Swiss take lead in Australian wine battle

Peter Lehmann finds himself at the centre of a bidding war. Peter Lehmann Wines

The Bern-based food and wine group, Hess, looks set to swallow a big part of one of Australia’s best-known wine companies.

This content was published on October 3, 2003 - 16:51

The board of Peter Lehmann Wines has urged its shareholders to accept a partial takeover offer from Hess, thereby snubbing a larger offer from the British group, Allied Domecq.

"All Allied is interested in is case sales," Peter Lehmann, who is currently in Switzerland, told swissinfo.

"And from what I’ve heard about the Hess family is that they are caring people," he said.

"They are patient and their aims and aspirations – their philosophy – is the same as ours," he said.

Hess has offered A$3.85 (SFr3.48) per share for the iconographic South-Australian winemaker.

London-based Allied – which is responsible for brands such as Beefeater and Tia Maria - expressed “disappointment” and “curiosity” at the recommendation.

Lehmann, a sixth generation wine maker, founded the winery in 1979, quickly establishing a reputation for producing high-quality hand-made wines often compared to French Bordeaux.

Family roots

The 73-year-old has strongly opposed the Allied bid, which was set at A$4.00, because it was conditional on the British firm taking a 51 per cent stake.

The likely match-up with Hess, means the Australian winemaker is blending his company with a similarly family-oriented enterprise.

Switzerland’s Hess Group has roots dating back to 1844, when its founder, Johann Heinrich Hess, founded a brewery in Kirchberg, in canton Bern.

Even until recently, the family was run by the fourth-generation Donald Hess.

Alongside its wine business, much of it based in California’s Napa Valley, the Hess Group also has interests in restaurants and hotels.

And last year, Hess sold its stake in Valser mineral waters, one of Switzerland’s best-known brands, to the US giant, Coca Cola.

Life's work

Lehmann said his company produced around 600,000 cases of Barossa Valley wine per year.

“[Allied] would want us to go up to two and half to three million, and I can’t see that there are the resources to keep up the quality,” he said.

“So they would just want the Lehmann brand name, which is very strong, and compromise quality for quantity.

“It would break my heart to see a lifetime’s work disappear for the sake of cash.”

Lehmann said he did not see how Allied would take control of the company, given the “support pledged to me” by shareholders.

swissinfo, Jacob Greber in Zurich

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