Mudgee, New South Wales, a new centre for wine investment

In the mid 1980s Mudgee, on the western slopes of the Great Divide 300km north west of Sydney, had a little over 400 hectares of vines, a cluster of smallish producers and the middle-sized Montrose Winery. Today it is undergoing an explosion of vineyard development destined to push production beyond the combined output of the lower and upper Hunter Valley and make it one of the most significant quality-wine production areas in Australia.

Developments already underway in Mudgee should soon push annual grape production to around 25,000 tonnes (1.75million dozen 750ml bottles) from the current level of about 6,500 tonnes (455,000 dozen 750ml bottles) according to resident Southcorp Wines viticulturist Bruce Brown.

Brian Sainty, head of a $30million vineyard expansion by privately owned Mudgee Vineyards, says the region has great allure for large wine makers and vineyard investors because it can reliably deliver what the market wants.

Sainty says large wine makers are after high-quality grapes from a wide variety of soils and climates and are prepared to pay a premium over the non-descript product sourced from the very hot irrigated regions. Specific demand for Mudgee grapes far outstrips supply.

It seems the region, at 450 metres above sea level and well inland has the ability to ripen biggish, high-quality crops almost every year. The altitude and distance from the sea temper what might be an otherwise too-hot climate. Yet it not so high that frost is a major problem as it can be further south or further up, and hail, the other great crop stripper, is seldom a problem.

Denis Power, Chief Executive of Rothbury Estate, which leases 100 hectares of vines in Mudgee, backs Brian Sainty’s view. He says quality is not only reliable but very high, especially for reds which constitute 85 per cent of Rothbury’s Mudgee crop.

But he says Mudgee’s allure to wine makers is not shared by consumers. The name seems to be the kiss of death. “The name repels consumers, it’s a positive turn off”, Power told me. But he couldn’t say whether it was the name itself or past associations with Mudgee Mud — a much-reviled beer thrust on our thirsty return soldiers after world war two.

Nevertheless, Rothbury maintains a cellar door presence at its Augustine winery in Mudgee and plans the release of flagship Mudgee reds under the Augustine label. I can vouch for the quality from several tastings of various Mudgee reds at Rothbury’s Hunter winery.

Rosemount chief, Chris Hancock, believes Mudgee has been “seriously under marketed” and wonders why the area’s largest producer, Montrose Winery with 220 hectares of vines (owned by Orlando Wyndham) has done so little to market Mudgee.

Rosemount recently acquired two properties just down the road from Montrose and plans on extending vineyards from the current 65 hectares to 240. Hancock says the Rosemount focus will be squarely on red wines with regional promotion a key part of their effort.

Mudgee’s small makers deserve credit for what little consumer recognition exists for Mudgee. One of those, Ian MacRae of Miramar, owner of 24 hectares of vines, is excited by all the new activity and sees it as a great boost for the district.

What is happening in Mudgee reflects a growing trend for the wine industry to attract substantial capital investment from outside the industry. The $30million Mudgee Vineyards Pty Ltd investment comes from grazing interests and other major investors have likewise seen a great opportunity in wine.

The Darwin-based Paspaley family, is plowing some of its pearling fortune into the land, including a 120 hectare Mudgee Vineyard, and Andrew Harris, a Moree cotton grower, sees a great future in wine production and export. His family is now establishing 90 hectares of vineyards in Mudgee and is investing, too, in a winery and bottling plant.

If Mudgee has become an important hub for the new wave of investment, it is not alone in NSW. I have already covered in this column substantial investments and growth in the Young and Cowra districts. But it seems would-be vineyard investors are combing the western slopes between Mudgee and Harden in search of good sites.

Substantial developments are already underway in Molong and Denis Power tells me he’s involved in a 400 hectare planting at Forbes, about 100 kilometres downstream of Cowra on the Lachlan River.

The new investors appear to be hard-nosed business people with long-term market-orientated strategies. Whatever their motives, Australia’s grape-growing scene is undergoing a revolution that is fairly rapidly lifting the average quality of the wines we drink. More on the Mudgee phenomena next week.

