A LOCAL contract winemaking facility supporting wine grape growers in the King Valley region and beyond, is determined to lead the way when it comes to following best business practices and fulfilling its ethical and social governance roles as a company.
King Valley Wines provides end-to-end services to its customers, from processing fruit and fermentation management, to maturation, blending and bottling wine.
CEO and chief winemaker Phil McGahan, who has spent 20 years in the wine industry with stints in Hunter Valley, British Columbia and California, joined the company around 18 months ago.
He said he's enjoying the challenge, being relatively new to the North East Victorian region.
"The King Valley is a very unique wine region in that it's mostly Italian families producing Italian grape varieties, and I don't think there is anywhere else in Australia like that," he said.
"For me, what really appealed is that it was unique - although we do process more traditional Australian varieties too like riesling, sauvignon blanc, chardonnay, shiraz and cabernet."
Mr McGahan works with a staff team of around nine throughout the year, bringing on board a casual crew of up to 20 during vintage which runs from late summer through to autumn.
He said during vintage they may process 3000 to 3500 tonnes of fruit; likely to extend to 4000 tonnes in 2024 if all tracks well for the season.
The majority of those casual workers come from overseas including South America and Europe, including many from Italy, France and Portugal - who may stay for around three to six months.
At the moment the on-site team which includes fellow winemakers Iryna Semchyshyn-Patil and Harry Kinsman (who Mr McGahan says "keeps the cellar humming") are busy bottling to ensure tanks are freed up in preparation for vintage and the arrival of grapes, which is just around the corner.
Under the leadership of its former CEO Garry Wall, King Valley Wines began introducing ethical and social governance practices into its operation, achieving its Freshcare and Sustainable Winegrowing Australia accreditations.
Mr McGahan has continued to build on that base and the business has now achieved its Supplier Ethical Data Exchange (SEDEX) accreditation, passing the SMETA (Sedex Members Ethical Trade Audit) which covers four key pillars relating to labour standards, health and safety, business ethics and environment.
The process is designed to elevate the operation's corporate governance, meaning it is following best business practices and fulfilling its ethical and social governance (ESG) roles as a company.
Put simply, SEDEX accreditation involves conducting an audit to ensure staff are being paid correctly, it is a safe place to work, is running in an ethical way and minimising its impact on the environment; something that is becoming increasingly important to ethical and social governance doing business in a global economy.
"It helps with our supply chain - it puts an emphasis on us to ensure that our suppliers are ethical and that they have good governance themselves," Mr McGahan explained.
"It then assists going forward beyond us, to our customers, to ensure they are employing good supply chain standards as well, and running their businesses ethically."
To achieve the accreditation a comprehensive audit was conducted and it was Iryna Semchyshyn-Patil, acting as quality assurance officer, who played a lead role.
The business was required to open up its books completely and ensure every facet of its operation met a stringent set of guidelines, and that all suitable policies and processes were in place.
There were challenges along the way and some of their processes were forensically examined and questioned, but Mr McGahan said it well worth the effort.
"It means we are taking that extra step to show we're committed to doing things the right way - doing things ethically - and making sure our staff members are cared for," he said.
"And it's important for us when we have so many casual staff - especially those who come over from overseas every year - to ensure they are cared for, paid properly, have access to accommodation of a good standard, and have an enjoyable experience."
Mr McGahan said as supply chains have globalised, ESG has become more and more important, as customers like King Valley wine producers look to place their products into new markets, seek investment or collaborate with others.
He said it's a serious commitment, requiring further audits to be undertaken each year.
"It's robust - it's done on a continuous improvement basis, requiring you to prove that you've taken corrective action (on any issues which has been identified) within a certain amount of time," he said.
"We're a business-to-business operation, where we don't have a consumer side, which is a little different to my past experience, but it does change your thinking.
"In addition to producing the best wines you can for your customers, it's assisting and partnering them to be able to fulfil both their obligations and their goals."
Mr McGahan said while yields across the King Valley were down by about 35 per cent last year, it fared better than other Victorian wine regions which had been severely impacted by storms and flooding, and he's positive about both the future of the region and the business.
He said the structure of King Valley Wines is such that it no longer relies solely on processing grapes and winemaking for revenue, with its bottling line (added in 2020) bringing in revenue year round.
The business has also grown its client base, will be adding more tanks and made its first foray into robotics this year - having recently installed a robotic palletiser.
"Gary put a lot of work in and handed over a very sound business," Mr McGahan said.
"It has the different enterprises you need to be able to weather a few storms along the way, so it's very good in that respect."