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The Australian Wine Industry
Sophie Seppelts Said We Would Never Die but History Proved Unkind
Friday, 24th April, 2015  - David Farmer

A wine and food dinner in the Barossa Valley on the 16th June, 2007 at the Seppeltsfield dining hall, C1890, with winemaker James Godfrey, far exceeded my expectations. By the end of the evening I was in no doubt I had tasted the greatest range of fortifieds I would ever see, and likely the best that could be assembled anywhere in the world.

For me the village of Seppelstfield is the most important wine site in Australia and that it also houses a collection of rare fortifieds simply adds to the appeal. In one cellar there are rows of barrels of century old wines; which make you marvel at the sense of purpose required to build such a collection.

The buildings and gardens are hallowed ground and when I touch the old stonework I think about those who have gone before while I like to imagine it asks employees what they might add.

How difficult it must have been to create this business all the while guarding it for the future; though history has shown the long, careful start would not be enough.

The dinner menu 16th June, 2007, Seppeltsfield, Barossa Valley.

During dinner I reflected on what type of person has the foresight and desire to build such wines, wines which alas have become museum relics, curios of a dying breed that now appeal to a few Barossa die-hards, ex-employees, and a handful of wine-makers. Does the neglect of these treasures also mean that those who pretended they were wine merchants were no good at teaching consumers where to find beauty?

Seppelts would not risk a tasting like this is Sydney, as no one would go. Perhaps it was best to let these old wines sleep in the Barossa countryside surrounded by those who show affection. These thoughts dampened my early excitement and I left the dinner in a sombre mood.

I recalled that as fortified sales slid through the 1970s and 1980s a variety of promotions were devised which ended in the 1990s by giving away these rare treasures at Christmas time for next to nothing. Even then customers failed to see what Christmas had delivered.

And what of the Seppelts family who lost their empire, to be followed by new owners who thoughtlessly abused the history while wasting the brand appeal because they found no meaning in what they owned.

Were the changes to fast, the constant push for quick success being simply too much for a business erected to survive different times?

A. A Brief History

Seppelts had its highs, and surely when the Seppeltsfield compound of winery buildings, admistration offices and residences were completed there was a moment of satisfaction.

This was followed in 1916 by the purchase of Chateau Tanunda making Seppelts a mighty force in the brandy business while adding the sparkling wine empire of Great Western, Victoria in 1918 must have been another important moment.

The depression and war were behind the family when they decided to explore cooler climates with Keppoch in 1964 and later Drumborg; moves designed to navigate the way forward in the new age of table wines.

Still the 1970s-1980s were a violent time in retail as old allegiances faded and a new business aggression appeared. Pushy types saw carefully managed family companies as ridiculous.

B. Seppelt and Sons was a tiny listed company and in 1984 was attacked by the corporate raider Adelaide Steamships. The sales of Seppelts Great Western sparkling wines, which totalled over 500,000 cases per year, were critical to finances, and to soften the target Adelaide Steamships flooded the market with Penfolds Minchinbury sparkling which was sold by retailers at $2.99, a dollar cheaper than Great Western.

It all got too much and the Seppelts family, seeking a friendlier offer, sold to the local beer producer, SA Brewing Holdings in early 1985, leaving the family with the memories of 134 years of ownership.

This drama though had not played out as the feared corporate raider Adelaide Steamships, now with multiple wine businesses, was by 1990 close to collapse. In a bold and surprising move SA Brewing Holdings purchased the wine interests to add to Seppelts, giving them an immense portfolio of wine brands.

In 1993 SA Brewing Holdings in turn sold its Adelaide beer business to Lion Nathan, the Sydney based brewers of Tooheys, and renamed the wine and packaging business Southcorp Holdings Limited.

I ask how can it be that in the 20 years from 1985 the Seppelts name would be reduced to nothing. The fresh support from friends was followed by becoming part of a collection of formidable businesses; yet all of this only proved that what seemed so simple, running a business owning many desirable brands, was terribly hard and perhaps impossible and Seppelts was dragged down with many others.

