Buzet co-op buys Rigal and leverages AdVini’s export reach

Monday June 07 2021 by Vitisphere

 The Buzet and Rigal brands will remain independent – both in terms of locations and staff – and will be supported in overseas markets by AdVini's export offices. The Buzet and Rigal brands will remain independent – both in terms of locations and staff – and will be supported in overseas markets by AdVini's export offices. - Photo credit : Les Vignerons de Buzet

Co-operatives frequently merge but it is much more uncommon for a winery to base its development on buying a shipping company, particularly one outside its traditional geographical realms. This, however, is the tack taken by the Vignerons de Buzet co-operative, which produces 10 million bottles per year and boasts 160 member winegrowers farming 2,000 hectares of vines in the Lot-et-Garonne region. The winery has taken over control of Rigal, which markets 3 million bottles produced over 250 hectares of vines that are farmed by partner growers in Cahors, in the Lot region. It bought the business from Languedoc group Advini, which had been managing it since 2003, and was Jeanjean's first external growth investment.

At the Buzet winery, managing director Pierre Philippe had been mulling the idea of growing through acquisition for some time: “The primary weakness [of Buzet] was the lack of international reach, with exports accounting for less than 20% of sales”. The co-operative supplies a single appellation, over which it holds a virtual monopoly with 95% of production, and was considering external growth to develop a more attractive range for exports. At the beginning of the year, its wish found a soul mate when Rigal was put up for sale, with the Crédit Agricole bank tasked with handling the process. Rigal’s foreign sales account for 50% of its business and Malbec varietal wines, the company's hallmark proposition, pave the way for opening up promising new markets.

At his first negotiation meeting with Antoine Leccia, president of AdVini, Philippe remembers he was told that “Rigal was performing well and was profitable for the group” and that the Cahors shipping firm “would only be sold if there was an ambitious project behind it”. The sale therefore comes with a partnership arrangement aimed at successfully establishing a marketing hub for South-Western wines focusing on appellations. “The deal for relinquishing 100% of Rigal's shares comes with a sales contract. AdVini will be our international development branch”, summarises Philippe.

The group’s consolidated turnover is 35 million euros. Philippe has announced his intention of increasing this “rapidly” to €40 million, but stated that the amount paid for the company will remain confidential.

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