Torbreck spat leaves bitter aftertaste

The bitter split between Dave Powell and the owner of the winery he founded, Torbreck Vintners, is the talking-point of the moment. Torbreck is an iconic Barossa Valley winery Powell founded in 1994 (tastings). He built Torbreck from nothing to a world-renowned brand, selling blockbuster Barossa reds with prices at the highest end, crowned by The Laird, which commands $900 for the 2008 vintage, exceeding the likes of Penfolds Grange and Henschke Hill of Grace. It has scored a perfect 100 points from some overseas critics. Torbreck’s other top-priced wines Runrig ($290), Les Amis, The Gask and The Steading have big red lovers queuing around the world. They are very full-bodied, powerful, super-ripe wines with high alcoholic strengths, which have impressed American critics such as the man once regarded as the world’s most powerful critic, Robert Parker.

Powell will no longer be associated with Torbreck, whose owner since 2008 is American investor Pete Kight. The way Powell tells it, he did not exercise his option to buy back shares in time, and found himself without any value in the company. Kight then offered him a job selling Torbreck wine as a commissioned employee, and Powell declined the offer. Powell says he’s been left with nothing, and is driving a borrowed car and living in a friend’s house rent-free. He may have to file for bankruptcy.

In fact, Powell – whose name is synonymous with Torbreck – has not had a significant holding in the business for many years. Following Powell’s divorce, the company went into receivership in 2002 and Sydney businessman Jack Cowin (of Hungry Jack’s fame) took a majority shareholding. In 2008, when Cowin sold out, American billionaire Pete Kight, who also owns a winery in the US, bought it for around $20 million.

Powell refers to Kight as a friend but the relationship has soured spectacularly. As Powell tells it, his fatal mistake was to sign a deal five years ago that he didn’t realize could result in him losing the company he’d spent nearly 20 years building. He has told people he was tricked into losing the company, but the story is complicated and Kight’s version differs markedly from Powell’s.

After splitting from Torbreck in July, Powell circulated a scathing open letter to friends and associates in which he attacked Kight and the way he’d been treated, virtually saying he had been robbed of the company he’d built and which he hoped to hand on to his children as their inheritance.

Kight, who lives in Palm Beach, Florida, was at first reluctant to challenge Powell’s story publicly, but broke his silence because he claims Powell’s story is almost entirely fiction. He describes Powell’s stance as ’self-induced victimhood’.

“The whole premise of Dave’s letter, that I took something from him, is demonstrably wrong,” he told me by email last week. “Dave owned no stock in Torbreck at the time of my purchase. Other than the (single) share I gave him, Dave owned no stock after my acquisition of Torbreck: so how can some mystery clause in the agreement ‘take’ ownership from Dave? Dave lost Torbreck long before I got involved, he’s simply been telling people he owned Torbreck all along. I know he’s embarrassed that he’s been publicly lying about his ownership for so long, as he and I discussed it, but even in admitting it he blamed me for his embarrassment.”

It’s hard not to feel sorry for Powell, as he has poured his heart and soul into Torbreck for 19 years, but stands to end up with nothing. It is a tragedy. But he’s not the first creator of a significant winery who lost control of it. It’s usually money that brings them undone: often, a public float or other capital-raising leaves them with diluted ownership and power. Some of them have been kicked out.

Powell is a big-talking, larger-than-life character, a rough diamond, but he has many friends. Even those who don’t like him respect what he’s done for the Barossa Valley, and respect the fact that he’s built a great brand which attracts a lot of attention to the Barossa and to Australia. And that he’s championed the growers and their old vineyards and paid top dollar for their grapes – up to $20,000 a tonne for The Laird grapes.

But he lives high – possibly beyond his means: Kight says he’s advanced Powell up to $3 million in the last five years, and the Adelaide press has been full of lurid stories about how Powell has run up eye-opening expenses, such as a $92,000 bill at a Danish strip club, a $25,000 tab for three days at the Mandarin Oriental in Hong Kong, and the expensive bottles of wine with which he plies prospective clients at flash restaurants, including a $15,000 lunch bill at Tetsuya’s. Powell replied that such is the cost of doing business, and that you don’t take mega-wealthy clients out to a lunch, at which you sell them $300,000 worth of high-end wine, and serve them Jacob’s Creek. It’s a fair point.

A side-issue which could be critical to Torbreck’s future is the story of the 2009 The Laird. Somehow, the wine in the barrels gradually became spoilt, according to Powell. He says the volatile acidity crept up to unacceptable levels, and he pronounced the wine unfit to be sold as The Laird, at $900 a bottle. That this could be allowed to happened to such a valuable wine is incredible, but the upshot is that Powell believes the Torbreck business is unprofitable without a Laird to sell. The Laird is sold at five years of age, so the ’09 would have been due out next year. Although there are good wines from 2010 and 2012 waiting in the wings, the intervening 2011 vintage was so poor in the Barossa that no Laird was made. This could further compromise the business, which will face another year without a Laird to sell in 2016. The Laird in a good year runs to 400 dozen. “No Laird, no profit,” says Powell.

Kight did not address this question directly, but replied: “Regarding The Laird, Torbreck has a release schedule and we will follow that schedule when making any announcements regarding any of our wines.”

Powell believes – as do many others – Torbreck without him is not really Torbreck; that the fortunes of the winery hinge on his personal following. Time will tell if he is correct. Time will also tell if grapegrowers will go with Powell to his next venture, or remain with Torbreck. For Powell means to start up again, with his son Callum, who is studying winemaking at university – and is currently working the French vintage with Jean-Louis Chave in the Rhone Valley.

“The hardest thing in all of this mess has been telling my two sons their inheritance is gone,” says Powell.

Torbeck’s board has announced winemaker Craig Isbel is staying on and that the business will continue without any operational changes.

Kight concludes: “We believe Torbreck’s best wines are ahead of us. Dave was our key salesperson and there’s no question we will feel his loss. Dave has gone well out of his way to make this even harder on his former associates than if he had left in a professional manner…. I can tell you this is a driven team, and it is even more driven today to prove that there is much more to Torbreck yet to come.”

First published in the Sydney Morning Herald, Good Food – 24 September 2013.

Leave a Reply

Your email address will not be published. Required fields are marked *