Luck and good judgement

Felicity Murray talks to managing director Reschke Wines about luck, polo and fine Coonawarra wine

Burke Reschke Reschke Wines

Felicity Murray talks to managing director Reschke Wines about luck, polo and fine Coonawarra wine

In just 10 years he has developed a range of niche wine labels with growing international acclaim. And his driving ambition to produce the best wine in Coonawarra – one of Australia’s finest wine regions for Cabernet Sauvignons in particular – could be close to being achieved, judging by Robert Parker’s comments on the Reschke top of the range wine Empyrean: “If you see it, do not hesitate. The 2002 and 2004 Empyrean Cabernets may well be the benchmarks for Coonawarra Cabernet.”

“Everyone says you make your own luck but I don’t actually believe that anymore, “ says Burke,  “the way the label is going it must be more good luck than my good management.” 

But good management there has clearly been in the setting up of this family wine business. Burke’s futures trading background has clearly stood him in good stead for he has successfully turned his passion for fine wine into a reality by structuring and financing the business on a low risk strategy and employing one of the best talents in the world to help him create the wines – Peter Douglas, formerly chief winemaker at the Wynns Coonawarra Estate.

Burke’s father planted the first vineyards nineteen years ago in 1989, which was between college years for Burke, on part of the estate that his family have been farming cattle for over a century. As a reflection of this heritage, the Reschke wine labels bear the logo of a bull. “But cattle farming in the heart the Coonawarra region is akin to having cattle in the best winegrowing regions of Bordeaux ,” explains Burke. “So given the value of this land for viticulture it was inevitable that sooner or later we’d be doing something with grapes. “
A few more acres were planted by his father while Burke was at college but when his father realised just how much work was involved and how complicated the business was he insisted Burke stayed home and took over the running of it.

“Hence I decided to buy the land from my father and increase the planting from 50 to 240 acres,” he says, “However, this was at the height of the market and I knew there were be downsides, but being in the securities industry I had a fair idea what these were and how to minimise the risks.”

Burke ended up leasing half the vineyard (116 acres) to Constellation Wines Australia, which was then The Hardy Wine Company.

“In hindsight this was a fantastic deal for us,” says Burke. “Hardys took the grapes - so we had both a management fee and a lease fee. That meant if we produced four tonnes to the acre, it worked out at about Aus$1,375 a tonne. That structure made us very safe because it covered the cost of developing our side of the vineyard so every tonne of grapes we produced was profit. We were therefore able to take a few more liberties with our wines and spend that little bit more time and money on perfecting them.”

Private bankers in Sydney invested in the next part of vineyard. We took the wine through to grapes for the investors who took a fee based on costs but this meant we had to get the wine through to a wholesale price above Aus$9. Above that we got a good percentage of 40 per cent while the investors took the first nine dollars and 60 per cent thereafter. This again was low risk for us and has allowed us to grow without a lot of initial capital into one of the largest family-owned vineyards in Coonamarra in a very short time.”

The vineyards now cover 360 acres and produce primarily Cabernet Sauvignon grapes.
 
“We had a stroke of luck,” claims Burke, although good judgement seems to have also played a large part in his life.  “The first wines were made by Martin Williams MW in 1998 from the old block planted by my father in 1989.

“It was matured in new French oak so we spent a lot of money on that first wine and we could not believe how well received it was. The next vintage was Emporium 2002. We only produce it on very good years and then only about 300 dozen bottles. The 2004 wine looks fantastic and 2005 will be interesting to see. We’re hoping to bring the production up a little bit but it costs a lot in Australia to do that because the more you spend on the wine the more taxes you pay and there’s a ‘stock holding tax’ to be paid every year you keep it.

“We’ve grown to 10,000 cases and we hope to double this to 20,000 in the next two years across all the markets – it’s quite a small production but its good for boutique.

“International distribution for Reschke wines is impressive for such a small producer. The brand has just pulled out of the States while looking for a new distributor, but it is doing well in Canada and although growth is slow in Singapore, Hong Kong “looks like its going to explode” according to Burke.

