In Denmark, Western Australia, we’re heading out to vineyards thinking shiraz and riesling – the highlights of thirty years’ tasting from the vast Great Southern region. Chardonnay and pinot noir barely blip on our radar; and even cabernet sauvignon’s low on the list, though we’ve tried a few beauties from the area. But our first stop smashes those preconceptions.

Just five minutes drive north of town, Howard Park, founded 1986, lies a little short of the 35^th parallel – several degrees north of Australia’s cool chardonnay and pinot noir hot spots like the Yarra Valley, Mornington Peninsula and Tasmania.

We ease in, tasting riesling with winemaker Andrew Milbourne – Canberra raised and, for a time, a colleague of Alex McKay at Kamberra Winery. The 2009 Great Southern pleases for its predictable lemony brightness and delicacy. Our preconceptions hold. But the soon-to-be released 2010s set a subtle new course – sub-regional styles.

The first, from Porongurup (a small range of hills between Denmark and Albany, about an hour’s drive north east of Howard Park) is floral and lime-like, with a taut, delicate-but-keen, lingering acidity. The subtly different 2010 Great Southern (mainly from the Mount Barker sub-region, 40 minutes north, north east of the winery) seems slightly fuller and rounder, but still delicate. All three are first-class rieslings.

We move on to Howard Park Western Australian Chardonnay 2007, a predominantly Great Southern wine with a component from Margaret River (a degree further north and a couple of hundred kilometres to the west). This is very well made barrel-fermented chardonnay, lively, fresh, varietal and richly textured, with noticeable oak flavour. We’re giving this a silver medal score – a way above average wine, but not in the top ranks.

Just before our prejudice sets, Milbourne comments that after 2007 Howard Park’s chardonnay winemaking style changed. “We moved to hand picking and sorting and whole-bunch pressing to barrels. We introduced a lot of wild ferment, and it’s now 100 per cent”. The changes extended to reds, too, with a basket press and open fermenters for pinot noir and hand sorting of bunches even for machine-harvested reds.

The changes, he says, flowed from a partnership between Jeff Burch, Howard Park owner, and Montreal born Pascal Marchand, a winemaker in France’s Burgundy region for almost thirty years.

We’d read about but hadn’t tasted, Marchand and Burch’s wines, made in Western Australia by Burch and in Burgundy by Marchand. How good could they really be?

Well, the 2009 chardonnay, sourced from a cool, south-facing slope in Porongurup, killed our preconceptions stone, cold dead. What a beautiful wine – so delicate but powerful and perfectly balanced.

The equally exciting Mount Barrow Pinot Noir 2009, comes from a ridge-top site at Mount Barker.

What makes the wines so good? Site selection and vineyard management seems to be a key, giving Burch very high quality grapes to work with. After that it’s attention to detail: picking at the right moment, handling and transporting the grapes protectively and hand sorting to remove damaged berries and leaves.

For delicacy and purity, the chardonnay relies on gentle, whole-bunch pressing and a short period of settling before being racked to oak barrels for a spontaneous primary fermentation. Half of the wine underwent a natural malolactic fermentation (this converts malic acid to lactic acid, softening the wine and adding complexity to texture and flavour).

The chardonnay matures on yeast lees in barrel for 11 months, with individual barrels selected for the final blend.

To build a fine, silky tannin structure, without over extraction, the pinot undergoes maceration on skins (source of all the colour and tannin) for five days before and for several weeks after fermentation in small open vats (one to four tonnes capacity). The makers hand plunge and pump juice over the skins from two to four times daily.

The wine matures in oak barrels (a mix of new and old) for about seven months before blending of selected barrels.

A brief, single tasting of these wines, though, isn’t enough to place them precisely in Australia’s pinot noir and chardonnay hierarchies. But we can say with certainty that they’re worthy of comparison with the best, and we intend to do so in the coming years. A good sign is that we’re busting to buy a few bottles and put them to the full-bottle test (will they hold our interest from first drop to last?).

Andrew Milbourne’s final nudge to our preconceptions is the flagship Howard Park Abercrombie Cabernet Sauvignon 2008 ($85). This is Howard Park’s top cabernet, blended from the best material from their extensive holdings in Margaret River and the Great Southern region.

