Fogarty takes gold medal

Entrepreneur Peter Fogarty’s wine business has become Western Australia’s biggest producer, leapfrogging Accolade Wines to put a locally owned company at the head of table for the first time since 2009.

The rise to the top of Fogarty Wine Group, which produced 6 million litres in the 2017 vintage (up around 3 per cent on the previous year), has taken 21 years since the business’s founding at the Millbrook Winery in Jarrahdale.

Since then, production growth and key acquisitions such Deep Woods and Smithbrook have boosted the business, in which Mr Fogarty has been more closely involved in recent years than the early days when he ran ticketing technology group ERG.

Fogarty Wine Group’s growth reflects a broader shake-up of the local scene during the past 10 years, a period of some difficulty for many after significant growth and corporate activity in the late 1990s and early 2000s.

The combined output of WA’s elite group of top 10 producers was 26.3 million litres for the 2017 vintage, about 5 per cent less than the top 10 made a decade earlier.

Evans & Tate headed the Business News Wineries list in 2007, with the former Swan Valley producer having undergone a breathtaking acquisition spree to become the nation’s seventh biggest producer. Its WA production was a small part of its 31 million litres output, but was still substantial, estimated to be around 7.5 million litres.

A wine glut undid that growth story and Evans & Tate exists only as a brand these days. Fogarty Wine Group owns a 10,000-tonne contract winemaking facility that was once at the heart of Evans & Tate’s WA operations.

However, it is not just at the very top that the wine landscape has changed.

The state’s second biggest winemaker in 2007, Houghton, its fourth (Goundrey), and eighth (Amberley) are now part of Accolade, an Australia-based, private equity-owned player that has resulted from mergers and demergers that at one stage placed their ownership as part of the world’s biggest wine group – Constellation, a multinational based in Canada. In essence, it is the business once known as BRL Hardy with some additional brands.

At fifth this year, Ferngrove Wines sits further down the list than it did a decade ago when it was third. However, its production is about 40 per cent of its former output of 3.5 million litres. Now Chinese owned, Ferngrove was one of few successful survivors from the various wineries that arose from tax-effective investment schemes.

By contrast, another tax-driven company, Palandri Wines, was ranked fifth in 2007, a moment in time between its delisting from London’s Alternative Investment Market and an attempt to float on the ASX that ended when the company failed in 2008. It is now owned by Chinese interests, which last year cut staff as the business sought to refocus on a lower cost model for the Chinese market. It is unclear what Palandri’s production levels were in 2017, if any, but Business News understands the winery has been operating with a skeleton staff since the 2016 vintage was completed.

Howard Park Wines, which was sixth in 2007, is now in third place and operating as Burch Family Wines, a name change that reflected the owner’s wider portfolio, of which the Denmark-originated Howard Park remains at the core.

Treasury Wines Estates is one that has emerged from another demerger process. It was once the wine division of global beverage group Foster’s, which had earlier acquired Australian wine giant Southcorp. Its key holdings in WA is Devil’s Lair, a wine business started in the mid-1980s by Phil Sexton, who sold out in 1996 along with others linked to Matilda Bay Brewing and later Little Creatures.

Vasse Felix is one of the rare players in this top league in WA to have remained stable in ownership, rank and production levels. It held seventh in 2007 and remains in that place, even though output has dropped about 10 per cent in that period. Paul Holmes a Court bought out the rest of his family in 2008.

Rounding out the top 10 for 2007 were two family-owned wineries. Plantagenet Wines is owned by the nation’s oldest family business, Lionel Samson Group, a Fremantle-based conglomerate that has businesses in transport and packaging, as well as wine, production of which is one quarter of the volumes of a decade ago.

After a dramatic expansion in early 2000s, Barwick Wines was rebranded as Latitude 34 Wine Co in 2012. It sits just outside the top 10 in terms of 2017 production levels, making about two thirds of what it did 10 years ago.

New and old players feature this year. Established in 2003, Calneggia Family Vineyards was has a portfolio of assets put together by long-term viticultural and wine sector player Mike Calneggia, Alkoomi was established by Merv Lange in 1971 and is now owned by his daughter, Sandra Hallett. In its 40^th year, Xanadu was an established second-generation winemaker owned by the Lagan family but corporatisation, including and ASX-listing and expansion via MIS vineyards, failed and the assets were acquired by the Rathbone family from Melbourne.