“We are with one of the biggest importers and with the recent tax drop to almost zero it is becoming a big market for us.” The wines are soon to be distributed in Japan, Denmark and Poland, and have just been launched into the UK through H&H Bancroft where they already have some impressive listings.

“I’d like the UK to be a big market for us’” he says. “Australia is now recognised as capable of producing top end wines that rival the best in the world, so it will be easier for me to tap into this market now that the work has been done. Five years ago I was told by Berry Bros that you couldn’t sell Australian wine at £40 a bottle. And if Berry Bros couldn’t then no one could.”
To mark the launch into the UK, Burke chose to sponsor a sport and like many wine and Champagne brands he chose Polo. 

Why Polo? “I guess the farming roots and because a lot of my friends play. I’ve long been a fan of the game,” says Burke. “We started off by sponsoring the Melbourne Cup with a few bottles of wine as prizes. It was good coverage for very little outlay. Then Last year Reschke Wines sponsored the annual Audi Polo Awards held at a Park Lane hotel in London with a gathering of around 400 dinner guests to honour world’s best players. Each player was awarded a bottle of Empyrean.

But the main event was in July this year when the Australian polo team met the England team to compete for the Coronation Cup in this year’s Cartier International Polo tournament. This annual event, which is supported by the Royal Family and held at the prestigious Guards Polo Club in Windsor Great Park, attracts over 25,000 spectators. “We were only sponsoring the members hospitality tent with cases of wine so it was not a big thing we were doing but I was nevertheless invited to the Royal Box to have lunch with Prince Charles. It’s about how my life’s been going – I’ve been so lucky.”

But most of what Burke calls “luck” has really been down to his good judgement. He was lucky however to have survived a horrendous car accident five years ago.

“I guess I’ve had a few set backs and one of them was the car accident,” he admits.

“It was just after dark one evening over the Easter weekend when I slipped off the dirt road between the office and the vineyard and hit a tree.”
Not so lucky. Fortunately his neighbour heard the crash from 2km away and drove round to find Burke standing in the road. “He did not recognise me, I’d smashed my face up so much,” recalls Burke. He also had two badly broken legs and four broken ribs.

“I was in hospital 10 days but I was determined to carry on with my life and so I started work on budgets the second day I was out – although I can’t have been thinking too clearly as, looking back on them, they didn’t make a lot of sense.

My legs are pinned and wired, and I wore an eye patch for three and a half years. I’ve had 11 operations so far on my knee and seven on my face, six of which have been full ‘face-offs’ to realign all the bones. I’ve one more of those to go to get my face perfectly straight.

“Amazingly it hasn’t impinged on the company too much. It has impinged more on my personal life than work life. If anything it has probably made me more driven.”

Burke is certainly determined that this “set-back” will not stop him enjoying his life to the full. “I want to prove the doctors who said I’d never run again wrong – as a good friend of mine said ‘I’m not going to die wondering’.”

CV
91-92 post graduate student in Advanced Agribusiness at the Royal Agricultural College, Cirencester, England.
93-99 trader on the London International Futures Exchange
95-96 trader on the Sydney Futures Exchange
94 and 96-97 ran a trading booth in the Standard & Poor pit at the Chicago Mercentile Futures Exchange
97 returned to Coonawarra to develop the wine business.

The three labels Burke is most proud of are:
Empyrean - meaning “the highest sphere in which the purest elements of life exist” is the flagship and only produced in limited quantities. A Cabernet Sauvignon matured for 20 months in new lightly toasted French oak barriques. Will cellar for 10 years. (UK RRP £44.95)

Bos  - Latin for bull. A Cabernet Sauvignon  matured for 18 months (including malolactic fermentation) in oak French and American barriques and hogsheads (UK RRP £17.25)

Vitulus – Latin for bull-calf. A Cabinet Sauvignon from the younger vineyards and barrel matured for 13 months (UK RRP £11.50)
Also in the range is Bull Trader Shiraz and Bull Trader Merlot, both matured for 20 months in oak, and a Fumé Sauvignon Blanc.

1 June 2009