It’s an outstanding, powerful but elegant wine sourced principally from an old vineyard at nearby Mount Barker – with only a small proportion from Margaret River, Western Australia’s premier cabernet region.

The dominance of Mount Barker material in the blend seems fitting, if challenging. We recall our first visit to Denmark many years ago with John Wade, a founder of Howard Park. Before moving to Denmark, John had made one of the greatest Australian cabernets of all on the other side of the continent – the still magnificent, Wynns Coonawarra Estate John Riddoch Cabernet Sauvignon 1982.

Copyright © Chris Shanahan 2010

In 1987 Peter Lehmann, with winemaker Andrew Wigan, produced the first Peter Lehmann Stonewell Shiraz (current release 2005 vintage about $90), a magnificent but comparative newcomer to the blue-chip wine ranks. Behind it lies an extraordinary winemaking and viticultural heritage, reaching across generations.

Fortunately the heritage survived traumatic changes of company ownership over the years, culminating in a friendly buyout, endorsed by Peter Lehmann, by Swiss based Hess Group in 2003.

The central character behind Stonewell shiraz is Peter Lehmann, son of a Barossa Lutheran pastor. The viticultural heritage is the shiraz grape — a great survivor of the Barossa Valley’s 160-year winemaking history. And the winemaking heritage stretches each side of Peter: back to his predecessors at Yalumba and Saltram and forward to his winemaking successor, Andrew Wigan.

Peter once told me he saw Stonewell as a “continuation of the Mamre Brook dream — aided and abetted by Andrew Wigan”.

Mamre Brook was Saltram’s flagship Barossa red, created by Peter in 1963, four years after he took over winemaking from Bryan Dolan at Saltram (on the outskirts of Angaston) in 1959.

Bryan made wine at Saltram from 1949 to 1959, for his first four years working alongside Fred Ludlow. Fred had been there since 1893, making wine for the last fifteen years of a remarkable sixty years’ service.

Peter had trained as a winemaker at Yalumba (on the other side of Angaston from Saltram) in an era when fortified wines reigned. However, both Yalumba and Saltram had long-established traditions of making sturdy Barossa reds capable of ageing gracefully for decades (an art that almost died during the eighties).

In early 1999 I was privileged to taste with Peter Lehmann, Bryan Dolan (Bryan died only a few months later) and Bryan’s son Nigel (winemaker at a rejuvenated Saltram at the time and now with Pernod Ricard-owned Jacob’s Creek) a glorious line up of aged reds made by Fred Ludlow, Bryan and Peter from 1946 onwards.

The very first wine of the tasting, a tawny-rimmed 1946 Saltram Dry Red combined ancient, earthy, old-furniture smells with big, mellow, sweet-fruited, autumn-leaf flavours.

The standard held though vintages 1948, 1950, 1952 with a tremendous jump to a marvellous 1954 Saltram Selected Vintage Claret Bin 5 and even greater 1954 Leo Buring Vintage Claret (made by Saltram).

Other highlights were: 1957 Saltram Shiraz Bin 18; 1960 Saltram Selected Vintage Burgundy Bin 28; 1961 Saltram Dry Red Shiraz; 1963 Saltram Claret Bin 36; 1963 Stonyfell Angaston Burgundy (Barossa Shiraz); 1964, 1967, 1972, 1978 Mamre Brook Cabernet Shiraz; 1964 Saltram Shiraz; 1971 Saltram Selected Vintage Claret Bin 71/86; and 1973 Saltram Show Dry Red (first use of new oak at the winery).

Saltram lost this extraordinary red-wine tradition with the 1977 decision by its owner, Dalgety, not to buy grapes from their growers for the 1978 vintage. Peter refused to abandon the growers and in a gutsy effort, with support from his wife Margaret, good mate Robert Hesketh and others, established Masterson Wines to buy grapes and make wines under contract at Saltram in vintages 1978 and 1979.

In 1980, when new owners Seagram banned contract making at Saltram, Peter established a new winery at Tanunda. Masterson Wines became Barossa Vignerons Pty Ltd and, later Peter Lehmann’s Wines Pty Ltd after Cerebos took a controlling interest. In 1987, Adelaide based McLeod’s acquired the majority of Lehmann, at the same time folding Hoffmans and Basedows into it. Peter and Margaret Lehmann, via a family trust, held eight per cent of the new entity.

