BEYOND

EXPERIENCE • KNOWLEDGE • RELATIONSHIPS

VALUER&BROKEREdition 11 © August 2014

INSIDE · ASSET WATCH · CURRENT OPPORTUNITIES · REGIONAL PROFILE: GLOBAL

WINE

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ASSET WATCH

Ian, Wendy, Mel and Kate Hollick of Hollick Wines, recently announced a majority investment in their Coonawarra and Wrattonbully vineyard and winery operations, by Hong Kong based Yingda Investment Co Ltd., a division of the Shenzhen Guoneng International Trading Co. Ltd.(SGITCo) of China.

Gaetjens Langley is proud to have advised Hollick wines on the investment of capital, which forms a majority share of the business. The Hollick family will maintain a significant shareholding into the future and will continue to operate the business with existing staff.

Ian Hollick, who built the winery with Wendy, said the injection of capital from the Chinese group, would enable the family to continue “the proud tradition we have created here at Hollick wines”.

“The investment provides financial stability enabling us to look to the future with great confidence,” Ian said.

“It also provides significant distribution advantages for Hollick wines in the developing Chinese wine market, where SGITCo have operated for some time. We are delighted

HOLLICK WINES, COONAWARRA

AUSTRALIAN VINTAGE SELLS YALDARA WINERY FOR $15.5 MILLIONOn July 24th Australian Vintage Limited announced to the ASX the signing of binding agreements for the sale of the 10,000 tonne Yaldara Winery and Brand in the Barossa Valley. The off market transaction was negotiated by Toby Langley, who introduced the parties in April 2014. To achieve a successful outcome in such a short period is a credit to the principals and their advisors. Completion is scheduled to occur in the later part of 2014, after transfer of customary licences.

OUTLOOK 2014Gaetjens Langley is once again a proud sponsor of Australia’s Wine Outlook Conference which will be held in Adelaide on October 1 and 2. The theme this year is Taking Charge of the Future and as one of the guest speakers Toby Langley will address the issue of global competitiveness and how Australia stacks up against other wine producing nations. For information and registrations: www.wfa.org.au/activities/outlook-conference.

we can guarantee the jobs of our workforce, as well as the possibility of sourcing extra fruit to meet future requirements.”

The Chinese group is involved in hospitality and tourism, developing and owning a suite of five star hotels and some of China’s best tourist resorts, which include vineyard and winery operations.

The investment in the Hollick wine business will allow an interchange of staff with these vineyard and winery developments in China, providing new experiences for employees of both businesses.

“The new partnership will also continue the process of building the Hollick brand and concentrating on the values of family history, provenance, heritage, rarity, ethical responsibility and critical acclaim,” Ian said.

“The Chinese company’s confidence in the Hollick brand and the Coonawarra region is reassuring for many in Coonawarra.

“It’s very much business-as-usual and after the past few years looking down a tunnel with a dim light at the end, we are thrilled to see the sun.

“Everybody at Hollick is very excited about the future.”

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Check www.wineryforsale.com.au for more details.

CURRENT OPPORTUNITIES

Caves Road Wilyabrup Margaret River, Cellar DoorA unique opportunity has arisen to purchase a newly launched brand in a prestige location including an established vineyard and cellar door. The property is located in the much sought golden triangle of Caves Road Wilyabrup in the premium Margaret River region.

Key details include:• 9 hectares established vineyard on a 21 hectare site. • Newly renovated cellar door building with sealed driveway

and car park. • Good water supply from a lined dam.• Brand launched last year with sales continuing to grow.• Well run with independent management who can be retained if required.

Vineyard Portfolio Margaret RiverAn opportunity to be part of one of the largest vineyard aggregations in the premium Margaret River region. It is well run with independent management who can be retained if required.

Key details include:• Established, efficient vineyard aggregation with 431ML

water licences on 6 titles.• 129 hectares mature vineyard on 200 hectare site.• Substantial building improvements with 3rd party rental income.• Wine supply agreements in place for total production.

Heathcote Winery, Victoria• An investment opportunity in a super premium

winery in the heart of one of Australia’s premier cool climate shiraz regions

• Established in 1978• 13.7 hectares on 2 vineyards• 8,000 case sales

• Lucrative cellar door and mail order business• Established distribution in Australia with Negociants Australia• Gallery/café and apartment adjacent to winery and cellar

door complex in the main street of Heathcote including 240 tonne winery.

