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3/03/2010

New structure brings about evolution for AWBC

Following February’s news of the Australian Wine and Brandy Corporation’s business restructure, Winetitles’ Lauren Jones yesterday met with chief executive Andrew Cheesman at his invitation to discuss the Corporation’s plans in the short and long term.

The Australian Wine and Brandy Corporation (AWBC) has undertaken a review process over recent months to streamline its operations which has led to tough decisions being made and changes to its structure. The total number of staff has been reduced to 38 after seven roles within its Adelaide office were made redundant, including Lawrie Stanford, manager of information and analysis, and Jock Osborne, senior executive and former acting chief executive, both of whom had served the AWBC for more than 12 years.

Chief executive Andrew Cheesman acknowledged the services of Stanford and Osborne, saying “they both made an enormous contribution to the Corporation and the industry in that time”.

Prior to joining the AWBC in June 2009 following several years in executive roles with Lion Nathan Wine, Cheesman said that based on stakeholder feedback, the AWBC was perceived as being “bureaucratic” and not responsive to its industry stakeholders.

“One of the first things I wanted to do in the role as chief executive, consistent with the previous NOS review, was to contribute to the simplification of the national operating structure of the industry’s peak representative bodies, including AWBC, Winemakers’ Federation of Australia, Grape and Wine Research and Development Corporation and Wine Grape Growers’ Australia,” Cheesman said. “From my time working on the other side of the industry, I understood that levy payers wanted to be certain that there was no duplication and waste. The industry expects the four national bodies to work efficiently and cooperatively to maximise services and address priorities.”

The AWBC’s priority is to improve the market environment for Australian wine by maximising its investment into Wine Australia’s market development strategy.

“A commercially aware and customer-focussed culture at the AWBC is essential to meet the needs of our industry stakeholders,” he said. “The majority of savings captured as a result of the restructure will be reallocated towards activities focussed on improving the image and reputation of Australia’s wine offer. This is our fundamental aim and all programs are being directed to this objective, raising awareness of our regions and diversity. Every segment of the wine industry can reap the benefits of this program.”

At the outset of the restructure process, Cheesman said he undertook a process of extensive engagement with industry, including wine producers, growers, and the AWBC board, WFA, GWRDC and WGGA. Discussions set about reviewing every aspect of the AWBC’s operations in terms of how it went about things, how it presented outcomes of its work to industry, what the industry valued from its projects and what the industry wasn’t using.

“As part of that consultation we undertook a full review of the AWBC’s compliance and regulation system in consultation with the Winemakers’ Federation. This review is ongoing,” Cheesman said. “We are closing some of the gaps that are evident in the compliance process, particularly those that relate to bulk wine exports. We recognise that bulk wine exports have increased from about 15% of the industry’s total exports to nearly 40% in a reasonably short period of time. We need a greater degree of transparency over the end use of these wines to address the risks associated with Australia’s changing export profile.”

Feedback from industry also suggested that the industry data and analysis presented by the AWBC was not being widely used. The decision was made on that basis to rationalise the information and analysis team, keeping foundation data such as supply and demand statistics in place and creating a new format for the presentation of data to provide succinct, snapshot views accessible from the website that is currently undergoing complete redevelopment.

“We can track how data on our website is being used through the hits and the download of information,” Cheesman said. “We’re most interested in providing meaningful information that people can use.”

Senior analyst Peter Bailey has stepped up to the role of leading the information department, which was vacated through Lawrie Stanford’s redundancy.

“Peter is ready to take on greater challenges and I’m confident that this platform will allow him to further develop,” Cheesman said. “In an environment where industry members’ levies are under pressure, we have needed to broaden people’s roles and develop capability accordingly.”

As part of the restructure, AWBC trade manager Andreas Clark will put his legal background into practise by taking up the position of general counsel, incorporating the areas of corporate governance, statutory compliance and providing secretariat services to the board and other advisory committee meetings. Clark’s duties will also encompass the geographical indication-related work that was previously managed by Jock Osborne.

Other staff changes included the redundancy of the roles of an analyst, information technology officer and several administration, support and services staff.

“In my view we were over-engineered in these aspects,” Cheesman said.

The focus now for AWBC is to become more stakeholder orientated than it has been in the past.

“It’s important that we help develop an environment that enables producers to increase their profitability,” Cheesman said. “Closer working relationships and improved dialogue with State governments, State wine agencies and regional associations is imperative to meeting these challenges.

“The AWBC needs to remain open to change and adjustment if it is to stay in step with industry needs,” he said. “Our organisation is building a culture that embraces change, so that we can meet the fast moving agenda of industry. The future success of our market development programs will be measured by our reputation and image as a producer and supplier of accessible fine wine, greater awareness of our regions and diversity and demand for our wines at more profitable price points.”

At the start of the 2010–11 financial year it is anticipated that the four peak industry bodies will be operating under one roof in an open-plan setting. The bodies are currently in talks with The University of Adelaide — landowners of the current National Wine Centre site — about refurbishment of the existing offices to suit the plans. Alternatively, office space around the commercial fringe of Adelaide’s CBD will be sought.

“Due diligence is currently being conducted into a shared services platform to support the national industry organisations – we will integrate as far as is practicable and appropriate. This will help improve efficiencies in operations, but the real prize is unity of policy, direction and activities from vineyard to marketplace,” Cheesman said. “It is our aim to create a seamless, national operation that is operating, where appropriate, as one organisation.”

This article will be presented in greater detail in the forthcoming March/April issue of The Australian and New Zealand Wine Industry Journal and April Australian & New Zealand Grapegrower & Winemaker. To subscribe, visit www.winebiz.com.au or contact subscriptions manager Nola Brigante on +618 8369 9500 or email

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