AT first glance wine production consortium Growers Pty Ltd is hardly an overseas investment story.
Viticultural consultant Phil May, best known for his role in developing Pemberton-based wine producer Smithbrook, has put together a consortium of 17 Western Australian vineyard owners as seed capitalists in Growers.
The consortium is seeking to use its combined production to create a sizeable winery that can operate in the competitive export market.
In this case, the international investment connection is much less about very new money in the region than it is about rescuing an offshore investor whose wine producing dream was floundering.
Growers has bought the well-known Abbey Vale brand and signed up a long-term lease for assets of the Margaret River winemaker which had been put into external administration by its Swiss owners – Jurg and Regula Hauser.
Revitalised by Subiaco-based Plum Studio, the Abbey Vale brand is now the centrepiece of a strategic move by Mr May and his investors to capitalise on the structural changes taking place in the wine industry, where many smaller growers and producers are struggling to keep their heads above water.
The project does not only solve a problem for the Hauser’s vineyard, however. The purchase of Abbey Vale offered an answer for a growing number of Mr May’s viticultural clients, who were finding it increasingly difficult to sign up long-term supply contracts during a recent period of oversupply.
Mr May said about a quarter of his vineyard clients did not have supply contracts with wineries, and that number was likely to rise.
“We have looked to pool those clients under one brand to achieve some economies in production and achieve some volumes that provide some credibility in the international market,” Mr May said.
The 17 seed investors represent 400ha of vineyards in regions throughout WA, which are collectively capable of producing 4,000 tonnes of grapes.
These vineyards had signed up to a strict supply arrangement that sought consistent supplies of quality fruit to the operation and would not leave Abbey Vale short of the varieties it needed to make a complete range.
“We have some mechanisms in place that were established to ensure that our grape growing shareholders do supply the best parcels of fruit within market requirements,” Mr May said.
But he said it was not a case of Growers-owned Abbey Vale taking produce of inferior quality, but simply that, as a virtual start-up, the new producer’s needs were different to those of more mature winery operations.
According to Mr May, the Hausers have come on board as shareholders in Growers, which raised $1.25 million from investors to get the project off the ground earlier this year.
Australian Securities and Investments Commission records show that Australian Capital Equities executive Peter Gammell is among the shareholders of Growers.
Mr May said the company was seeking to raise $2 million in December to fund production growth from 650 tonnes to 1,400 tonnes (or around 100,000 cases) this vintage. A further $2 million will be sought in August next year.
Meanwhile, a question mark remains over the future of the Abbey Vale winery, which is used by a third party and does not suit Growers’ plans to use contract wine producers such as Naturaliste Vintners.
Another asset, the cellar door, is being refurbished after being gutted by fire.
