Buying back the vineyards

Toward the end of 1987 South Australia bought back two big slices of its wine farms. Wild rumours abounded for months preceding the Hardys purchase of the Stanley Wine company and a management buyout of Orlando wines. Most of these concerned likely targets of the Penfolds group with its publicly stated objective of controlling 30 per cent of Australia’s wine industry.

While most pundits saw Seppelts as Penfolds’ object of desire, by late 1987 the rumour mill also had Lindemans (owned by Phillip Morris) on the market, Stanley for sale, and Orlando a profitable but dispensable possession of Reckitt and Coleman U.K. One rumour even had Seppelts buying Orlando, with both companies to go to Penfolds immediately after.

Well, Stanley was for sale and the successful bidder was indeed Thomas Hardy and Son (there were other contenders). The purchase marks an enormous change in direction for Hardys. Suddenly the old family company must adjust from being a middle-sized producer specialising in the premium bottled end of the market to being second- or third-biggest in Australia (depending on whose estimates you believe) with a significant stake, through Stanley’s successful wine cask, in the low-price bulk end.

Mike Von Berg, Hardy’s marketing man, says the decision to expand was made in October and quickly stitched together as H. J. Heinz’s chief executive officer Mr Tony O’Reilly was in Australia at the time. The decision was prompted by a fear of being squeezed by smaller specialist producers below and expanding large ones above. An added bonus for Hardys is the 300 hectares of premium vineyard sites in the Clare Valley. This reduces their almost total reliance for premium whites on their Padthaway vineyard and will allow expansion of exports and a revival of the once-famous but now-faltering Stanley Clare labels.

There are good and bad points for wine drinkers in all this. On the down side, we are certain to see much higher prices for Stanley bottled wines as marketing becomes more purposeful under Hardys. Stanley’s weakness in the market over the past few years has led to considerable quantities of good wine being dumped at wonderfully low prices. On the positive side, Hardys report that Stanley’s Clare Vineyards are badly run down. These will quickly be restored to order so that we will once again be able to enjoy the quite remarkable Rhine Rieslings and deeply coloured reds that the Clare is capable of making.

Shortly after Hardy’s October decision, the man responsible for Mortein’s ‘there’s a blowie on the Moet’ commercial, Mr Chris Roberts, led a successful management and investor group purchase of Orlando Wines from Reckitt and Coleman.

Mr Roberts, a former managing director of Samuel Taylor (another Reckitt and Coleman company), joined with Orlando’s chief winemaker, Barossa-based Robin Day, and two Orlando central office staff, Stephen Couche and Perry Gunner, in forming a buying group under the advice of merchant bank Dominguez Barry Samuel Montagu and with the help of the Department of State Development.

The deal was nutted out between November 19 and 24, although not announced until January 5. Mr Roberts becomes managing director and, with his three Orlando colleagues, has equity in the new business. Other shareholders are DBSM and an as-yet unidentified group of South Australian institutions.

The new owners of Orlando face a problem quite the opposite to the one facing Mike Von Berg at Hardys following the Stanley acquisition. Hardys have to reshape a company run completely off the rails; Mr Roberts and Co take over one which competes successfully and profitably in every segment of the market.

That may sound like a good position to be in. But Mr Roberts takes over the position of Mr Gunther Prass, whose track record looks almost too good to be true. Mr Prass was told of the management-led buyout in November after the event. When Mr Roberts takes over as managing director, Gunther Prass becomes chairman.

Mr Prass, born to a winemaking family in Germany, served as a cadet officer in the German Navy before returning to winemaking when dreams of a career in the merchant navy were sunk (literally). Migrating to Australia, he was responsible for introducing many Australians to wine drinking with Barossa Pearl. He never looked back.

First published 17 January 1988 in The Canberra Times

Copyright © Chris Shanahan 1988 and 2026