LONDON (Reuters) -Pernod Ricard stated on Wednesday it agreed to promote nearly all of its wine portfolio to the homeowners of Australia’s Accolade Wines, disposing of a dragging division to concentrate on its core enterprise of spirits.

The world’s No.2 Western spirits maker plans to promote its wine manufacturers from Australia, New Zealand and Spain, together with well-known labels like Jacobs Creek, Stoneleigh and Campo Viejo, topic to regulatory approvals. It didn’t disclose a price.

The transfer will see Pernod hone its portfolio additional in the direction of spirits like Absolut Vodka and Martell cognac, particularly liquors with the next price tag. It’s going to additionally proceed to personal champagne manufacturers like Mumm and its U.S. and French wine manufacturers, in addition to labels in Argentina and China.

Pernod stated in a press release the deal would permit it to direct its assets to manufacturers that drive development, whereas its former wine manufacturers would belong to a devoted wine participant with international gross sales.

“(They) will benefit from the focus required to achieve their potential, reinforce their position and seize opportunities around the world,” the spirits maker stated.

Wine gross sales made up simply 4% of Pernod’s gross sales in its 2023 monetary 12 months, once they declined by 2%. The corporate has more and more centered on costly spirits as wine has misplaced drinkers to beer and spirits in Western markets. Consumption in China, a former high-growth wine market, is now shrinking.

The wine business globally is grappling with a provide glut, forcing some producers to destroy vines, and up to date years’ harvests have additionally been hit by poor climate.

The consortium of traders that owns Accolade, Australian Wine Holdco Restricted, contains funds backed by Bain Capital and others. Accolade didn’t reply instantly to a request for remark.