• One hour from Melbourne airport

Escarpment Vineyard Martinborough, New ZealandThe Escarpment vineyard is located in Martinborough, north of Wellington, and is one of New Zealand’s most revered producers of Pinot Noir.

The major shareholder in Escarpment, the Melbourne based Kirby family has decided to offer for sale their shares in this extraordinary and visionary pinot noir producer.

Schild Estate, Barossa ValleyEquity partner sought to join the renowned Schild Estate, est in 1998;

Key features of the business include:• Annual sales of 50,000 doz per annum with a focus on Barossa Shiraz.• Lyndoch Cellar door opened in 2000 and purpose built winery

constructed in 2010. • Portfolio includes Estate Shiraz, Ben Schild Reserve Shiraz and Limited

Release Moorooroo Shiraz.• National distribution and strong exports to the United States.

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In an industry which celebrates the shift from bark to aluminium screwcap as its biggest innovation in the last 20 years, there is at last a new breed of Australian wine entrepreneurs and risk takers emerging in the second decade of the 21st century.

These true innovators are responding to dynamic changes in consumer demand, they are building on the strength of their brand and in doing so, they are creating a more valuable (and saleable) long term business asset.

“These new diversifiers” have looked at their idle commercial infrastructure – tanks, pumps, filters, refrigeration, barrel halls, bottling lines and cellar doors – and seizing upon their accumulated marketing knowledge, have decided to develop products which are “beyond wine”.

The Australian’s wine writer Max Allen might have been the catalyst for at least one of these innovations.

Allen went on a mission to flush out the best boutique ciders in this country (anything without the word Strongbow in it) and found an emerging range of local and imported artisan scrumpies. He argued that cider had many of the same qualities as wine – varietal fruit based, natural, depth of flavour, aromatic, alcoholic and diverse in style from cloudy to clear, still to sparkling. It also offered a nice refreshing alternative to chardonnay or sauvignon blanc.

Within months some wineries responded to this public discussion using their knowledge of fruit fermentation and alcoholic beverage product development to enter a new market.

Australia’s most famous shiraz region inspired some ingenious brands: David Franz Lehmann, son of Barossa wine legend Peter, made a grape and apple Golden Scrumpy; Kellermeister developed its very popular Boots Cider made by its former winemaker Trevor Jones; and Oscar and Hugo Bowen (sons of Balthazar’s Anita Bowen and former Wolf Blass executive Randolph) last year launched Squashed Apple Cider from their Barossa Valley Cider Company. There is also McLaren Vale’s Ekhidna Wines turning their hand to cider (as well as beer and ginger beer) and Oakvale, one of Hunter Valley’s oldest wineries making a sparkling apple and pear cider.

Of these winemakers turned cider brewers, one of the most authentic is Punt Road.

The Napoleone family arrived in Australia in the 1920s and after World War II planted an

BEYOND WINE Stephen Strachan and Toby Langley

apple orchard at Wandin in Victoria. Their Red Rich Fruit Company became one of the biggest producers and wholesalers of stone and pome fruit in Australia which provided the cash for the family to purchase the old St Hubert’s vineyard in Coldstream in the Yarra Valley in 1987.

They built a winery in 1999 and started selling the now very successful Punt Road wine range in 2001. Naturally enough as orchardists they also adapted quickly to the idea of alcoholic apple juice and Napoleone Cider seemed an obvious addition to their wine range. It is a serious cider – family grown Granny Smith, Pink Lady, Fuji and

Sundowner apples providing a balanced flavour (with no juice concentrate) and fermentation kicking off with a Rhone Valley white wine yeast.

ULTIMATE DIVERSIFICATIONGiant Steps/Innocent Bystander is perhaps the ultimate winery diversification phenomenon in Australia. Created by beverage entrepreneur Phil Sexton, a trained brewer who starting Perth’s Matilda Bay Brewing Company and Devil’s Lair winery in Margaret River in the 1980s, before selling the brewery to Fosters and the winery to Southcorp, Giant Steps ticks just about every consumer box.