I imagine as the managers gathered in the fashionable new offices in the The Rocks, Sydney, the whereabouts of difficult to sell barrels of rare, old fortifieds became an unwanted distraction. Suddenly the future of Seppelts was uncertain and being one of the least attractive brands was placed on the shelf.

What followed at Southcorp, on an epic scale, was the destruction of a vast brand portfolio, the ruin of which still haunts the local marketplace and will do so for decades ahead.

How did it happen, who can be blamed? Perhaps it does not matter but for the few of us interested in the histories of our heritage companies and what toppled them it is worth recording some events and perhaps there are some lessons worth remembering.

Seppelts the owners of all you can see being a credit to their ingenuity, patience and foresight. A pictorial envelope dated 1945 showing the winery buildings.

Here is some of what I recall.

B. The Years Prior to 1985

From the 1970s tastes were changing quickly and businesses which had been built on selling fortified wines and brandy had to hastily re-invent themselves and this stress was always going to leave some behind.

The profitable growth was coming from the sparkling wine production centred at Great Western which with its long history was now Australia’s most trusted sparkling wine brand.

This shift in the purpose of Seppelts to Victoria and the use of the brand on Great Western plus and how this evolved into Victorian table wines surely created a confusion of identity, not only with the public but at the Barossa headquarters.

Rather than building the Seppelts brand around warm climate reds from the Barossa, perhaps modelled on the image of Penfolds, the family, likely unwittingly, made bold moves which were to prove unfortunate.

Great Western was a business incredibly rich in its own history and Seppelts made an enormous blunder when they relabelled these wines.

Irvines Great Western Champagne cellars and Irvines Sparkling Burgundy.

Also the decision to seek out new vineyards in cooler climates is likely to have drained energy and focus from the far more pressing need of a new direction for the Barossa base. It seems a history of making beautiful fortifieds trapped the family as it was to do with later owners.

Planting vineyards for wine is one thing while getting resonance with consumers is entirely another problem. If a lesson is to be learnt it is how difficult it is to build an image for new wine regions.

It is also a striking oddity that the heritage names of Hardys, Gramps, Seppelts, Reynella, and lesser names like Hamiltons, Saltrams and Normans were all unable to build a brand reputation around the warm climate, richly flavoured table wines from the regions where they sourced fruit.

These are large mistakes, hindsight for sure, but you get paid for getting the long term trends right not gambling the heritage on short term moves. Reading the market is hard to do and that is why impulsive marketing moves based on nothing but the haste of being seen to be doing something must be resisted.

I now have the view that by the 1980s a pattern was in place which had begun to seal the fate of Seppelts. It needed marketing nouce beyond those that followed to give Seppelts the place it deserved.

C. Personal Memories of Seppelts

Looking back, the early 1990s may well have been the high point of the modern era for Seppelts. At this time I believed Seppelts important enough to take a group of Melbourne customers to Great Western. We had dinner in the sparkling wine drives and it was a memorable and happy evening.

History was never far away and it was a moving experience walking through the local cemetery where the best of Great Western lie; Jean Pierre Trouette 1833-1885, Emanuel Salinger 1836-1911, Hans William Henry Irvine 1849-1915, Charles Honore Pierlot 1853-1918, and Colin Preece 1903-1979.

The greats that helped build Great Western and Seppelts at rest. Photos by Muzza from McCrae.

The early promise of wines with local Great Western names such as Moyston and Arrawatta had been devalued in the discount bins of the 1970s and 1980s and they had lost favour while promising new regional wines from Keppoch, later called Padthaway, and Drumborg never found acceptance.

Even worse a similar fate was looming for the famous sparkling wines. This was a time of furious discounting and discounting when you are trying to build a quality image is difficult and may be impossible. So it was that developing high end Great Western product images, around the names of the graveyard pioneers, died with this price upheaval.

Some of our greatest winemakers made the wines of their careers but they were no match for the greater force of marketing errors and I watched as the life of the brand seeped away.

I still ask how Great Western the greatest brand in the history of Australian sparkling wine can be reduced so surely to nothing.

The era of fortifieds and brandy was also rapidly drawing to a close which must have created increasing problems at Seppeltsfield and the fortified outpost at Rutherglen.