Thus, in 1993 Margaret and Peter became a vocal minority when McLeod’s wanted out. They were backed into a corner as they could sell to no one but the Lehmann’s. Once again, the family jewels (and Peter’s super money) were on the line as the Lehmann’s sought help to finance the deal. The company was listed on the ASX in 1993, $5.8 million oversubscribed in just three weeks.

During a hostile bid by British giant Allied Domecq in 2003, Lehmann refused to sell his block of shares, instead engineering the friendly buyout by Hess Group. Lehmann believed this option offered greater security for the Barossa grape growers behind the Lehmann brand.

When Peter left Saltram, winemaker Andrew Wigan stayed with him, aiding and abetting the development of Stonewell shiraz.

The first two vintages, 1987 and 1988, says Andrew, were simply the best vat of shiraz of the vintage put into new American oak puncheons for maturation.

From 1989, selection of Stonewell began in the vineyard. Selected fruit parcels are now fermented separately, finish fermentation in barrel, and the final blend is made from only the best barrels.

Andrew says that about fourteen vineyards ranging from 35 years to 110 years of age might make it to the Stonewell blend. The ‘Stonewell’ vineyard at Marananga in the Western Barossa makes the grade every year. The 2005 vintage contains material from the Kabiminye, Koonunga and Stonewell subregions.

The wines have tended to become riper, but more finely structured over the years. In 1996 fine-grained French oak was introduced, making up about 10 per cent of oak used during maturation. By 1998 French oak was up to 70 per cent and in the 2005 vintage is at 90 per cent. But, as finer oak was introduced, Andrew opted for slightly riper shiraz, to make Stonewell more opulent with ripe, soft tannins.

Looking back over all the Stonewells from 1987 to the just-released 2005, we see a wonderfully generous, satisfying Barossa red that ages beautifully while revealing marked individual vintage characters.

This year the wonderful, complex Stonewell Shiraz 2005 ($90) comes to market with four other Lehmann Barossa wines from the outstanding 2005 vintage.

Eight Songs Shiraz 2005 ($40) presents a brighter, fragrant, less burly face of Barossa shiraz. It’s all French oak matured and just lovely to sip on now (but it’ll age well, too).

Peter Lehmann Mentor Barossa Cabernet Sauvignon 2005 ($40), reveals just how well this variety fares in good Barossa vintages. It’s a big wine, but there’s an appealing purity to its slightly minty varietal flavour and an elegance to its structure.

Lehmann’s Wigan Eden Valley Riesling 2005 (reviewed here last week) is a near perfect example of maturing Australian riesling, glorious to drink and highly distinctie.

And Margaret Semillon 2005 ($40 – named for Peter Lehmann’s wife), delivers a beautiful, distinctive drinking experience. Like the Wigan riesling, it’s maturing, but has years ahead of it, but offers a different spectrum of flavours – zesty and lemony with the intriguing undertone of honey and toast that comes with bottle age.

These are exceptional offerings from a team with deep roots in the Barossa Valley.

Copyright © Chris Shanahan 2010

On 21 July Foster’s Group Limited changed the name of its global wine business from Fosters Wine Estates to Treasury Wine Estates. The change followed Fosters decision in May to split its beer and wine divisions into two separate companies to be listed on the Australian Stock Exchange in 2011.

Despite the name change, the stench of failure hangs over Fosters wine assets. It’s a sad story, tragic for some participants, involving a near decade long destruction of wealth. On glug.com.au, David Farmer cites an estimate of around $8 billion to build Foster’s wine assets but a current value of just $2.5 billion.

Fosters moved into wine in 1996, acquiring Mildara Blass – a highly profitable business driven by the big volume Yellowglen, Jamiesons Run and Wolf Blass brands. Headed by Ray King, Mildara Blass was seen in the industry as a model for return on investment.

Ironically, at about the time of the Fosters acquisition, King detailed to a masters-of-wine gathering the wine industry’s history of dispersing wealth. It wouldn’t happen under King’s watch, but the same fate awaited Fosters.

In 1997 Fosters acquired Cellarmaster Wines, a highly successful, vertically integrated direct marketing business, based at Bondi Junction, with winemaking, packaging and distribution assets in the Barossa Valley.