Giant Steps is true to its ambitions to make super-premium pinot and chardonnay in the cool climate Yarra Valley region. But with a glass of pinot gris or sangiovese you can also sample sourdough breads from the artisan bakery, mix that with cheese (made by winemaker Steve Flamsteed who studied farmhouse cheesemaking in France) or enjoy the company’s own Innocent Bystander on-site roasted coffee blend.

And to complete the circle you can enjoy an Innocent Bystander moscato, at about the same

alcohol level as beer but twice as pretty (and served sparkling direct from keg to tap). It’s made from virtually worthless Gordo and Black Muscat, doesn’t see a whisker of expensive oak and turns cash flow so fast it must make Sexton’s head spin.

Across the other side of the country James Clarke, who worked in marketing roles with Evans and Tate, Pipers Brook and Sandalford and his boutique distiller mate Paul White, have created another “beyond wine” brew, West Winds Gin which blends local and imported botanicals. They have utilised the skills of an experienced spirits marketer Jeremy Spencer (ex Brown Foreman

and formerly of Woodford Reserve and Appleton Estate Rum) to create The Tailor Made Spirits Company. West Winds has already won gold at the 2011 and 2013 San Francisco International Spirit Awards and is well established in the bar and independent liquor scene.

And if you think this artisan gin is just a bit of fun by a few winemakers who like a crisp G&T, think again. McLaren Vale’s Salopian Inn, now run by winemaker Elena Brooks and chef Karena Armstrong, stocks no less than 168 gins from the UK, US and Australia – and that is right in the middle of one of our most famous red wine regions.

But diversification is not just about the clear spirit.

As demand for the beers our father’s drank (VB, Crown Lager, Tooheys, West End) declines, Australians seem to have a tirelessly growing thirst for exotic craft beers.

There’s Pike’s Oakbank Beer which has a track record going back to the 1860s when the family were brewers and cordial makers; next door neighbour Clare winery Paulett’s Last Minute Bitter; Knappstein’s Enterprise Winery and Brewery, also in Clare (and supported by

GIN ON THE RISEWhile gin has been around since the Middle Ages, recent data shows it has enjoyed a renaissance in Australia over the last five years.

Roy Morgan Research’s latest report shows that in 2009, 636,000 Aussie adults drank gin in any given four-week period — but by 2013 this figure had grown by almost 50% to 947,000. While slightly more women (483,000) than men (464,000) drank gin in 2013, the spirit’s popularity has risen almost equally among both genders. Men accounted for 49% of gin drinkers last year, just as they did in 2009.

Furthermore, gin’s popularity is growing among all age groups. Whereas 91,000 18-24 year olds drank gin in an average four weeks during 2009, this figure had surged to 175,000 by 2013 — a 92% increase.

The number of gin drinkers aged between 25 and 34 also shot up during the same period, from 126,000 to 205,000.

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Lion Nathan) and Willoughby Park Winery and its Boston Brewery in Denmark, WA.

There is also the Barossa Valley Brewing Company in Tanunda, Vale Ale in McLaren Vale and Bluetongue in the Hunter Valley (which local winery Tyrrell’s was involved in), leveraging the strong brand names of their regions and banking on the consumer desire for a cleanser after a day of tasting Shiraz.

What do all of these projects have in common?

These winemakers are recognising that while they still love the excitement of vintage and the mysteries of an aged pinot, the consumer’s interest in wine is not endless.

With 9 out of 10 wineries failing to make a profit in Australia in the last few years and with retail monopolies cramping distribution, winery owners have decided that the only way they might ever capitalise on their vast investment and retire with enough cash to count, is to listen to the customer and add value (and a diversified product or two) to what they have.

DESTINATION BRANDINGFour Pillars Gin is one of the newest diversification products birthed from a wine gene bank. Partner and marketing director Cameron McKenzie is no newcomer to left field thinking, having cut his marketing teeth at Punt Road and Innocent Bystander/Giant Steps.

According to Cameron the greatest contribution new product development can make to a winery, is to build a destination brand.

“Innocent Bystander is the benchmark for winery diversification in Australia,” Cameron says. “It’s a mecca for Melbourne visitors but it is also a destination for locals who know that Thursday nights and Saturday mornings are the time to drop in and grab a coffee or a loaf of sour dough before the tourists turn up.