March 24th, 1996

Despite Mudgee’s imminent leap to the big time described here last week, its wine making history dates back to 1858 when Adam Roth established vines at what is now Craigmoor. It is believed that some of today’s important chardonnay plantings, including the Tyrrell Vineyards in the Hunter, are direct descendants of Roth’s vines.

Still, the 13 wineries that existed in Mudgee by the 18880s were small change compared to the broad acres appearing there now. And the sudden leap by Mudgee is all the more remarkable when we consider that by 1964 the area was down to one winery.

Now, its production seems set to overtake that of the Hunter Valley. Indeed, its production by the turn of the century may considerably outstrip that of all Western Australia.

Mudgee’s revival began when Alf Kurz established Mudgee Wines in 1964. In the following decade other boutique wineries set up and developed a following thanks to the likes of Gil Wahlquist at Botobolar with his idiosyncratic, organically-produced wines; Huntington Estate’s Bob Roberts who single handedly proved just how good Mudgee reds could be; Alf Kurz who did so much in establishing chardonnay; and Ian McRae of Miramar who, since the late 1970s, has consistently made completely reliable and often exciting wines.

Mudgee moved up a gear in 1974 with the establishment of Montrose winery by two Italian engineers, Carlo Salteri and Franco Belgiorno-Nettis. They established a large modern winery, installed Italian wine maker Carlo Corino and even included the native Italian grape varieties, nebbiolo, barbera and sangiovese, in the vineyard.

Montrose became the largest in the area and since its acquisition in the mid 1980s by Orlando-Wyndham has maintained that status (until now) with current vineyard holdings of around 220 hectares.

However, its holdings are about to be overtaken as newcomer to the district, Rosemount Wines, pushes its plantings to 240 hectares and Mudgee Vineyards Pty Ltd plants its first of three 200 hectare plots, 20 kilometres north of Mudgee.

Brian Sainty, head of the Mudgee Vineyards Pty Ltd project, says the owners, Mudgee-based graziers, were looking for new agricultural investments and studied many possibilities including olives, citrus fruit and vegetables. But they were drawn to grapes because “historically and in the future Mudgee had a real strength in quality wine production and there was a shortage from the area.”

Talks with major wineries encouraged the company to continue with the idea. “The majors were bullish about Mudgee particularly about its potential for high quality reds — shiraz and cabernet — and full-bodied whites made from chardonnay, sauvignon blanc and semillon”, Sainty told me.

Mudgee Vineyards Pty Ltd was formed after extensive research revealed a market for premium grape varieties grown under a wide variety of conditions. Sainty says “the approach was the antithesis to traditional Australian agricultural pursuits where someone grows something, takes it to the market and says ‘here it is‘. What we’ve done is gone to the big makers, found out what they wanted and built our plans according to those needs. It is very much market driven.”

And we’re talking big bikkies! Over the next five years Mudgee Vineyards plans on investing about $30 million dollars (not including land value) in 1000 hectares of vineyards. Sainty says that the first three 200 hectare plots will be in the Mudgee district, but that the final two will be somewhere between Mudgee and Harden on the western slopes of the great divide.

When I visited Mudgee last week, “Tullamour”, a 200-hectare paddock was being preened for planting in September/October. Sainty says the soil has been analysed to a depth of 2 metres on a 75 metre by 100-metre grid. The soil profile “helps us decide the varieties to be planted, vine spacing, trellis type and is also the basis of our irrigation design including dripper spacing”, according to Sainty.

Tullamour is designed very much with water and soil conservation in mind. Vines need water. But gone are the profligate bad old days of flood irrigation and overhead sprinklers. Computer controlled moisture probes now measure water loss and determine how much needs to be trickled into the root zone for vine health and, ultimately, the right yield of the right quality grapes.

Wine makers look to Mudgee not for massive yields but for a certain quality. The challenge for grape growers is to produce the desired quality at a profit through scientific, sustainable vineyard management — a risky process that includes a business plan, rigorous site selection, large capital inputs and a long-term view.

The unprecedented large-scale investments in Mudgee and other points on New South Wales‘ southwestern slopes are changing Australia’s wine map rapidly. Unfortunately, the Canberra district seems to have been by-passed as a little too risky.

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