Cultivating wine and truffles in the Margaret River

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The idea of owning a 170-hectare vineyard and producing award-winning chardonnays and merlots can be an alluring prospect. It isnÆt uncommon for people to have romantic notions about strolling through rows of grape vines and inviting their friends around to taste the latest vintage. Unfortunately,
however, many of these ventures come unstuck from an investment perspective because the people behind them havenÆt understood the business of winemaking. But in AustraliaÆs Margaret River district, there is a relative newcomer that is showing the countryÆs wine industry how to do it better.

When you turn into the long driveway leading to the Watershed Premium Wines estate, you are greeted by a sense of style and attention to detail that suggests nothing has been left to chance. The plants in the lush garden beds have been chosen to tie in with the colour of the Watershed label and the architecturally designed buildings are made of local stone and wood. The fact that the infrastructure has been built in three phases isnÆt obvious because the project has been well thought through. Additions to the visitor buildings, the winery, and the vineyards have been well orchestrated.

The name Watershed has two meanings. The property sits on a high area between two bodies of water, which in geographical terms is known as a watershed. But the word also means an important event or factor that serves as a dividing line, which the wine company has interpreted to mean that it is taking winemaking to a new, higher level of understanding û an awakening that distinguishes it from other Australian vineyards.

The managing director behind the venture is Geoff Barrett, a former lawyer and banker who, before turning to winemaking, was a specialist in managed investments. His years in the finance world have taught him how to learn from other peopleÆs mistakes and given him an ability to recognise the next best thing û which is why his latest project involves the wide-scale cultivation of French black truffles. Barrett clearly has a passion for quality wines and
gourmet foods, but it his nose for business that is making his venture a success.

Watershed Premium Wines is structured as a managed investment scheme where investors can purchase units in a company that owns the land and also participate as a premium wine producer. Shares in the land company can be held in a separate name to the wine business, and returns are based on wine sales, annual share dividends and increasing vineyard values. The wine
project has exceeded forecast returns every year since inception. ôWe wanted
to create an opportunity for investors to own shares in the underlying assets û
the land and the infrastructure û rather than restricting them to taking a
position on the harvest,ö says Barrett, who still has units available to
sophisticated investors with about A$250,000 ($210,000) to spend.

The assets at Watershed consists of: 80 hectares of land under vine; a 200
megalitre dam, a small Diemme press and a larger Pera press with the capacity
to crush 1,200 tonnes of grapes; an award-winning cellar door open daily; a
170-seat restaurant and cafT; and an 80- seat seminar facility located below the restaurant. The estate has come a long way since Barrett cut the ribbon on the cellar door in September 2002. The next phase of the project will give Watershed a total of 227 hectares under vine and allow it to produce between 160,000 and 170,000 cases of wine a year, generating revenues of A$20 million. Plans are also underway to build a large packaged wine storage facility on the site.

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