Avenue Vine

Evans & Tate chairman John Hopkins said the company was hopeful talks with grape suppliers would prove fruitful. "We're getting closer and closer to that supply balance," he said.

Mr Hopkins declined to say whether the company had renegotiated a $745,000-a-year grape supply deal with the company's deposed executive chairman, Franklin Tate, and his wife, Heather.

Mr Tate was even less forthcoming. "I know you are looking for a story. But I don't think there's any story in it," he said.

He declined to say whether he had renegotiated his contract to help ease the company's troubles. "The notion that there was an (attempt) to rip the company off is a fabrication," he said.

Mr Tate said his contract was "fair and reasonable" at the time it was signed in 2004, when wine prices were higher.

Apart from the massive write-downs in its inventory, which helped the company report $94 million in losses in the 18 months to December 31, Evans & Tate was also forced to sell 10 million litres of wine clogging its cellars late last year at 35¢ a litre.

The company has also put its Oakridge wine business in the Yarra Valley up for sale.

"It doesn't really fit within the strategy of a publicly-listed company," Mr Hopkins said.

This is in stark contrast to 2001, when Evans & Tate's then head Franklin Tate said Oakridge enhanced the wine group's access to new markets and fit into Evans & Tate's "long term vision for growth".

Since their peak in 2002, Evans & Tate shares have tumbled 90 per cent.

It is unlikely the Oakridge sale will put a significant dent in the company's $155 million debt, given the sale will only be for the Oakridge brand and inventory.

Originally purchased for $3.6 million in 2001, Evans & Tate now leases the Oakridge land, which it sold for $2.25 million in 2004. The company wrote down Oakridge by $4.1 million last financial year.

Despite announcing its plans to sell its Griffith, Mildura and now Oakridge wineries, Evans & Tate is yet to realise any money from the deals. It drew down another $12 million in debt in January on the hope it was close to selling off Griffith.

Mr Hopkins said the sale of the winery may not be finalised until June. There have been suggestions Evans & Tate will be lucky to get anywhere near $10 million for the Griffith winery.

The $22 million sale of the company's Mildura winery is contingent on the buyer — British wine distributor HwCg — successfully listing on the London Alternative Investment Market this year.

Source: “Winemaker's hangover lingers,” Scott Rochfort, The Age, March 28, 2006