“But it hasn’t happened by chance. There was a meticulous strategy from the start that has been followed painstakingly in every detail: from the quality of the coffee to the freshness of the bread to the customer experience at the restaurant table.

“There has also been a huge commitment to marketing, which I think some wineries overlook in their excitement about making wine.

“It’s something I learnt from Phil Sexton that investing in the brand is as important as funding the product.

“With Four Pillars we allocate as much of our budget to marketing, as we do to production.”

Cameron and his partners chose gin after initially thinking about a craft tonic water mixer. Then their research revealed a huge boom in the UK and USA in craft spirits.

As the whisky niche had been filled by Tasmanian distillers such as Lark, Sullivan’s Cove, Hellyer’s Road and Nant, they decided on what appeared to be a simpler proposition – the drink of choice in 1700s London, juniper infused 38% white spirit.

Four Pillars imported the first CARL copper pot still from Germany that had entered the country for several generations and started making their gin using Australian and Asian botanicals –

cinnamon and star anise, lemon myrtle, cardamom and pepper berry – as their point of difference.

As with all new business adventures the devil was in the detail – like the outrageous $25 excise charged on every $70/bottle which has to be paid weekly on sales, and the expense of setting up a bonded distillery.

“The tax on spirits is huge,” Cameron said. “Cider is more appealing because it attracts WET in the same way that wine does...and it makes the accounting easier.

“But there are already a lot of ciders on the market and there are a lot more private label ciders appearing – from big retailers, catering companies, hotels.

Their latest investment is a building near Healesville which will house their distillery along with a craft spirit cellar door and tourism complex over the next year – turning them into a destination brand.

“We work off each other in the Yarra,” Cameron said. “There is lots of diversity with Punt Road and its Napoleone Cider, Innocent Bystander, the TarraWarra Museum of Art and the Yarra Valley Chocolaterie (which is a hit with kids - you have to keep kids happy).

“There is already a balance between pure wine cellar door experience and other attractions, and we hope Four Pillars will add a luxury craft spirit experience to the mix.”

Like all new projects, will we see a flood of new gins cluttering the market following Four Pillars courageous lead?

“Craft spirits are where wine was 20 years ago,” he said. “So yes we expect to see more gins.

“It’s a risk, but it’s a risk doing nothing – there is just so much wine on the market that the point of excitement about new wine labels seems to have passed.

“We want to get our brand well established before the next wave of innovators catches up.”

“THE IMPORTANT THING ABOUT CRAFT SPIRITS, IS THEIR POINT OF DIFFERENCE. AFTER MARKETING WINE FOR 10 YEARS IT IS A LOT EASIER TO START A CONVERSATION WITH A RESTAURATEUR ABOUT PREMIUM GIN THAN YET ANOTHER BOTTLE OF PINOT OR SHIRAZ.”

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GLOBAL PROFILE Stephen Strachan

MARKET FOR THE EFFICIENT AND BRAVE World wine markets are characterised by a complex interplay between producers and consumers, changing value-chain dynamics and the vast differences between demand for commodity or commercial wine and demand for luxury products.

The laws of supply and demand apply, but so too do a range of other factors that are difficult for economists and analysts to predict. Why else would vineyard values vary so dramatically?

The table below is reproduced from the Knight Frank Global vineyard Index 2013 and illustrates the vast range of vineyard values world wide.

The Barossa is the only Australian region that rates a mention, and is probably seen by outsiders as indicative of Australia. In reality, the Barossa outperforms every other Australian region at present on vineyard valuation on a like-for-like basis (excluding other factors that drive purchasing decisions, such as proximity to capital cities for lifestyle investments). The maximum value in the Barossa has been tested over the last 12 months or so, with at least one sale at $100,000/ha, and speculation that the Torbreck acquisition of the Gnadenfrei vineyard was in excess of $400,000/ha, albeit for a relatively small vineyard.

There are a few clear take-home messages from a glance at these values.

Firstly, celebrated regions such as Bordeaux see a massive divergence in values – and this is hardly surprising for a region with a vineyard area almost as large as Australia’s. Wines sold (and vineyard valuations) from a First-Growth vineyard in Medoc may attract stratospheric prices and all of the media headlines, but the reality for a vineyard in Entre-Deux-Mers is vastly different and probably on a par with the majority of Australian vineyards at present. Unlike the Australian industry, the French are very good at only highlighting their successes and ignoring the rest, notwithstanding the fact that the ‘rest’ is the vast majority of their industry.

