Sometimes family tradition can be a slightly oppressive burden for a business, and for the individuals; sometimes just carrying a certain name can mean a bloke (it’s usually a man) feels obliged to do something he doesn’t really want to do, and a business to take on a leader who doesn’t really want to lead.
In 2005, the fourth John Brown had the courage to leave Brown Brothers, the family wine business his great grandfather founded in 1885, and pursue a career in IT. That left his uncle Ross to continue to lead the business with two of his three daughters, all of them passionate about wine.
And then two years ago the board, which includes John, appointed the first non-family CEO: Roland Wahlquist, a 20 year Brown Brothers veteran.
“John Andrew’s decision freed everyone up,” said Ross this week. “As the fourth John Brown, he would have taken over, but it wasn’t what he wanted to do.”
Brown Brothers was started by a young Victorian farmer named John Francis Brown, who decided to plant 10 acres of vines in Milawa, near Rutherglen, and talked his father into helping fund it. He called it Brown Bros because he hoped his brothers would join him, but they didn’t as it turned out.
His son John Charles Brown joined the business in 1934, became winemaker, then managing director and finally chairman, as did his son John Graham.
In 1978, aged 63, John C made one of those far-sighted decisions that can set a family business up for the future, but that too few patriarchs can bring themselves to do.
He had earlier bought out his three sisters and then owned the winery 100 per cent. In 1978, he and Patricia had four sons aged between 24 and 36, all of them in the business, and although he loved the business he knew he had to get out of their way.
So he re-formed the firm into five equal family trusts – one for he and Patricia, and one for each of his sons. Each trust owned 20 per cent of the company. The name was changed from Brown Bros to Brown Brothers and this time it really was a business of brothers, with the eldest John Graham, and the one with the name, becoming managing director.
In 1990 the youngest of the brothers, Roger, died from a brain tumour and then in 1999, the second son, Peter, decided to transfer some of his equity into full ownership of the All Saints winery. Brown Brothers had acquired all Saints in 1992, but the integration never worked.
The three brothers had bought out Roger’s interest in the business when he died, and some of Peter’s ownership was transferred to All Saints. In 2004 John C and Patricia died within six months of each other, at the same age – 89 – so that there are now three family trusts that own the business: JG Brown, 38.8 per cent, RM Brown (Ross), 38.8 per cent and PR Brown (Peter), 22.4 per cent.
Peter tragically died in 2005 in a motorcycle accident, and All Saints is now run by his daughter Eliza, with her sister Angela and brother Nicholas also in the business. Eliza is also a director of Brown Brothers.
Under the leadership of a succession of three John Browns and a Ross, Brown Brothers has grown into one of the nation’s largest family-owned wine businesses, with 5 per cent of the market and turnover of $100 million, half of which goes through Coles and Woolworths (Dan Murphy’s).
In addition to the old winery at Milawa, they own Tamar Ridge and Devil’s Corner in Tasmania, which they bought from Gunns Ltd in 2010.
Ross says the key to business’ success has been innovation. They were the first to plant tarrango grapes, and then orange muscat and flora for dessert wines, and then 15 years ago they planted prosecco in the King Valley – the first firm to bring that variety to Australia. Prosecco is now very popular as an alternative to champagne.
Ross and his daughters Katherine and Caroline are now the only Browns still working in the business, although his third daughter Emma, 25, mightn't be far off – she’s currently working for a winery in New Zealand to learn the business and will probably join Brown Brothers one day.
And of course John A and Eliza are directors of the company, representing their family ownership. The chairman of the board is Sandy Clark, a former director of the Myer Family Office and a wine industry identity, and there are two other outside directors: Jim Eve and Graeme Mathews.
You get the feeling Brown Brothers is set up for success now: excellent wine, including some fine Tasmanian pinot as well as its great Milawa shiraz and King Valley prosecco, and a corporate structure that allows for professional management and governance, as well as strong family involvement.
Next stop: the Asian market. Currently 5 per cent of production goes to China and the plan now is to focus on growing exports to the region.
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