About a year after putting historic Seppeltsfield on the market, Foster’s last week announced its sale to a group of investors led by little-known Clare Valley based Kilikanoon Wines.
Kilikanoon Managing Director, Nathan Waks, says that the purchase is being executed through The Seppeltsfield Estate Trust. The trust’s owners include Kilikanoon Wines, Janet Holmes a’Court, Greg Paramor and Kilikanoon’s major shareholders, Nathan Waks and Bruce Baudinet.
In a complex deal the Trust will buy the entire property and fortified wine stocks but will lease 108-hectares of vines back to Foster’s and enter into a long-term agreement with Foster’s to manage the fortified stocks.
The 185-hectare property is a treasury of Barossa winemaking history dating to the early 1850s. Visitors to the site drive through an avenue of date palms – established to keep workers employed during the depression – to the complex of cellars, dwellings and National Trust listed Seppelt family homestead.
Five generations of the Seppelt family established this sprawling village before the company floated in 1970 and subsequently passed, intact, through successive ownerships by South Australian Brewing Holdings, Adsteam, Southcorp and Fosters.
Perhaps the most direct links to the past, with continuing relevance to wine today, are the 108-hectares of vines and around nine million litres of fortified wine stored in an estimated thirty thousand barrels – each in need of TLC.
With the market for fortified wine all but dead, the question, until now, was who will take on such a colossal volume of high maintenance wine, even if it is some of the best material in the world?
To Foster’s credit, it steadfastly avoided a carve up of the property or a fire sale of the unique fortified stocks. Those thirty thousand barrels carry wines dating back to 1878 and underpin the magnificent Seppeltsfield fortified range.
But who would be interested in continuing to make these wines, finding a market for them and for looking after a heritage property with a reported $1-million a year maintenance bill?
It was never likely to be a large public company – Foster’s had already admitted that this type of niche operation didn’t fit its global plans. As well, Seppeltsfield held strategic assets that Foster’s needed to access in the future. So the buyer had to have capital, a vision for the property and its fortified wine and a willingness to meet Foster’s needs.
Foster’s wanted continued access to grapes from the Seppeltsfield vineyard – particularly to ‘icon’ quality shiraz – company jargon for material good enough for flagship Penfolds reds, Grange and RWT Shiraz.
Seppeltsfield also holds within its complex soleras (a fractional blending system for ageing fortified wines) material used in Penfolds products, including Grandfather and Great Grandfather ports.
The deal cobbled together by the Kilikanoon team sees the 108-hectare vineyard leased back to Foster’s. Foster’s will maintain the vineyard, keep the grapes that it needs for the Penfolds brand and sell some of the material, including the fortified varieties, touriga and palomino, to the new Seppeltsfield owners.
Foster’s fortified winemaker, James Godfrey, will continue to maintain the soleras and to make fortified wines on site for both Foster’s and Seppeltsfield. And the Kilikanoon press release says that ‘The Seppeltsfield Trust will employ apprentice and junior winemakers to learn the specialist art of fortified winemaking from one of the world’s finest exponents’.
And who are the new owners? Kevin Mitchell founded Kilikanoon Wines in the Clare Valley about ten years ago. In 2000, at Kevin’s request, a group of investors, including Nathan Waks and Bruce Baudinet, became involved and expanded the company’s interest beyond the Clare Valley.
Nathan Waks now heads an export-focused business (‘our exports are bigger than our domestic sales’, says Nathan) with vineyards in Clare, Barossa, McLaren Vale and the Southern Flinders Ranges. It’s a business that’s ‘grown organically and quickly’ says Waks.
With solid financial support Waks plans to ‘bring the village back to life around the Seppeltsfield fortified brand’. He views the fortifieds as a niche product and a good fit with Kilikanoon’s boutique, hand-sell operation.
He believes that Australia can learn to love top-end fortifieds consumed in small quantities with sympathetic food. And he sees tremendous potential in export markets where the wines, with the exception of muscats and tokays from Rutherglen, are virtually unknown.
Although Seppeltsfield remains one of the most visited sites in the Barossa, Waks observes that ‘there’s not much for them to do’ – hence a plan to ‘revive the village in all its facets’.
Under the Seppelt family the property produced not just wine but vinegar, wine barrels, smoked meats and raspberry cordial. Under the new owners these activities will recommence – and olive oil production could be part of it.
Already under Foster’s the Seppeltsfield fortifieds have a regional focus and the European wine names ‘sherry’ and ‘port’ have been dropped. The fino, amontillado, oloroso and tawny styles all focus on Barossa Valley origins and the tokays and muscats on Rutherglen.
The new owners intend to maintain this regional focus. And, for the most part, wines offered at Seppeltsfield will be estate grown and made. The wine plan includes a recommissioning by next vintage of the historic 1880s gravity-fed winery – sitting unused but in good nick since the 1980s.
And there’ll be music and dancing, too. The press release says, ‘The well-known musical careers of Kilikanoon partners, violinist John Harding and cellist Nathan Waks will ensure that the arts take centre stage in the future with a Seppeltsfield Festival high on the agenda’.
Copyright © Chris Shanahan 2007