The great brandy name of Chateau Tanunda became its own memorial while at Seppeltsfield the greatest collection of aged fortified ever assembled was left to age and the lights turned off.

Who was to know that the dawning of the age of table wines during the 1950s-1960s, which radically altered how we entertained, dined, and consumed alcohol, and which correlated with a wave of optimism and wealth creation, was to become for our heritage wine companies a time of stress, takeovers and a great deal of misery.

Remember what we built and be careful.

On the highest hill that overlooks the buildings of Seppeltsfield the Seppelts family built their mausoleum. It sits on a quartzite ridge that separates the two valleys of Marananga and Greenock, and from this vantage you can survey what the energetic family built from 1851 to 1910.

The eldest son of the founder, Joseph Ernst, was the ambitious and industrious Oscar Benno Pedro and while Oscar expanded the business his wife Sophie ran the busy household plus gave birth 16 times over the period 1872 to 1891 with 13 children reaching adulthood.

The symbolism of the mausoleum is striking. From this place past family members could exert a beneficial and I like to think a tempering influence on the decisions of descendants. What they did not envisage was having no influence at all as a stranger fate waited which was to find Seppelstfield, built forever, had passed into anonymity.

D. Changing Label Designs is the Answer

One of the curious things I have noted in the wine business is that when a company is having problems of growth or any problems at all the marketing department is asked to step forward. The answer they often suggest is to change the label or labels while at times a more dangerous and broader initiative is pushed which is to alter what I call 'the company look'.

Such is the damage this can do that seemingly well thought out moves, some of which may seem tiny, can in a moment destroy what has taken 100 years to evolve.

This is why I have come to think that marketing departments should be kept well away from the steering wheel. Initiatives which at the time must have seemed brilliant have had terrible consequences for our heritage companies, and alas many others, forced by that irresistible impulse to be seen to be doing something.

The architect Frank Lloyd Wright described this well; 'the interior decorator is simply an inferior desecrator of the work of an artist' and how appropriate this is to the dreadful destruction brought to the Australian wine business from the 1980s to now.

The terrain or earthy, terroir look of the Seppelts labels developed in the late 1980s.

My long years of serving customers gave me ample opportunity to watch customer response to label changes. In the late 1980s the old Seppelt labels were drastically changed and I watched with increasing alarm the slide in sales. The customers were moved by the new designs but to other products.

The legacy of decades of poorly thought out and impulsive acts, playing loose with a company's history, has brought great damage to the Australian wine industry and I personally feel it has brought great shame.

E. The New Seppelts of 2000

In the early 2000s a colleague and I convinced the managers of Southcorp to fly us to Coonawarra and one morning we boarded the Oatley family Lear jet at Bankstown and it was off to Wynns. I had a hidden motive as I was very interested at this time in the soils and landscape of Coonawarra and its surrounds and was able to get the pilot to do a bit of aerial survey work which helped me see things in a new way.

We had also asked to see the Seppelts Drumborg vineyards and late in the day touched down inland from the coastal town of Portland. This turned out to be a surprise visit as the vineyard manager-wine maker picked us up in a beaten up old Landrover and mumbled that he was not used to visitors from head-office, indeed we were the first he had seen.

I guess he thought he was about to get the sack which I picked up on quickly and proceeded to lord it around the estate as if I was a princeling consultant from head office. I found out some soil stuff I wanted but the impression of Drumborg as a far flung, bothersome outpost, remained with me.

How would you capture the attention of customers in selling these wines? It all seemed far too hard in a retail business which had enough problems without attempting the equivalent of a weight lifting record which would be required to sell the Seppelts Drumborg wines.

By the early 2000s the Southcorp Company could see Seppelts was struggling, marketing was called in, and they launched the fresh look at the Great Hall of the University of Sydney. As to be expected this involved new labels.

I had arrived early and was able to view parts of the adjoining Nicholson museum of antiquities. Many of these precious items were collected from burial sites and some are thought to express what was believed important to take to the after-life.

It was later that evening I began to wonder if there was a connection linking my experiences of Seppelts with images of graveyards, mausoleums and tombs.

