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29/03/2016

Keeping wine as a family affair harder as big business moves in

Bill Hardy, the fifth generation family member of Australian winemaker Hardys, talks proudly of his pioneering great-great-grandfather Thomas Hardy and his vision to create fine wines sold in the markets of the world.

Eli Greenblat THE AUSTRALIAN

Over at Grant Burge, the winemaker’s website tells of fifth-generation Barossa vigneron Grant Burge who along with his wife Helen founded Grant Burge Wines in 1988, driven by the passion of the Burge family.

It’s much the same at Houghton’s, a West Australian winemaker that traces its history back to 1836 and a renaissance under father and son team, George and Jack Mann.

All this is true. Historic fact.

But dig a little deeper in the websites, and you will quickly discover all three brands are owned by one of Australia’s most well-known private equity firms, CHAMP Private Equity, and housed in a corporate winemaker called Accolade Wines.

You couldn’t get more different than private equity and family ownership, but of course brands like Hardys, Grant Burge and others prefer to have old-time black and white pictures of families in front of 19th century homesteads on their marketing paraphernalia than images of merchant bankers in pinstripe suits.

And it’s just this type of marketing spin that is starting to irk truly family owned winemakers, such as Robert Hill-Smith, the fifth-generation vigneron at Australia’s oldest family-owned winery, Yalumba. He calls it a con.

“I’m really sick of the latest trend for corporate misuse of the term ‘family’ when promoting wine brands that were sold by the family founders eons ago and conning wine loving consumers and trade alike,” Mr Hill-Smith told The Weekend Australian.

Mr Hill-Smith is also the chairman of Australia’s First Families of Wine, an association formed six years ago by 12 families who represent some of the oldest and most respected wine brands in the country. The families that make up AFFW include wineries such as Tyrrell’s, Taylors, Yalumba, Tahbilk, De Bortoli, d’Arenberg, Brown Brothers, Howard Park and Henschke.

Mr Hill-Smith said he had noticed over the past few years the term “family” steadily creeping into wine label marketing, imagery and advertising as winemakers responded to consumer passion for family-owned businesses with a sense of history and provenance.

“It’s been something emerging in the last years, that more and more winemakers are branding themselves as family winemakers, on the smaller level that is absolutely true and absolutely their right to do so, that is not being disingenuous or mischievous.

“But now, intriguingly, some of the larger corporates that have bought into fallen family business, or are reinventing themselves as family businesses are being, I believe, deceptive and mischievous because I think we all know there is an emotional attachment to the food and wine. And where two things are priced the same and look the same, if there is an emotional linkage made to a family-owned business, that will get the sale in lieu of an alternative that sits as an anonymous, possibly corporate offer.”

Mr Hill-Smith said these corporates were portraying themselves as family companies, undermining the validity or provenance of the genuine article — real family-owned businesses.

“It’s misleading and deceptive at best, lacks honesty and as the chairman of Australia’s leading family-owned, multi-generational wine businesses, with over 1250 years of experience between us, I felt it was time to vocalise our concerns.”

Not so fast, would be the response from many of these corporates. They are as passionate about the wine they produce and the history they have inherited — or bought — despite the fact they might be owned by private equity, shareholders or a global multinational.

“Accolade Wines is very proud of the illustrious histories of Hardys and Grant Burge Wines and delighted that family members continue to be involved in the business,” a spokeswoman for ­Accolade Wines told The Weekend Australian.

“Both Grant Burge and Hardy family members still supply grapes that go into such notable wines as Grant Burge Meshach shiraz and Eileen Hardy chardonnay.

“After 160 years, Hardys is still closely associated with members of the Hardy family. Three members of the family share their passion with the business Bill Hardy, fifth generation scion of the founder, Thomas Hardy, works for the business as brand ambassador and his daughter Alix, works at the Hardys’ Tintara winery at ­McLaren Vale. Sir James Hardy hosts functions in the UK and Australia.

“Grant Burge continues to supervise winemaking, ensuring the wines remain true to character, and (is) brand ambassador.”

Australian consumer rules prohibit corporations engaging in conduct that is or is likely to be misleading or deceptive. If a wine’s branding, labelling or advertising states or by implication falsely indicates that a wine is produced by a family business, the business may potentially fall foul of this.

However, Kliger Partners principal lawyer Daniel Kovacs said imagery or wording that is merely vaguely suggestive of a non-existent family-business connection may not be sufficient to catch a corporate winemaker in a trial.

Mr Kovacs said the potential misleading nature of the use of family imagery and marketing could greatly depend on the reaction and motivation of shoppers.

“In considering whether wine labelling, advertising or marketing is misleading or deceptive, it is important to consider whether the nature of the alleged misrepresentation is such that it would be apt to induce consumers to purchase the products of the winemaker, rather than one of its competitors.

“In this context, a court would likely consider whether consumers genuinely place value on whether a wine is made by a family-owned business as opposed to a large corporation. Does family ownership of the brand influence consumer behaviour or is it irrelevant to wine-drinkers?”

In terms of trademark protection, or using trademark legislation to puncture a corporate’s use of the family term, genuine family-owned winemakers could mount a challenge to the use of family heritage by some corporates.

“It may also be possible to have a registered trademark cancelled on the basis that because of changed circumstances since the trademark was filed, the use of the trademark would be likely to deceive or cause confusion, for example because a family trademark is no longer connected with the family that first registered it.”

Mr Hill-Smith remains resolute. “We should all work to end this advertising folly being foisted on the unsuspecting by the board rooms of the multinationals.”

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