How the Rich 200 invest: Doug Rathbone

The Australian wine industry has had a difficult few years but increased interest from overseas investors is providing sale options for wealthy owners of well-known wineries.

Several wine-making families have held places on BRW’s Rich lists over the years, including the McWilliam and De Bortoli families.

Several others have bought wineries after making their fortunes in other industries.

Like racehorses, wineries hold significant appeal as “lifestyle” assets, even in a bad market.

The chief executive and a major shareholder of crop protection business Nufarm, Doug Rathbone also owns the Rathbone Wine Group, a big business that controls the Yering Station (Victoria) and Xanadu Margaret River (Western Australia) wineries, among others.

In recent months, Rathbone’s wine interests have been put up for sale and several international buyers are believed to have considered buying them.

Yering Station alone is said to be worth about $50 million. The problem for Rathbone is that he has invested much more in this asset since he acquired it in 1996 and a sale now would lock in a loss.

Many of the offers that have come in for Rathbone’s wineries are believed to have been significantly below what he thinks they are worth.

Rathbone’s wealth has fallen considerably in recent years mainly as a result of the impact of the GFC and falling herbicide prices on the Nufarm share price. (It is down from $592 million in 2009, $392 million in 2010 and $273 million in 2011.)

Recent profit announcements at Nufarm suggest, however, that the bad run may by drawing to an end.

• Tweet