I asked myself how Seppelts had become associated with Great Western and Victoria while leaving Seppeltsfield to become a museum of fortifieds. As already remarked all retailers had ever wanted was for this great company to be noted for wines from the Barossa Valley yet why was that so difficult for the company to see?

The new look of Seppelts which dates to early 2000s.

That evening a Seppelts family member expressed solidarity, and while not a motivational speech it invoked the past and at least for a moment hopes rose; or at least they did till we settled back into the anaesthetic of the numerous old fortifieds on offer.

The new labels returned to a simple, dignified look but the retail industry was changing fast and I wondered how Seppelts could get attention amongst so many other wines.

Nothing happened with Seppelts sales of course and some of the great red bargains were the Seppelts Victorian reds of this period. Wines of impeccable breeding, often laden with medals, cheap rather than fairly priced but it was to no avail. The spirit had died with Moyston Claret back in the early 1980s.

A recent CEO of Treasury Wine Estates, David Dearie had one important impact on the company in his brief tenure, which was dragging the company along the path to believing they could sell premium wines in volume across the globe. To do this you must have an image and apart from Penfolds not a lot was on offer.

While visting Seppeltsfield in 2012, which by then Treasury no longer owned, he asked the accompanying executive, 'explain to me again why we sold Seppelstfield'. As I remarked in another article you can have the dross of Rosemount or the bullion of Seppelts, and so it is you live with your choices.

Heritage is an interesting thing as when sales are down so are profits so what do you cut out? In 1985 Seppelts decided Sparkling Burgundy had no future and this during the time when they launched Salinger and sponsored horse racing.

My own heroic effort was to show faith in the brand and in the company of brother Richard and the executive Dallas Haynes, lunch turned to dinner and we managed 16 bottles of the glorious Seppelts Arrawatta Riesling, a 100 pointer if ever there was one.

I have thought about that evening of fortifieds at Seppelstfield many times which not only brought focus to great wine but left unsaid the vacuum of what might have been. I have learnt a bit more about the family and in 'The House of Seppelts 1851-1951' this story is told; "Sir Jenkin Coles cracked a joke about the 13 children of the Seppelts family, and said that they would guarantee that the name of Seppelt would not die out"; Mrs Sophie Seppelt replied; "It will not die out."

Seppelts is not dead yet but is struggling and very old. The mother of 16 babies would not comprehend an age where less than two is enough. The mausoleum on the hill will not have to worry about lack of spaces.

The chairwoman Roslyn Russell of the UNESCO Memory of the World Australian Register recently said the collections preserved cultural memory as "If we don't have these records, we have no memory."

The Australian wine industry has little memory. Of Seppelts we have a few headstones and those beloved fortifieds. Goodbye Seppelts, I knew you well.

An enviable show record was not enough. As seen on the walls of the Distillery Room, Seppelstfield.

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Tough Going for Wine Industry Minors

