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Star Interview: Neil McGuigan of Australian Vintage

Posted: Tuesday, 10 November 2015 12:27


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Star Interview: Neil McGuigan of Australian Vintage

Nov 10: Neil McGuigan, the well-known and much awarded winemaker and now the CEO of Australian Vintage Ltd. (AVL) was the special invitee VIP Judge for the Cathay pacific Hong Kong International Wine and Spirits Competition (HKIWSC) last month when Subhash Arora took the opportunity to chat with him about his philosophy of winemaking, their interest in India and related topics like the legal case AVL had filed against Indage Vintners in 2009

Click For Large ViewCathay Pacific HKIWSC is a unique competition where only Asian judges taste the wines under the chairperson Debra Meiburg MW who has been now a resident of Hong Kong for almost three decades.  There is one exception-a VIP judge, a wine professional of eminence is invited from outside Asia. Neil McGuigan was invited to be the VIP judge for HKIWSC 2015.

Neil has been a renowned winemaker and has been heading the team of winemaker till he was appointed the General Manager for the supply chain and later CEO of the parent company Australian Vintage Ltd. (AVL) in July 2010. McGuigan Wines was declared the International Winemaker of the Year in 2009, 2011 and 2012 at the International Wines and Spirits Competition, London (IWSC) and also the International White Winemaker of the Year in 2009 and 2012 and 2013 by the International Wine Challenge. A lot of credit goes to Neil for heading the team of winemakers.

Neil McGuigan is very approachable with easy demeanour and has a very informal style though definite opinions and was willing to discuss and give his point of view on Australian or any other wines being tasted at the competition. When I told him I would like to interview him for delWine, he readily agreed and we fixed the last day of the competition when the work load is slightly lighter.

Australian Vintage vs. Indage Vintner

Next day it dawned on me that it was his company AVL which had made an Agreement to sell to  Indage Vintners  one of the a winery owned by them-Loxton, in 2008 for $60 m, when Indage was at its zenith and the Australian industry was already in trouble because of over capacity.

So my first question to him was if he knew what had happened exactly? He said,’ I don’t know details of the transaction because I was then the General Manager, not directly involved with the case but I knew what was happening in general.  Indage had started having financial troubles soon after the deal was signed and after several postponements and waiting for over a year, the company decided to sue Indage for not honouring the contract.’

‘I remember we won the case, were allowed to keep the advance of A$ 6 million and Indage was asked to give us some wine from another winery (Tandou/ Thatchi) that they already owned at the time. AVL was finally able to sell the winery for a loss-at around A$27-30 million, later to a private company in the USA-The Wine Group’. This just showed how the timing had been so wrong for Indage to have made the deal in the first place!

The Loxton Story

Click For Large View‘Loxton is a 70,000 tons winery that had been a part of the AVL through Simeon Winery. AVL had come into being through the merger of Miranda Winery which in turn merged with Simeon and   Brian McGuigan Wines started by my brother Brian’. Through some complex arrangements wineries in Australia had developed a business of bulk wine and bottling- Simeon which merged with McGuigan was in fact the bulk wine bank for the world. McGuigan which specialised in 750 mL bottling,  had first merged with Simeon (a son of Jacob)  and Miranda was then bought by Simeon McGuigan to form AVL.  In the 1990s Australian wines had become so popular that everyone wanted them.’ Apparently the wineries pooled in resources to handle the exponential demand.

‘Suddenly, the Australian dollar appreciated. The demand for Australian wines decreased, the business went down, the orders started getting cancelled and there was over-capacity everywhere. Loxton which was working with many big wineries was heavily underutilized and there was no alternative but to put it on the block.’

History of McGuigan Wines

Our grandfather started viticulture and tended wines in late 1800s. Dad was a winemaker in Penfolds working with Dalwood wines. He ended up buying the property from Penfolds and started Wyndham Estate in 1967. He sold it to a partnership in which my eldest brother Brian (now 73) was one of the 3 partners, in 1972. Brian went public in 1984 as we needed funds-Australia was on a roll. He is the oldest of us 5 siblings and I am the youngest at 57 years,’ as I interrupt and ask him their respective ages.

‘Despite the company being highly profitable, there were some financial disasters in 1990 when the Orlando arm of our French friends Pernod Ricard took over the company. Brian still had 40% share but he found the work culture totally different and did not find himself compatible. He sold his shares and raising $10 million on the stock exchange started another company in 1992.’

‘I had a technical winemaking degree from Roseworthy Agricultural University in 1978. I was with Brian from 1992 to 2002 working with the McGuigan brand. In 2002 there was a merger with Neil McKenzie of Simeon Wines and McGuigan Wines to form McGuigan- Simeon Wines Ltd. In 2004 Miranda came along and joined forces. Name was changed to Australian Vintages Ltd in 2008.’ It was this entity that negotiated the deal with Indage Vintners which reneged on it and faced the legal consequences subsequently. For a related Article in delWine, please visit American Wine Group buys Australian Loxton

Business with India

AVL had started doing business in India in a small way through Hema Connoisseurs. In fact, the McGuigan Black Label red which is the biggest selling red wine in Australia found reasonable success. Leah O’Shea, the Export Executive for Asia Pacific was in India to promote the Black Label varietals along with a couple of Yaldara Estate labels but discontinued when the FSSAI labelling problems were at the peak, and the company not willing to oblige for such a small volume.

