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Chapel Down to place Curious Drinks into administration

Published:  09 February, 2021

Chapel Down is to dispose of its Curious Drinks business to a NewCo, established by private equity firm Risk Capital Partners (RCP).

Subject to the granting of HM Revenue & Customs licences to RCP, Chapel Down said it intended to place Curious Drinks into administration, following which RCP will acquire the business and assets from the administrators.  

The decision followed a strategic review by the Board undertaken as a consequence of the effects of the Covid-19 pandemic on the hospitality industry, said the English winemaker.

As disclosed in Chapel Down’s interim results, with 90% of its beer sold to the on-trade, Curious Drinks had been “significantly impacted” by the shuttering of the hospitality sector. In contrast, with an “established strong brand and a more multichannel route to market, its wine and spirits business had “thrived”.

“The Covid-19 pandemic has upturned the best laid plans of businesses all over the world and has required companies to respond to the crisis with flexibility and agility. In our case that involved pivoting our multichannel strategy to have a stronger focus on supermarkets and e-commerce direct sales to consumers for our wines which resulted in volume sales growth of 38% in 2020,” said Frazer Thompson, CEO of Chapel Down Group.

“Demand and respect for English wines and Chapel Down in particular, is growing all the time, and as the leading brand and business we see a significant opportunity and a very bright future for Chapel Down. We certainly won’t be abandoning the hospitality business – we love it – and will support its return vigorously with our wines and spirits," he said.

It had, however, been "a very difficult year for the Curious Drinks business which, as a young brand with 90% of its sales to the on-trade hospitality sector, has been severely impacted by the uncertainty and frequent shuttering of that industry", he added.

“Following a strategic review, the Board has taken the decision to focus our energy and resources on building the Chapel Down brand and business to ensure that we continue to flourish. While this has been a difficult decision, we are very pleased to have found in Risk Capital Partners an excellent home for Curious Drinks – and the Curious team – where the business will be able to fulfil its exciting growth potential," said Thompson.

Subject to completion of the disposal occurring, the company said it would offer all registered Curious shareholders the opportunity to convert their shares in Curious into shares in Chapel Down. 

Looking ahead, Thompson said Chapel Down looked to the future with “increasing confidence and will continue to drive the business for the benefit of all our stakeholders”

Luke Johnson, founder of RCP, said: “We see terrific potential in the Curious Drinks business, and we’re very excited about its future, despite the challenges of the past year. Brewing will always be a cornerstone of British culture, and the craft beer revolution has only strengthened that. Curious is a great brand made in a fabulous facility, and with our support we believe the business can be developed further. We are particularly pleased to be taking on all Curious employees, who bring with them a wealth of insight and knowledge.”

There will be no redundancies as part of the disposal.