MEDIA RELEASE: David McWilliam, fifth generation family member and former director of McWilliam’s Wines Group, has been working on a proposal to save the 144 year old company.
His proposal seeks to provide creditors with a strong return and an ongoing trading relationship, and to retain employees under a recapitalised business with a new direction.
It also offers suppliers – many of whom have worked with the firm for many years and, in some cases, over a century and across multiple generations – continuity of business.
Mr McWilliam says that while existing family shareholders may not see a financial return, many support the plan.
“Our desire is to see the McWilliam’s business live to fight another day, with a family member leading the charge, rather than being broken up.
“There is a lot of goodwill among the McWilliam’s Wines suppliers, staff, customers and consumers, and we are working closely with HLB Mann Judd Sydney, to structure a deal for the Administrators that respects these stakeholders and creates an ongoing relationship into the future, instead of heading down the liquidation path.
“In addition, some of the major shareholders are also important suppliers for the business and under this proposal they will be able to remain so.”
McWilliam’s Wines was placed in administration early in 2020. In July, private equity group Prcstnt Asset Management proposed a $46 million acquisition plan that creditors voted in favour of. However the offer fell through in mid-December after Prcstnt allowed the deadline for the deal to expire.
Simon James of HLB Mann Judd, said that McWilliam’s Wines has an extensive and valuable portfolio of assets including wineries, vineyards, and plant and equipment, as well as its brands such as McWilliam’s and Mount Pleasant.
“McWilliam’s Wines Group is an iconic Australian business that has strong potential for future growth under the right leadership,” Mr James said.
Mr McWilliam said that Prcstnt’s offer may have been affected by the trade tensions with China.
“The recent trade issues with China, which saw tariffs placed on Australian wine, will put pressure on those wine producers who have been relying on exports to this market.
“If the proposal from Prcstnt was backed by Chinese investors, and their strategy was centred around China exports, then there is logic to them walking away given the current tariffs. Indeed, any buyers from China are unlikely to have much chance of approval given the current political dynamic.”
Mr McWilliam said that his plans for the business include expanding distribution domestically and, in due course, to new global markets.
“I have plans to restructure the business through a number of cost-targeted initiatives initially, but then to rebuild for growth and provide the scale that the business was built for. Most importantly, I have put together a team to not only turn the business around but return it to its former glory.
“The near term focus will be on shifting to a customer-led organisation, and partnering with our customers to restore and expand distribution domestically. Over the medium term we will drive export growth with strategic partnerships across the traditional international markets including the UK, US, and Canada where McWilliam’s is well known.
“Once the business is turned around and volumes start to increase, we will take advantage of the current low utilisation of the McWilliam’s assets and consider targeted consolidation opportunities.”
Mr McWilliam said he believes his proposal has a good chance of succeeding where others may have failed.
“Unlike a lot of family businesses, the McWilliam’s family business has a very wide ownership structure of over 80 shareholders. This has meant that no one in the family has a strong individual financial incentive or stomach to turn things around. Nor has it been easy for this wide collective of family members to agree on the correct strategy.
“There’s no doubt that it has been frustrating to be part of a family business that has fallen a long way from where it once was. I have grown up seeing the business in both the good times and bad times and more importantly, I have witnessed a lot of the missed opportunities along the way.
“From here, I see value not only in the individual assets but in the business as a whole and maintaining the brand and continuing its rich tradition. I think the business still has considerable wine production and iconic brands but most importantly there is considerable value in the people who remain committed to the business and producing quality wine.
“In an industry that sees new brands come and go I believe that I can restore McWilliams into the household name that it once was.”