Apparently they have now comprehended the problem, especially after Pernod Ricard going to the court and winning the lawsuit against FSSAI. A container load of wines has been shipped and the Black Label will be available soon. Considered a notch above Jacobs Creek, Neil stresses that they have been national winemakers for 3 times, whereas the competitors y haven’t! He fully understands that the spirits business of Pernod would give them a leg in. In fact, distribution is acknowledged as their biggest strength, already making them the biggest import of India and making Australia the biggest wine exporter to India.

I explained to him that even though India is a small and difficult market, if they want to be present in a medium-long term they have to nurture and support the sales efforts of the importers in terms of winemaker dinners and visits with the hospitality industry personnel. ‘What you are saying is that we have to work with other distributors in other countries. There is no quick fix in India. This is n problem- we can do that. We are up to the challenge.’

Click For Large ViewNeil has never been to India. I recommended to him to pass through India sometimes and have a winemaker dinner with the distributor in Delhi Mumbai or other cities depending upon the time available and the suggestion of the importer.

There will be no Yaldara Estate wines this time around though. It was sold recently. Indicative of the turmoil in the Australian wine industry, he says ‘the 13000 tons winery was putting only 5000 tons on it. We have a contract for two years to crush for them.’

Ageworthy Semillon

It was interesting to see quite a few aged Semillon that were winning gold medals at the HKIWSC.  What was his reaction? He emphasised that ‘Semillon with low pH, low acidity with lime character and not lemon character when young would do better after a few years. Best examples have Lime and are more refreshing zesty. You want refreshing Lime, you don’t want battery acid. The control is through the vineyard and tartaric acid.’

It’s interesting that people talk about Australian Shiraz but Semillon is unique grape varietal to Australia. Bordeaux makes white wine using the grape but as a blend with Sauvignon Blanc. When handled properly, it gives an excellent Ageworthy wine’ he says, citing the example of their own 2006. ‘Our style is approachable while young but the wine will age also.  For instance our 2006 has won the Semillon trophy at IWSC for 5 years. We will withdraw from the competition now because our label recommends 8 years of aging. We also make Semillon Blanc – an approachable wine which is doing modestly well- it sells quite well in Canada.’

Shiraz Character

Think of Australia and the image of Barossa conjured up in your mind. But Neil says that Hunter makes  a more typical Shiraz. ‘It is more approachable and food balanced wine with no jammy character but having richness. It’s more savoury with juicy tannins and high alcohol like Barossa-but more approachable fruity wine- generally with around 12.5 % alcohol. You can have a whole bottle and still enjoy it.’

Wine Competitions in Australia and the difference

There are numerous wine competitions in Australia. How does he find them different than HKIWSC? ‘Tasters in Australia have a technical background –a vast majority of them know of winemaking.  In  Australia we are more generous in tasting- but we are  giving less gold medals than before even though our wines are better than ever now. The amount of faulty wines is very rare now- they are all technically correct wines. People talk of 5% Golds.  Our vines are getting older. So our wines should be better-there is a dichotomy there.’

Australia branded as a country for cheap wines

But then why is Australia suddenly labelled a country for cheap wines? How does he feel about it? ‘This is unfortunately not true in general about most producers. The problem is there are not enough of us out there talking about our wines and the passion we have for them, like producers from other countries like Italy and France do. We have lost that personality- as pioneers of industry. Many of us are talking about moving boxes only.  Our generation sold on the vine and wine quality and the individual character. Our pioneers had the passion in their DNA. They would travel tasting wines in different markets (he reels out the names of over a dozen such personalities). We are happy sending the export managers and executives now. They do the tastings but don’t book orders instantly like the owners and winemakers did then. This needs to change.’

Australian market is complex

He admits however that the Australian wine industry is complex and undergoing several changes. ‘More things are going to happen in the Australian industry’ says Neil. ‘Lattore went into receivership today. The 15,000 tons winery has to shut down as the bank won’t support them anymore. Who knows when this is going to stop?’

Wine is not Liquid

Neil hates the term liquid used for wine. Used mostly by FMCG companies, he says wine is not like coke-it has different characteristics   . ‘The first thing that I did when I became the CEO of Australian Vintage was I got all the employees together and said no one would use this term anymore in the company,’ he says doggedly.

Anti Brett

Click For Large ViewBrettanomyces known as "Brett" is one of the most common but controversial wine faults. Some tasters consider Brett character as a legitimate expression of natural, uncomplicated winemaking. Others consider it an unattractive wine fault resulting from poor winery hygiene and sloppy winemaking. Neil is very particular about such faults and usually gives very low score if there is such a fault in the blind tastings. His explanation is that it might be attractive to some palates initially but as the wine ages it always gets worse in the bottle and every wine must be heavily penalised in a tasting for any Brett, howsoever little.

He is similarly against any over extraction and likes pH to be low.

President of IWSC-

Neil is currently the President of IWSC-his one year term comes to a close on November 30th though. What does it mean the President of an organisation that is known for conducting wine competitions in several countries including Hong Kong? ‘I think this is an award given to people who have contributed to the promotion of brand in the world. I am there talking of wines. I am involved in getting more wines for IWSC for tastings. I am telling consumer the credibility of IWSC.’

You could talk to Neil McGuigan about any facet of Australian wine industry for hours and he would share his thoughts openly. He carries his position in the company very lightly-above all he is a winemaker and you can rest assured that any wine coming out of his winery would be technically without any faults-a problem some of our Indian producers face regularly. Perhaps they ought to turn to a Neil McGuigan for a solution!

Subhash Arora

For results of Cathay Pacific HKIWSC declared on November 5, visit  Medals rain for GroverZ at HKIWSC The competition awarded 28 Gold Medals for Australian wine, 10 of which were in the ever-popular food matching category.

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