownership) would indicate that he will stay, and could have a greater role as Langton's expand into the new 'fine wine capital' of Asia - Hong Kong, which unlike Singapore is wine-tax free.

How Australian fine-wine collectors will feel about a relationship with the retail giant has yet to be ascertained. Will they care? A more important sentiment in 2009 might be how will reserve prices and auction clearance rates hold up in the face of global economic uncertainty? There are still plenty of collectors.... it could be a good year for some bargains, if sellers are prepared to meet the market.

It's not in Woolworths interests to degrade the Langton's brand, but we may see it more widely spread in future as the 'Langton's Top 100' moves off the dusty posters on wine collectors' walls and into a supermarket - or onto a website - near you. This is looking like a smart strategic move indeed.

Another question: will there be a counter-move by Coles/Wesfarmers? And if so, where?

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March 02nd, 2009
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