1. State of the Wine Industry Nick Brown

2. Who am I? Nick Brown – Winemaker and co-owner of All Saints Estate, St Leonards Vineyard and Mount Ophir (Rutherglen) Shareholder of Brown Brothers (Milawa), Innocent Bystander (Yarra Valley), Tamar Ridge, Pirie and Devils Corner Tasmania

3. 1.Family 2. State of the Australian Wine industry 3. Challenges for the Australian Wine Industry 4. What’s next?

4. A Winemaking Family Family making wine since 1889 Brown Brothers Winery in Milawa 1980 - Brown Bros purchased St Leonards Vineyard in Rutherglen 1992- Brown Brothers purchased All Saints Estate in Rutherglen 1997 – Peter Brown purchased his brothers shares of StL & ASE and retains his share of BB’s

6. 2005 – Peter Brown dies in a road accident Eliza, Angela and I continue Dads passion for vineyards and winemaking by building the business of ASE and StL and assisting with BB’s Formation of a Board with the appointment of advisors (Dominic Pelligana – KPMG and Brian Walsh – Ex Yalumba Winery now Chairman of Wine Australia)

7. All Saints Estate

8. Siblings Eliza, Nick and Angela

9. All Saints History Est. 1864 Winery built by two Scotsmen Same family ownership for 120 years (prior to BB’s then Peter Brown family ownership Predominately fortified production until the 1970’s Now 95% table wine sales Wine tourism business

10. All Saints Business Wine Club approx 80% of wine sales, 6 bottles delivered to members Events – Winery Walkabout – Tastes of Rutherglen – A Day on the Green – Polo in the Vineyard Weddings – Around 70 per year. Locals, Canberra, Sydney, Melbourne Cellar Door Thousand Pound Wine Bar Building the Export business – UK, USA, China

11. Indigo Food Company

12. Terrace Restaurant

13. Thousand Pound Wine Bar and Store Rutherglen

14. 1. Family 2. State of the Australian Wine industry 3. Challenges for the Australian Wine Industry 4. Whats next?

15. Four years to grow a commercial crop – Long lead time. Which varieties to plant? A planting ‘boom’ during the 1990’s and 2000’s caused an oversupply and therefore a decrease in grape prices Australian wine grape prices have been on a downward trend, although showing signs of firming recently in some regions;

16. Australia is the 6 th largest wine producer

17. Australian Wine Production (2014-2015) 1.6 million tonnes harvested for wine production 135,177 hectares of vineyard Average yield of 12.1 tonnes/hectare Top three varieties planted (hectares): Shiraz (39,893) Cabernet Sauvignon (24,682) Chardonnay (21,442) 2014-2015 Vineyard Census, Wine Australia

18. Australian Sales Cask sales continue a long-term downward trend in Australia while growth continues in bottled sales; Sauvignon Blanc remains the market leader in Australia but growth has slowed Shiraz is a stand-out performer for Australia in the domestic market, but there are also positive signs at higher-priced segments for Cabernet Sauvignon and Chardonnay. The UK consumes more Australian Shiraz than Australia (72m litres vs 62m litres)

19. Wine Exports Australia ranks 5 th in global exports of wine 4 th in bottled dollars per litre ($3.95) AUD has depreciated significantly which is giving confidence in increased export business Total sales have increased in the last couple years due to growing exports The average value of Australian bottled wine exports is trending up reflecting growth in premium wine sales in many markets Over last five years growth in value wine sales outpaced volume growth reflecting this trend

20. Wine Exports Emerging Markets – Asia the fastest growing region for wine sales – Australian wine exports to China are the second biggest (1 st is France) – 63 million litres of bottled, 13 million litres of bulk Also upside in the US and Canada More concerted effort on marketing premium priced wines

21. Issues affecting vineyard Values Decline in the late 2000’s (oversupply issues) Upswing in higher value regions eg TAS Although vineyard area has been decreasing in the last 5 years, yield has trended upwards Murray Darling/Swan Hill have experienced the most removals since 2007 (approx 14,000 Hectares)

22. Wine business approach to assessing vineyard value Future valuations will be more regionally specific due to varietal mix planted – Eg; – Rutherglen Shiraz, Durif, Muscat – King Valley Prosecco, Pinot Grigio – Barossa Valley Shiraz Economies of vineyard layout and infrastructure Stability of climate Assurance of water access/allocation

23. Family State of the Australian Wine industry Challenges for the Australian Wine Industry Challenges for the Australian Wine Industry What’s next?

24. Challenges for the Australian Wine Industry A high Australian dollar inhibits exports Staff shortage, particularly in regional areas Water availability/assurance Climate Change

25. The reaction to Climate Change Research into drought proof varieties by the CSIRO Irrigation efficiency – Soil moisture monitoring – Sub-surface irrigation – Variety choice for future conditions Harvest periods are getting shorter and earlier putting the squeeze on winery infrastructure Tasmania..

26. Tasmania: Australia’s emerging region More water Cooler growing season temperatures ‘Clean and green’ image Significant growth in tourism from both domestic and international markets. Premium priced wines

27. Devils Corner Cellar Door Tasmania

28. Family State of the Australian Wine industry Challenges for the Australian Wine Industry What’s next? What’s next?

29. What’s next for us? Carters Vineyard and balancing vineyard investment with contract growers Accommodation Continue building the direct wine business and also sustainable export sales Museum Muscat – 100 year old fortified wine – Luxury goods market

30. Regional Iconic Wine: Museum Muscat

31. Mount Ophir History of wine Agritourism Accommodation New event spaces Whole property hire

32. Mount Ophir

33. Thankyou! Questions?