Brl Hardy Case Study

The wine industry is a very competitive industry that has yet to see emerge a true global company with a global brand. During the 1980s and 1990s changes in the global wine industry had a major impact on these emerging Australian companies. A rationalization and consolidation among wine wholesalers and retailers was increasing the power of historically fragmented distribution channels. These developments were occurring in an environment of rapidly growing demand from new consumers in nontraditional markets. BRLH’s roots could be traced back to 1853 when Thomas Hardy, a 23-year-old English vineyard laborer, acquired land and planted it with vines. In 1857 he produced his first vintage, exporting two hogsheads to England, and by 1882 he had won his first international gold medal at Bordeaux. When Hardy died in 1912, his company was Australia’s largest winemaker, but also one of the most respected. After his death his sons took over the company and formed Australia’s first cooperative winery in 1916, naming it the Renmano Wine Cooperative. With the success and the development in the market Hardy felt they need to expand on its UK sales. This move led management to begin talking about the possibility of buying European wineries that could provide their newly acquired distributors with the critical mass and credibility to give Hardy’s wines greater access to Europe. Hardy’s board felt this was an ideal time to invest. Almost immediately, however, problems surfaced in all three of the European acquisitions and millions of dollars. Combined with a recession driven market slowdown at home, these problems plunged Hardy into losses. When one of Hardy’s banks called in a loan and the company was forced to look for a financial partner, BRL was there.
BRL management decided to propose a merger. Following the merger, ex-BRL executives assumed the majority of top jobs in BRLH. These decisions within the top management caused some conflicts and indifference in the corporate