The second take-home message is that the Australian category is underweight on vineyard values compared with most of our counterparts. The Barossa is the Australian industry’s star performer at present, yet top-end values bear no resemblance to those achieved in Bordeaux, Tuscany or Napa Valley. Most Australian vineyards that have traded over the last few years have been below $50,000 per hectare, and for many, below $25,000 per hectare.

There is no shortage of wine in the world. The reality is that there is a shortage of wine that consumers want and a surplus of wine that consumers want less – the same applies to vineyard values. The old

saying that a man with his head in an oven and his feet in the freezer is, on ‘average’, about right, was surely written about the world of wine.

Parts of Bordeaux, Marlborough, Napa Valley, Barossa Valley and Tuscany are ‘hot’ at the moment. But for every success story in these regions or elsewhere, there are plenty of others with ‘their feet in the freezer’ having a pretty tough time. And regrettably, the majority of the Australian category is in the freezer at present. If ever there was a lesson in vineyard economics, it is now. Strong brands, good business models, balance sheets, and above-all, a commitment to achieving excellence in the vineyard are the reasons behind the stratospheric vineyard valuations across the globe. For the rest of the industry, anywhere in the world, if you don’t have these characteristics, you are a ‘price-taker’ and had better get ready to buckle in and accept the vagaries of international supply and demand shifts and currency movements at a minimum, which are completely out of your control.

‘EXCESS-SUPPLY’The emergence of the ‘New World’ as a prominent producer of wine internationally has aided a shift to country and varietal brands. At the same time though, the constant ‘excess-supply’ in the market has given retailers the opportunity to ‘cherry-pick’ between similar categories, thus commoditising the lower-priced section of the market and reducing the power and prominence of brands. These days, wine is traded freely between markets, with bulk wine sales almost outstripping bottled wine sales from the New World (The Incredible Bulk, Rabobank, January 2012).

Wine production internationally remains dominated by the European powerhouses of France, Italy and Spain, though all are overseeing production declines as their own internal wine consumption drops from exceptionally high levels of a decade ago.

Source: Knight Frank Global Vineyard Index 2013

INTERNATIONAL VINEYARD COMPARISONS

VINEYARD VALUES $/ha (range)

Minimum Maximum

Mendoza, Argentina 30,000 100,000

Tuscany, Italy 135,000 200,000

Hawkes Bank, New Zealand 130,000 170,000

Colchagua Valley, Chile 30,000 70,000

Napa Valley, US 135,000 588,000

Barossa, Australia 30,000 80,000

Piedmont & Lombardy, Italy 202,000 1,200,000

Ribera De Duero, Spain 40,000 50,000

Bordeaux, France 20,500 2,500,000

Western Cape, South Africa 4,000 600,000

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Concurrently, New World production increases, driven by Australia, South Africa, Chile, the US, South Africa and Argentina, are adding to global supply and ensuring that the marketplace has ample choice.

Prior to 2013, global supply had been easing on the back of shorter harvests in Europe in 2011 and 2012 and in the US in 2010 and 2011. At the time a few analysts were showing some concerns about wine shortages. In fact, a report released in October 2013 by Morgan Stanley predicted that the world was ‘running out of wine’ to great fanfare. This proved to be premature and inaccurate, and there was ample evidence at the time to dispute the claim. We have seen production increases in Europe in 2013 and in the US in 2012 and 2013. Overall, 2013 in general

saw production increases in most major producing countries marking the end of the possible emerging wine shortage. Looking forward, Rabobank expected the carryover of higher global stocks from 2013 to result in a more competitive market environment in 2014. Shorter crops in Argentina and Chile in 2014 may negate pressure to some extent; however Australia, South Africa and New Zealand have all had healthy 2014 crops. Of course, the prognosis for the vintage in the northern hemisphere in 2014 is uncertain and will be for a short time yet.

The US wine market is now the largest wine market in the world, and bulk wine prices into the US are a strong indicator of global market dynamics, particularly for commercial wine categories.

The indicators for bulk wine sales in the US market are generally down or neutral, with Californian Cabernet Sauvignon and most wine from Chile and France being the notable exceptions.