Then in 2000 California’s Beringer Wine Estates joined Fosters wine business and the name changed to Beringer Blass Wine Estates (shortened in 2004 to Beringer Blass). By then the difficulty of running a wine business had become apparent. In the year to June 2004 the wine division returned just four per cent on its $4.4 billion of assets – compared to the beer division’s 25 per cent on $2.2 billion of assets.

But the wine headache was set to grow bigger, ultimately sweeping Chief Executive Trevor O’Hoy away.

As Foster’s ran into rough weather, another disaster had unfolded at Southcorp, owner of many of Australia’s greatest and oldest wine brands, including Wynns Coonawarra Estate, Penfolds, Seppelt, Lindemans, Leo Buring, Coldstream Hills and Devil’s Lair.

In 2001, the Oatley family engineered a merger of its highly successful Rosemount Estate business with the much larger Southcorp Wines. The Oatleys held a sufficiently large stake to control management, installing Keith Lambert, Bob Oatley’s son in law, as head. Catastrophe followed.

Poor management decisions saw market share decimated in the UK and Australia. And an unworkable arrangement saw John Duval, Southcorp chief winemaker, and Philip Shaw, Rosemount chief winemaker, appointed as joint chief winemaker. A holy trinity might work, but not an earthly duality. As the debacle unfolded both departed for their own reasons, making John Duval the first Grange maker not to see the job through to retirement.

In Australia, wine retailers large and small detested the merger and instantly changed their buying habits – much to the delight and profit of medium sized companies like McWilliams and De Bortoli.

No retailer likes to be controlled by a supplier. If, before the merger, purchases from Southcorp and Rosemount equalled, say, 50 per cent of a retailer’s total, after the merger, they’d likely fall to 30 per cent. The merged Southcorp-Rosemount learned the hard way that they were the tail, not the dog. And the big retailers would wag them, not the other way around. Lambert duly departed and John Ballard stepped in to repair the damage.

In 2005, before Ballard could complete the job, Fosters moved in, paying top dollar for Southcorp. Bob Oatley walked away with cash and the destruction of wealth gathered pace.

Fosters first major blunder after the acquisition was to funnel all sales across it vast beverage portfolio through a single sales force. Friends in the trade at the time said it was farcical. And the loss of market share experienced by the merged Southcorp-Rosemount was repeated by the merged Southcorp-Fosters.

After repeated write-downs and then a major review in 2009, Fosters structurally separated its wine and beer divisions. In May this year they went a step further, announcing the split into two listed companies.

This sets the scene for further shake-ups in the global wine and beer businesses. The beer business could easily be gobbled up by a larger player when the wine albatross is cut free. And it’s anybody’s guess as to where the wine business ends up. Will it prosper as a single entity? Or will it ultimately be carved up.

It’s a disparate group of brands, some of them now severely damaged. But there are some great gems with huge international potential, including Wynns and Penfolds. What a pair they’d make for the right private investor!

For the moment, though, there’s no talk of a carve-up. David Dearie, Foster’s wine boss for Australia and New Zealand, launching the new Treasury Wine Estates brand, said, “the new name and business identity reflect the wealth of treasured wine brands including global favourites Beringer, Matua Valley, Penfolds, Lindemans, Wolf Blass and Rosemount to regional labels such as Coldstream Hills, Devil’s Lair and T’Gallant”.

Dearie also talked of “a cultural change for of us working in the wine business as we return to a dedicated focus on viticulture and winemaking”.

This gets to the heart of great wine brands – the compelling stories of regions and vineyards and the people behind the wines. Marketers in large companies have largely failed at this, so we have reason to remain sceptical. As well, the treasury comes with dross as well as gold dust.

Separated from the brewery, Treasury Wine Estates will have to perform in its own right. Shareholders are unlikely to stomach more write-downs. And if there are any more, where will new capital come from? For the sake of our great old brands, let’s hope for success. But I suspect that would be more likely with a carve-up.

Copyright © Chris Shanahan 2010

There are changes afoot in the Canberra wine district, following the departure of two of the district’s most influential winemakers from Lake George Winery late last year. Nick O’Leary left the winery in winter 2009 and Alex McKay followed in December.

Part of the Lake George property is up for sale. And O’Leary and McKay are now making their wines separately – O’Leary at his in-law’s Affleck Vineyard and McKay at a leased winery near Murrumbateman.

