Former ERG Ltd chief Peter Fogarty has extended his reach into the wine industry, establishing a footprint in Margaret River with the takeover of low-key producer Deep Woods Estate.

The purchase, for an undisclosed sum, almost doubles capacity to about 1,100 tonnes in the niche wine empire of Mr Fogarty and his wife Lee, which includes his Jarrahdale operation Millbrook Winery in the Perth Hills wine region and the tiny boutique Lake’s Folly in NSW’s Hunter Valley region.

Nearly 20 years old, Deep Woods has been owned by Malcolm and Margaret Gould since 1991. It is located on Commonage Road near Wildwood Road and offers plenty of room to develop and expand the small existing vineyards.

Mr Fogarty said he was attracted to the location, the opportunity to expand and improve the current range, as well as the keenness for Mr and Mrs Gould’s son Ben to remain as winemaker.

Another son, Daniel, will remain employed by the winery.

“I have looked at about 10 others,” Mr Fogarty said of his search for a Margaret River acquisition.

“I didn’t find many that were appealing. Most had wine they could not shift whereas Deep Wood did not have enough wine.”

Among the plans is a redesign of Deep Wood’s labels, though the name would be retained.

Mr Fogarty said he had no plans to consolidate the group or grow it significantly, though he would make Lake’s Folly wines available through Millbrook and Deep Woods cellar doors, as well as a few Western Australian restaurants.

He played down the strategy of his acquisition, which comes just a few months after interests associated with Alan Newman took a stake in wine consolidator Australian Wine Holdings, stating he was not a bull investor.

“It is fair to say I think the industry has been through a tough time but I think it is an exciting industry and has a lot of up-side potential,” Mr Fogarty said.

Mr Fogarty said negotiations for the purchase took a long time because the Goulds were sensitive about who they sold their property to and wanted their son to remain involved.

“He [Ben] was selected as one of the up-and-coming young winemakers, and he will have good back-up from Millbrook.”

“He has come a long way and we want to continue that improvement.”

Mr Fogarty said he wanted Deep Woods to produce stand out wines, particularly in the cabernet and chardonnay varieties.