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Watershed on track to be third largest in its region

THIS month Watershed Premium Wines begins the next stage of ambitious expansion plans aimed at making it the third biggest premium wine producer in Margaret River.

The recent acquisition of 4.2 hectares of land with vines planted in 1995 and its vine planting on 33.3 hectares planned for this August will expand the winery’s capacity to half of its intended size.

Watershed managing director Geoff Barrett said the winery wanted 240 hectares of planted vines enabling it to crush 2,400 tonnes of fruit within six years.

“We want to reach 600 acres and be the third largest producer. That will put us behind Evans and Tate and Vasse Felix,” he said.

Watershed will launch a prospectus later this month to raise $7 million to further the second-stage expansion.

Since its launch in 2001 the company has raised $21.6 million and anticipates reaching full production capacity by 2010.

Mr Barrett said the company was primarily interested in exporting its wine.

“We anticipate that 60 per cent to 70 per cent of our wines will be sold offshore,” he said.

Mr Barrett said while there was an oversupply of cabernet and low-grade fruit there was an under supply of chardonnay and there was a growing demand for quality wines.

“Even in the US downturn there was a 10 per cent growth for premium wines,” he said.

Mr Barrett said Watershed had always intended to produce large volumes of wine in order to penetrate international markets.

“Margaret River represents 2 per cent of the grape crush nationally. In excess of 20 per cent of premium wines comes from Margaret River,” he said.

“In the context of Margaret River there is a lack of size in the wineries. In a short period of time we have become one of the top 10 producers.

“The smaller wineries don’t have the dollars and cents to enable them to market the wine internationally.”

Watershed completed a $2.5 million cellar door and restaurant facility late last year and will expand its production facility to cope with a larger crush this vintage.

Since it commenced operating the winery has sold its products into five markets – America, the UK, The Netherlands, Singapore, and Switzerland.

“We are also about to sign a distribution deal for Japan and Brazil,” Mr Barrett said.

Mr Barrett said the domestic market was also opening up to the new wine label.

“Seven hundred outlets have stocked our wine in the last seven months,” he said.

“We do things a bit differently to other wineries. We don’t employ agents domestically – we have our own sales staff.”

Mr Barrett said while the winery was producing two red varietals and two white varietals, it would expand its products over the coming years.

Watershed Premium Wines range in price from $17 to $30.

“We’ve selected price points where our wine will over deliver,” Mr Barrett said.

 

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