The Karelas family bought Lake George Vineyard from founder Edgar Riek in 1998. At Edgar Riek’s urging, following Hardy’s departure from Canberra, Theo Karelas and his son Sam hired Riek, O’Leary and McKay to oversee a complete overhaul of the vineyard in 2007. McKay was to make the wines. And McKay and O’Leary had freedom to develop their own labels, Collector and Nick O’Leary.

Then in March 2008, the Karelas family acquired the adjoining Madew property including land, vineyards and a winery-, cellar-door-restaurant complex. McKay and O’Leary led a rejuvenation of the neglected vineyards and consolidated the winemaking equipment into the Madew cellar. The combined properties produced wines under the Lake George Winery label and the Madew name was dropped.

Speaking from overseas last week, Sam Karelas said he was selling Riek’s original Lake George property but would continue trading from the Madew property under the Lake George Winery name. He said he would continue to operate the restaurant.

Alex McKay said though he left Lake George half way through the growing season, he made two wines from the vineyard in 2010 – a tempranillo and riesling.

He says left Lake George because the winemaking obligation there had become a bit much with his Collector brand beginning to work well and demanding more attention.

In time for the 2010 vintage he arranged to lease a small winery owned by Vikki Fischer at Murrumbateman. Fischer made her Cardinia wines there. But, says McKay, as a working mother with three children she found little time for winemaking.

McKay says it’s an efficient little winery and by adding a few bits and pieces it easily handled vintage 2010.

He made “some nice parcels of shiraz, which was a pretty good achievement in a tough vintage” but hasn’t decide yet whether there’ll be a “reserve” bottling as well as the standard Collector Marked Tree Shiraz.

He also has a single barrel of sangiovese, sourced from Wayne and Jenny Fischer’s Nanima Vineyard, Murrumbateman. But it “may never see light of day”.

The standout wine in 2010, he says, is a Rhone style, oak-fermented white blend of marsanne, roussanne and viognier. “I’m very happy with it”, he adds (given McKay’s modesty, that probably means sensational). He’s also pleased with a 2010 riesling made for the Half Moon Vineyard at Braidwood.

McKay continues to work closely with O’Leary. “There’s a fair bit of overlaps on our grape sources”, he says, and it helps if they both keep an eye on the vineyards. They bring different perspectives, McKay adds. But, more importantly, as vintage approaches each year, they spend a great deal of time visiting and influencing the management of vineyards they’re buying from. Ultimately, fruit quality drives wine quality – and their fussiness in this area shows in the wines they make.

On Friday 2 July, for examples, judges at the Winewise Small Vignerons Awards awarded the trophy for best shiraz to Nick O’Leary Canberra District Shiraz 2009 – further cementing Canberra’s leadership with this style of shiraz.

O’Leary’s success in this credible wine show follows similar applause for Collector Reserve Shiraz 2008, made by O’Leary’s long-time winemaking mate Alex McKay, at the 2010 Royal Sydney Wine Show.

McKay says that when he and O’Leary source fruit from local growers they don’t cherry pick the amount to suit their own brands. If they like a block of vines, they’ll buy the lot as it’s neater for the grower and, it seems, opens other winemaking options – like their just released joint-venture Bourke Street Shiraz 2008 ($19).

McKay says there’s a limit to the volumes they can make and sell at the prices their own brands command (currently around $30 for the standard Nick O’Leary and Collector and $46 for Collector Reserve).

But there’s an opportunity, especially in restaurants, for good quality regional wines at a more affordable $20.

They make all of their shiraz as if it’ll be a component of the premium wines, says McKay. But as they move from oak maturation to final blending, for style, quality or volume reasons they eliminate some parcels. In 2008 these shiraz parcels became the first Bourke Street wine, released recently after a year in bottle. It’s a terrific drop. And there’s a 2009 in the wings, along with a few other wines, to be covered here when they’re released.

The 2009 vintage of Collector Marked Tree Shiraz and Reserve Shiraz are to be released in September and they’ll be reviewed here at the time. We’ll also review O’Leary’s trophy-winning 2009 Shiraz in the near future.

And we’ll just have to wait and see who buys the original Lake George and what they do with it, and how the Karelas family fares with the piece they keep. We’ll catch up with Sam Karelas when he returns to Australia and pass on any news.

Copyright © Chris Shanahan 2010