South African wine brand Stormhoek and Australian sister brand Camden Park are up for sale after the collapse of parent company Orbital Wines.

The company, which was recognised for its pioneering marketing techniques, went into administration on 21 December following months of cash flow problems and falling sales for key brand Stormhoek, according to a source.

It is understood the company ran into trouble last summer after buyers at Waitrose and Sainsbury's dropped the wine.

"It seems the company's trouble started when Tesco began selling the wine for £4.99 - £1 cheaper than anywhere else," said a company insider. Rival retailers were unhappy and subsequently de-listed the wine."

Tesco was unavailable for comment as the The Grocer went to press.

An application was made to the company's bank to extend its overdraft facility in the autumn but was refused. Directors were subsequently forced to call in Menzies Corporate Restructuring to take over affairs, said the source. Affiliate businesses California Direct and Bulk Brokers International are also affected but the South African production arm is spared.

Orbital won acclaim for its innovative campaigns for Stormhoek, tapping into a new generation of drinkers by harnessing the power of online marketing. It became renowned for its successful link-up with blogger and cartoonist Hugh MacLeod of Gapingvoid.com.

The industry was shocked at the demise of what was regarded to be a progressive and innovative company.

"We are very disappointed to hear the news about Orbital Wines," said Jo Mason, UK market manager, Wines of South Africa.

"Stormhoek had the potential to become an important brand for the South African category and Orbital's drive and innovative approach to marketing reflected well on perceptions of South African wine."

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