The 15th largest producer of wine in the US, which also produces a number of other well-known alcohol brands, has filed for Chapter 11 bankruptcy.
The brand placed the blame for reduced demand of its products on consumers shifting preferences following the global pandemic.
100s of Millions of Assets
The company, while currently struggling with bankruptcy, maintains control over a substantial portfolio of assets.
It had an estimated $475 million worth of assets on March 31, which it is still looking to sell.
Seeking Additional Financing
The alcohol brand is seeking additional financing to allow it to continue operating as it sells off its assets.
They are looking for $60.5 million to assist in the fulfillment of its $400 million worth of debts.
Everything Up for Grabs
Vintage Wine Estates are looking to sell off all of their remaining assets.
They are one of the largest wine producers in the country, ranked the 15th biggest producer in the US.
Vintage Wine Brands
A number of well-known brands are produced under Vintage Wines, sold at top retailers.
Vintage owns Ace Cider, which can be found at Target stores, and is a budget cider brand.
History of Vintage
Despite the name, Vintage Wine Estates were founded relatively recently before making a rapid expansion.
They were founded by Pat Roney back in 2009 as the Napa Girard Winery added an additional 2 vineyards.
Impact of COVID-19
After Covid, consumer demand for alcoholic products waned, and several businesses struggled to adapt.
Vineyards across the states ended up with a grape surplus, which it was no longer commercially feasible to develop into wine.
Wasteful Solution
In response to the grape surplus, vineyards made a hard choice due to market factors.
They destroyed their stock of grapes due to the oversupply, rather than converting them into wine.
Ebbing Taste for Wine
Wine demand across the US has reduced quite significantly since a 2021 peak.
Wineries in the US sold 377 million cases of wine in 2023, a marked dropoff from the 445 million sold in 2021, according to BMO Financial Group.
Implications for Vintage Stock
The latest news represents the end of the road for Vintage Wine Estates stock owners, as share prices fell 40% following the announcement.
The stock is currently selling at only 6.7 cents, and will shortly be delisted.