US inventory balances have recovered from their ‘short’ position and are now heading back into a ‘long’ position, though far from chronic, as can be seen in the table below.

NET INVENTORY BALANCE2010 12% 2011 -4% 2012 -10% 2013 3% Source: Silicon Valley Bank Proprietary Research

CONCLUSIONS‘Premiumisation’ or ‘trading-up’ or ‘quality improvements’ have been discussed in the Australian wine category for many years. And while, aspirationally, it makes sound sense to implement initiatives to improve returns for the wine being sold, and ultimately for the valuations of the assets, there are too few that are actually demonstrating a result from this focus.

The commodity or commercial wine marketplace is getting more competitive, not less. Australian businesses have proved adept at maintaining market share in this category and there is no reason to think that that will change anytime soon. However, with the Australian currency remaining strong and international bulk prices easing, this market is really only for the efficient and the brave. Opportunities in this category clearly exist, and there are some notable success stories, but for an industry that remains fragmented in large part, consolidation will inevitably continue.

For the majority of the Australian category, opportunity will come from brand building – whether it is a proprietary brand or a regional brand. In the meantime, excess supply from Australia will continue to jeopardise brand-building prospects, as the Australian category (whatever that is!) continues to condition consumers and the retailers to good quality wines at low prices.

Source: OIV

WINE PRODUCTION (ML)

GERMANY

ARGENTINA

CHILE

AUSTRALIA

SOUTH AFRICA

10,000

13,000

12,000

12,000

11,000

11,000

11,500

6,000

9,000

6,000

CHINA

SPAIN

US

ITALY

FRANCE

13,000

40,000

21,300

43,000

42,000

10,000

41,000

21,300

52,000

57,000

WINE PRODUCTION 2013WINE PRODUCTION 2000

CIATTI BULK WINE PRICES: MARCH 2014 ($US) / LITRE

Australia & NZ Argentina Chile California France South Africa

Generic White 0.47-0.71 0.37-0.39 – 0.69-0.75 0.66-0.85 1.09-1.16 0.43-0.47

Chardonnay 0.47-0.71 0.65-0.85 – 1.00-1.45 1.05-1.32 – 1.23-1.30 0.56-0.68

Sauvignon Blanc0.71-0.853.74-4.41 (Marlborough)

0.85-1.15 1.12-1.23 1.12-1.23

Pinot Noir 1.72-2.11 –

Syrah 0.80-1.03 0.65-0.85 – 1.19-1.45 – 1.02-1.05

Cab Sav 0.80-1.08 0.65-0.85 – 0.61-4.00 – 1.45-1.98 – 1.02-1.09 0.64-0.75 –

Malbec 0.90-1.00 – 0.75-2.00

– denotes trend Source: Ciatti Global Market Update – March 2014

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www.wineryforsale.com.au

Gaetjens Langley185 Fullarton Road, Dulwich, South Australia 5065

PO Box 722, Kent Town, South Australia 5071Telephone: +61 8 8364 5600 Facsimile: +61 8 8364 5622

Email: info@gaetjenslangley.com.auABN 64 471 514 369

Gaetjens Pickett Valuers 185 Fullarton Road, Dulwich, South Australia 5065

PO Box 146, Kent Town SA 5071Telephone +61 8331 1633

Facsimile: +61 8 8364 5622Email: info@gpvaluers.com.au

ABN 90 791 710 106

KEN GARGETT IS ONE OF AUSTRALIA'S LEADING WINE WRITERS, CONTRIBUTING COLUMNS TO THE BRISBANE COURIER MAIL, HERALD SUN, GOURMET TRAVELLER WINE AND CRACKAWINES.COM.AU. HE IS AN UNASHAMED LOVER OF THE GOOD THINGS IN LIFE: CHAMPAGNE, CIGARS, FISHING AND TRAVEL. ON A RECENT TRIP TO EUROPE HE RAN INTO A MAN AFTER HIS OWN HEART, OUR OWN COLIN GAETJENS. THIS IS THEIR STORY..."Caught up with Colin Gaetjens in Paris to head across to the Mosel. Needless to say, at least to those who know him, he would be doing the driving and navigating. After forgetting what side of the road he was supposed to be on about 18 times, and over-correcting about 18 times, we finally come to a large flowing body of water.

