Buying a WineryArticle by Richard Mackenzie We are seeing an uplift in enquiry in relation to wineries and it is essential if you are considering acquiring a winery that you take appropriate accounting and legal advice. I am being asked on a regular basis to find a suitable investment for clients and especially Chinese investors who are looking to eventually take up residence in Australia through primarily 188 and 132 Visa’s. What you really need to know before seeking your advice is what actually do you want in a winery, because that is obviously going to affect the price and your involvement. You could acquire the following type entities: 1. A home on several acres with an established vineyard. 2. A home with an established vineyard and a winery. 3. Vacant land with a vineyard and winery, or merely a vineyard. 4. A combination of these. 5. Would it be your intention to outsource the vineyard and have the wine from those grapes produced at an established winery with the final product coming back to you for you to arrange the sale here and possibly overseas, or alternatively do you just outsource and enter into a leasing arrangement in relation to an established vineyard being acquired and rely merely on the rental income being received. 6. Are you going to operate this vineyard yourself and have you the ability to make wine or are you looking to employ a suitable staff (or the existing staff) with the acquired business. Where do you want this winery to be? In Victoria, we have wine districts within an easy commute from the CBD and Melbourne Airport and likewise could be said of South Australia. Both have excellent wine districts. New South Wales is well represented by the Hunter Valley and other smaller areas, and Tasmania likewise has established winery districts. Western Australia’s Margaret River is well known, and Northern New South Wales and Southern Queensland have smaller wine districts. How much do you wish to spend? Like any business venture you will need to, with accounting assistance, ascertain what your return on capital is going to be if you take on such a venture. As you can see there is a real variety of scenarios that you have to consider and once you’ve made up your mind then we can assist you in relation to finding an appropriate winery asset in the district you prefer. You will then have to also consider whether the entity that is acquiring that business is going to be you personally or through some company or trust structure, so accounting advice at the same time needs to be sort. Richard Mackenzie has been involved in agriculture and the wine industry for many years and owns and operates four farming properties in the Victorian South Gippsland area. He acts for several of our better-known wineries and also has expertise and qualifications in horticulture and agriculture outside his legal expertise. He is able to assist you with the selection of a suitable property and also on your behalf negotiate the contractual and ancillary agreements in relation to your acquisition. If you are merely wanting to outsource wine production, we can also arrange that for you and further arrange the creation of your own label for such a venture. Feel free to contact him at our Melbourne practice on 03 8621 1000 or his mobile on 0428 319 980.