THE WINE FRONT

The day has finally come. Foster’s Group Limited (Foster’s) announced tonight that it had sold the historic Barossa Valley winery Seppeltsfield (pictured) to the Clare Valley-based winery Kilikanoon. Seppeltsfield is among the grandest and greatest and most important of Australian estates. Can a corporation have a heart? If it can, today Foster's Group Limited sold a piece of it.

Seppeltsfield drips with the kind of authenticity Australian wine - now of all times - craves. Tough times can make tough decisions easy. Kilikanoon now holds a gigantic millstone; or the opportunity of a lifetime. The decision of Foster's to sell may have been easy; the road ahead will not be.

The sale includes the expansive Seppeltsfield site, winery, vineyards and visitor facilities, the rights to the Para, Trafford, Old Trafford, Solero and Mt Rufus fortified wine brands, and the majority of Seppelt fortified wine stock currently on site. Foster’s has granted Kilikanoon an exclusive license for the Seppeltsfield brand.

“The Seppeltsfield site is truly unique in the wine world", said Foster’s Chief Executive Officer, Trevor O’Hoy. “Under Kilikanoon’s stewardship, this site will continue as one of the world’s great names in fortified wine and retain its place as a great South Australian tourism landmark."

Kilikanoon CEO, Nathan Waks was understandably delighted. “Seppeltsfield houses the world’s greatest collection of fortified wines, dating back to 1878 in an unbroken tradition. We are proud to become the next custodians of this priceless national treasure. We will work hard to ensure that Australia’s already fine reputation in this area is enhanced and to rejuvenate the Seppeltsfield Village over time through sympathetic wine-related redevelopment."

Foster’s retains the rights to the Seppelt brand for table and sparkling wine, which will continue to be based at the Seppelt Great Western winery, purchased by Benno Seppelt in 1918.

“We are committed to growing Seppelt and its reputation for Australia’s most awarded sparkling and regional wines," Mr O’Hoy said. “We are confident that under the Seppeltsfield name, a new and successful chapter in Australian fortified wine has begun.”

Bruce Baudinet, Chairman of Kilikanoon and the Seppeltsfield Estate Trust, said that “Foster’s has worked diligently and patiently to find a suitable purchaser, who can both respect the century of traditions and take Seppeltsfield to the next level. We believe that we have the energy, capital and commitment to make Seppeltsfield one of the most exciting fortified wine producers in the world, and a great South Australian tourist destination. We sincerely look forward to the challenges ahead and a close ongoing working relationship with Foster’s Wine Estates.”

Under the sale agreement, Foster’s and Kilikanoon have entered long term lease and supply contracts over around 100 hectares of premium Shiraz and Grenache vines. In addition, Foster's will continue to manage maturation stores and Kilikanoon will process grapes for both fortified and table wines for Foster’s at the site.

The transaction is due to be completed over coming months.

The sale can be argued as a good idea. Fortified wines have been market laggers for years, and they are too heavily weighted in the Foster's empire. Offload some, keep others, liquify assets for a greater assault on the main game.

The sale can he argued as ludicrously short-sighted. The greatness of Australian fortified wine is too significant to be held down forever. The recent rise of Spanish sherries and the more recent influx of Portuguese ports suggests that the fortified market, after a long slumber, may be stirring. In a brave, brand, brash new world of sparkling new wine producers, wine regions, and wine countries - history, authenticity, and greatness counts heavier, and for more. In ten years, this sale could be viewed as the day Foster's stuffed up grandly.

You never sell off greatness. You fight tooth and nail for it. 

To Kilikanoon: the onus now rests with you.