“That would be the River Something,” he proudly announces. Marco Polo couldn't have put it better.

We finally reach the winery of Egon Muller at the appointed time (or thereabouts). Egon after a long drive has a group of 20-something sommeliers from all over Europe with him and they are about to climb one of the world's steepest vineyards, Wiltinger, and drink some 20-year-old Auslese at the summit. Would we be interested?

"Absolutely”, declares Colin, adding that he'd show these young whippersnappers a thing or two (yes, he does talk like that). Off we set. What seemed a very long time later, we emerge from the vines at a ledge running along the top – so we thought. Sadly, this ledge is about a quarter of the way up. Sir Edmund Gaetjens throws in the towel.

"All too much. Don't have anything to prove to these young whippersnappers", most of whom are now little more than dots on far distant slopes.

I tell him I'll see him later. No, he demands, you have to help me down. Some days just keep giving."But not here. Too steep.""Where isn’t?""We'll find somewhere."We don't.

So we set off down a slope that would embarrass a mountain goat. I keep seeing newspaper reports declaring that one of Germany's prized vineyards was today destroyed by two fat Aussies, avalanching down it.

Meanwhile, Egon has skipped back down the slopes to assist. We finally get back to earth. Egon suggests that perhaps we'd like to drive up (seriously? We could have done that in the first place?). So we head around and up the backroads.

By the time we get there, the somms are all guzzling Auslese. Inevitably, we cop merry hell from them (deservedly so). Australia's good name took a fearful beating that afternoon. While I am running around trying to convince them all that Gaetjens is actually a Kiwi and nothing to do with us, he takes a turn for the worse. Slumps against a vineyard wall. Everyone rushes over to assist (some people will do anything to be the centre of attention). He has, in truth, gone whiter than a KKK AGM and really does not look good. He can't speak (silver lining?). We carry him across to the car and lie him down. Everyone is trying to work out if we can get an ambulance up to the summit or where the nearest hospital is (well, perhaps not everyone. I’m wondering if his wife knows he brought a suitcase of '99 Burgundies with him and if she'd notice if they went missing).

We manage to drive back to the winery, give him a reviving drink and within minutes he is arguing, complaining, directing everyone around, abusing the GPS machine because places are not where he believes they should be and generally giving a critique of the shortcomings of everyone else on the road – in other words, back to his old self.

In his defence, it was extremely steep and he is old, fat and unfit.

We have put down his unexpected grumpiness to the fact that he forgot his Vegemite and as anyone who witnessed 'the Madrid incident' knows, Gaetjens and his Vegemite are not easily parted.

For those not in the northern hemisphere that fateful day, our hero arrived at the Madrid airport for an internal flight, dressed in his prize blue pork pie hat (who travels with a different hat for each day of the week?).

He had with him, in his hand luggage, a tube of Vegemite. The unsuspecting woman at Spanish Customs advised him that she was confiscating it (under the 'no paste' rule – or possibly the 'good taste' rule). She was advised, in return, that she was not. Chaos followed and within minutes, a crowd of, without exaggeration, 400 bemused onlookers had gathered to witness the battle.

Our hero first regaled the poor woman with tales of the glories of the slime and hence why he should be allowed to take it with him – she had absolutely no idea what it was or what it could be used for but she was not buying this myth that anyone would be so insane as to actually try eating it. When that didn't work, Colin tried identifying the shortcomings of Spanish Customs. That worked about as well as you'd expect. He then moved on to his personal thoughts on Spain itself. As far as I could work out, Spain's greatest crime was... not being France.

Eventually, telling them that this wasn't over, Colin abandoned his Vegemite (to be honest, it pretty much was all over by then). For the next hour in the airport, I watched little children duck behind the legs of adults to hide when they saw him coming and I am convinced that Spanish parents now put the fear of God into their kids by telling them tales of how the man in the weird hat will come for them in the night if they don't behave.

On a more serious note, back in the Mosel, Egon wanted to do a comparison of one of his wines – 2011 Scharzhofberger Spatlese – under screwcap and cork. No prizes for guessing which looked absolutely scintillating and which looked very reserved, and a touch dull.

But the highlight of the day came, when in mid tasting (we were outdoors), Egon fired up a big cigar. Imagine what the need-a-cause, rent-a-mouth crowd would say about anyone doing that back home.

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