Thursday, 4th August, 2005

Solid Growth Continues for Jacob's Creek

Monday, 1st August, 2005

More News on the South Australian Grape Crisis

Monday, 1st August, 2005

Tough Time to Start but First Little Sign of Improvement

Tuesday, 26th July 2005

A Shift from a Sellers Market to a Buyers Market

Sunday, 24th July, 2005

A Stamp of Approval

Wednesday, 20th July, 2005

Deloitte Finds Losses Aplenty

Wednesday, 20th July, 2005

Take a Risk With a Good Name

Tuesday, 19th July, 2005

Should the Grange Have Been Made and Henschke's Barnyard Character

Friday, 15th July, 2005

One Small Step - New York Changes

Friday, 15th July, 2005

Tallarook Use Old Ideas for New World Wines

Tuesday, 12th July, 2005

Sometimes We Are Just So Silly

Thursday, 7th July, 2005

The Disappearing Barramundi

Wednesday, 6th July, 2005

A $222 Million Loss of Value in a Year

Monday, 4th July, 2005

The Wine Investment Scandal: An Update

Monday, 4th July, 2005

What Australia Drinks: the Spirits Come Back

Tuesday, 28th June, 2005

Xanadu Hardly Idyllic for Shareholders

Tuesday, 21st June, 2005

Export of Sommeliers Needed

Tuesday, 21st June, 2005

Yellow Tail the Trendsetter

Wednesday, 15th June, 2005

Cleaning Corked Wine

Wednesday, 15th June, 2005

Stelvins for Adelaide

Wednesday, 15th June 2005

Straight Talking By the Man From Thomas Hardy

Tuesday, 7th June, 2005

The Downward Price Vortex Gathers Speed

Sunday, 5th June, 2005

Trying Until the End

Wednesday, 2nd June, 2005

What a Difference a Year Makes to SGARA

Thursday, 19th May, 2005

Holding up Well All Things Considered

Tuesday, 10th May, 2005

One for the Brave Investor

Sunday, 8th May, 2005

We Talk with U.S. Importer Peter Weygandt

Friday, 29th April 2005

Ned Kelly Rides In

Wednesday, 27th April 2005

More on that Disappearing Wine

Tuesday, 26th April 2005

Wine Investment Takes Another Knock

Friday, 22th April 2005

Let the Hard Work Begin

Friday, 22th April 2005

Will a Desperate Company do a Desperate Thing?

Wednesday, 20th April 2005

Nearly Half are Yellowtails

Tuesday, 19th April 2005

The Smell of Death

Thursday, 7th April 2005

Fake Medals to Go

Thursday, 7th April 2005

An Update on Australian Wines in the U.K.Market

Saturday, 2nd April 2005

A Peep Behind the Wine Show Door

Thursday, 17 March 2005

Downward Wine Price Pressure Continues

Thursday, 17 March 2005

Make Me Some Clean Skins

Wednesday, 16 March 2005

The Fosters-Southcorp Game of Bluff

Thursday, 10th March 2005

Greg Norman Back on the Winning List

Tuesday, 8th March 2005

Bridget Jones Enters the Wine Marketing Lexicon

Saturday, 12th February 2005

Mine is Bigger than Yours

Friday, 11th February 2005

Bridget Jones Enters the Wine Marketing Lexicon

Saturday, 12th February 2005

No Surprises from Foster's and Southcorp

Wednesday, 9th February, 2005

Jacob's Creek and Wyndham Estate Feel the Pressure

Saturday, 5th February, 2005

A Wine Merchants Warning

Monday, 31st January 2005

Drinkers Will Smile and Investors Frown

Friday, 28th January 2005

Great News For Southcorp Shareholders - the Bid is for Cash

Monday, 17th January, 2005

A Record to Inspire Confidence?

Friday, 14th January, 2005

A Terrible Botch at Takeovers

Thursday, 13th January, 2005

Doctors Keep Pressing for Increased Wine Tax

Saturday, 25nd December, 2004

Wine Comes to the Big Screen

Wednesday, 22nd December, 2004

American Journalists Must be Wine Drinkers

Tuesday, 14th December, 2004

Memories of 1905

Tuesday, 14th December, 2004

ABARE Report Shows Meagre Returns for Grape growers

Monday, 15th November, 2004

The Value of a Brand

Tuesday, 9th November, 2004

What Governments Give...

Thursday, 28th October, 2004

Hot Weather to the Rescue

Tuesday, 26th October, 2004

The Battle for Pubs

Tuesday, 19th October, 2004

Back to Being a Cash Cow Good News for Investors

Tuesday, 19th October, 2004

Another $70m of Embarrassment for Fosters Group

Wednesday, 13th October, 2004

A Good Idea at the Time

Friday, 1st October, 2004

How do You Grow a Wine Company While Cutting Vineyards and Stock?
The Answer is:

Tuesday, 2nd September, 2004

Glug visits the Adelaide Wine Show

Friday, 8th October, 2004

The Price Of Being One Industry

Tuesday, 29th June, 2004

Cork Amnesty The Move to Screw Tops Continues Apace

Thursday, 16th October, 2004

Coming to a Bar Near You?

Wednesday, 8th September, 2004

Andrew Garrett Goodbye?

Tuesday, 24th August, 2004

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