Insolvency practitioners have taken control of Margaret River wine producer Tate Wine, the latest local alcoholic beverage maker to buckle under industry headwinds.
Receivers from FTI Consulting have assumed control of Tate Wine’s business, operations, and assets, including products from the brands Franklin Tate Estates, Tatelbaum, Origin of Now, and Miles From Nowhere.
FTI receivers Daniel Woodhouse, Hayden White and Antonetta Carroll were appointed by creditor Westpac, immediately after Cor Cordis administrators were voluntarily called in on November 7.
The practitioners are all working with stakeholders and the business' management on an assessment of the financial position of the entities under the group, which are understood to have debts in the tens of millions of dollars.
The entities under FTI's control are Grape Expectations Vintners (GEV), Grape Expectations Enterprises (GEE) and Grape Expectations Trust, while the administrators are running a ruler over GEV and GEE.
The group trades under the name Tate Wine.
“The Tate Wines brands are established brands in the marketplace,” FTI's Mr Woodhouse said.
“However, it is well known that the Australian wine industry is struggling from the impacts of oversupply at present.
“These are some of the factors that we will be considering as we determine the best course of action to maximise returns to creditors.”
Cor Cordis' Jeremy Nipps and Thomas Birch are working with the receivers and the business' senior management on that assessment of the business, which could culminate in a recapitalisation, partnership or sale.
The administrators' appointment forms part of a broader restructuring process, Cor Cordis said.
“Our immediate focus is to undertake a detailed review of the companies’ affairs while supporting the receivers and manager and senior management in identifying the best possible outcome for employees, creditors and customers," Mr Birch said.
The business owns and leases vineyards in the Margaret River region, one of which is believed to be leased from a company linked to Hong Kong’s richest person.
The first meeting of creditors will take place on November 19.
History
Tate Wine founder and owner Franklin Tate was the former executive chair of Evans & Tate, a second generation wine maker which he listed on the ASX in 1999 and ran until 2005. He remained a director until 2007.
Under his management, Evans & Tate grew via acquisition to be a major national player by volume. In 2002, during a time of expansion across the sector, Evans & Tate acquired the assets of troubled east coast producer Cranswick Premium Wines.
At the time Evans & Tate's crush was about 8,000 tonnes compared to Cranswick's 40,000 tonnes a year capacity, much of it having been exported.
However, the boom times in wine were soon over and period of oversupply, both nationally and globally, meant the heavily indebted Evans & Tate sustained big losses.
Efforts to sell assets and find a savior via merger failed in 2007 when the business went into receivership and was eventually taken over by McWilliam's Wines and dismembered.
Mr Tate re-emerged with his own private wine business, importing premium labels from overseas, with Australian Securities and Investment Commission records showing that Great Expectations Vintners, the company behind Tate Wines, was registered in 2006.
In a 2008 interview in Business News it was reported Mr Tate's private interests included a lease of two of the Evans & Tate vineyards, which were used to produce his own boutique wine range, Miles From Nowhere.
Property records show Mr and Mrs Tate own an 80-hectare property just north of the Cowaramup townsite which has extensive vineyards and a dam.
They have owned the site since 2001 and its geographic coordinates are used in marketing material for the Tate Wines’ brand Origin of Now.
In 2020 they sold two vineyard properties across 127ha of land known as Alexander’s Vineyard on Gale Road east of Metricup for $6.1 million, having held the land since 2001.
The buyer of that land was Belvino Investments, a part of CK Hutchison Holdings which is controlled by Hong Kong’s richest person Li Ka-shing. In 2023, Business News reported that Tate Wines had leased back that vineyard as well as other property owned by Belvino's interests.
Headwinds
Ongoing oversupply challenges continue to put stress the state’s wineries, despite eased trade tensions with China since it lifted its tariff on Australian wine in early 2024.
Those eased trade tensions largely resulted in a 13 per cent uptick in the value of Australian wine exports to $2.48 billion in the year to June 30, according to Wine Australia.
Downwards alcohol consumption trends in key export markets such as the UK, US and Germany have also put pressure on the demand side of the industry.
Tate Wine is the latest in a string of insolvencies in the alcoholic beverage producing scene in Western Australia, although the majority have been distillers and brewers.
Distiller Old Young’s was a notable business to run into trouble against industry headwinds but has since exited administration after being bought back by directors.
Fox Friday Brewing, Republic of Fremantle, Running with Thieves, Sound Brewing Co and Golden West Brewing Co are among those to call in insolvency experts.
All of those businesses have either been restructured or sold and continue to trade under new or existing branding, signaling buyer interest in the local market.
Earlier this year, Bridgelands Estate in Margaret River was sold to a NSW investor for $7.3 million, being among the highest sale prices for a winery or vineyard asset to change hands in recent years.
Some of the WA’s wealthiest have interested in wineries around the south of the state, including Rich 100 members Paul Holmes a Court, Allan Erceg, and the Prendivilles.
At least 23 of the Rich 100 have interests in agribusiness, spanning pastoral portfolios, plantation timber, vineyards, seafood merchants, horticulture, and broadacre cropping.
