SOUTH AFRICA  –  Wine producing companies Bonnievale Wines Cellar Group and Wandsbeck Wines announced that the two entities will merge into one winery to be known as Bonnievale Wine Cellar reports Fin24.

According to a statement by the two companies, the amalgamation of the two wineries into Bonnievale Wine Cellar, will create a wine company with assets of more than US$22.4 million and cellar capacity of 40 000 tonnes.

Anton Smuts, Bonnievale Wines group chair, said that changing production and marketing conditions have driven the merger as a strategy to encompass producer sustainability and profitability.

The deal also seeks to ensure product supply and extension, and provide long-term market security and growth for the future.

The agreement follows 15 months of negotiations between producer members and directors.

According to Philbert Lourens, Wandsbeck’s chairperson, good cultivar diversity, unique style and suitable climate at Wandsbeck will contribute to Bonnievale Wines Cellar’s goals and performance.

“Wandsbeck’s membership and tonnage has declined over the years and the expectation is that a larger company will reduce production costs while raising profitability.

The aim is to create a good economic and sustainable future for our members,” he added.

Bonnievale Wines group CEO, John Barnardt, has been appointed as executive head of Bonnievale Wine Cellar and under the merger agreement, production will continue at existing facilities.

Each winery will run at full capacity with a winemaker and production team on site, while management and administrative staff will be based at the former offices of the Bonnievale Wine Group.

The two entities said that empowerment remains a key part of objectives under Bonnievale Wine Cellar.

The major objectives will include a focus on vineyard ownership, driven mainly by free market demand and supply, increased participation in winery middle and senior management; black economic empowerment (BEE) shareholding in a subsidiary wine marketing company; and, increased involvement in community projects.

Management and administrative staff will be based at the former offices of the Bonnievale Wine Group, which is also the location of the brand hospitality centre and customer service hub for both merging entities.

This is the second merger that the Bonnievale Wine Group completes in 12 years with the recent 2006 tripple merger between Bonnievale, Merwespont and Nordale co-operative wine cellars.