Several WA grape growers face considerable uncertainty after the collapse this week of Margaret River winemaker Evans & Tate Ltd.
Several WA grape growers face considerable uncertainty after the collapse this week of Margaret River winemaker Evans & Tate Ltd.
Appointed by E&T’s banker ANZ Banking Group Ltd, receivers McGrathNicol have assumed control of the assets and put up the for sale sign after efforts to restructure the group’s balance sheet failed.
The appointment of receivers came after E&T put in voluntary administrators, ending a two-year battle to turn around its fortunes.
It is unclear at this stage whether E&T’s growers have been paid for the 2007 season. E&T is understood to have contracts with a number of growers in the South West as well as commercial arrangements with the company’s former executive Franklin Tate.
McGrathNicol partner Peter Anderson said he had concerns about the terms of some of E&T’s grape growing contracts, which he said were at uncommercial rates.
“We would look to address that issue as part of a sale,” Mr Anderson said.
He said he would need to “revisit” some of E&T’s grower arrangements.
Mr Anderson’s comments come after E&T revealed that its potential investors – Peter Fogarty’s Pendulum Capital Pty Ltd and McWilliam’s Wines Pty Ltd – had abandoned a restructure agreement after due diligence work had revealed a series of conditions, including grower contracts, that were not capable of being satisfied in the time required.
Mr Anderson said E&T had sufficient grape supplies and plenty of access to fruit.
Industry sources suggest most of E&T’s growers would not have been paid a final instalment for this year’s vintage, with grape growing contracts typically paid in three tranches between the beginning of the grape harvest and September 30.
It is unlikely they will recover money owed, with the bank getting priority on its debt, which is about $100 million.
Many WA grape growers have only just started to enjoy a pick-up in demand for fruit after enduring tough times several years ago.
Wine Industry Association of WA president John Griffiths said while E&T’s collapse was “unfortunate” it at least came well in advance of the 2008 vintage. “If this had come right before vintage it would have been very worrying,” he said.
