BIN LIGHTWEIGHT GLASS INITIATIVE

1. BIN LIGHTWEIGHT GLASS INITIATIVE May 2010

2. From October 2010 production,Wyndham Estate BIN rangewill change from 540g to 360g glass bottles (subject to markets confirming agreement to the change and the proposed timing) This move: 1) Responds to customer and consumer environmental expectations 2) Drives cost savings through lower COGS and reduced freight costs 3) Will enable increased A&P investment to build the brand Executive summary • The decision to move is strongly recommended and will be made collaboratively with markets • Some markets will be automatically effected as a result of the change in other markets

3. Demandfor lighter weight packagingis growing across a number of categories including wine from both environmental and cost saving perspectives Demand mainly driven by trade but “green packaging” also becoming increasingly expected by consumers Environmental benefits include less glass plus substantial reductions in energy use, water use and carbon dioxide outputs Cost benefits include reduced dry goods cost to supplier and reduced freight costs for both supplier and customer Background

4. Competitors are moving to lightweight at an increasing pace AU competitors moving to lightweight include d’Arenberg Stump Jump, Taylors Eighty Acres, Houghton Stripe, Hardy’s Stamp, Tyrell’s Moore’s Creek and Old Vine, Peter Lehmann Weighbridge, Banrock Station, etc. A number of other brands are expected to convert this year Competitor landscape

5. Consumer research undertaken in Australia, focused on Jacob’s CreekClassic, indicated that there were no significant risks to brand appealand image in JC adopting the lightweight bottle The research methodology involved 3 steps: 1) Consumers interacted with lightweight or current packs in a store like set up 2) Then took home 3 bottles (same type as used in store like test) to use as normal for a one week trial – completed on line questionnaire 3) A final telephone interview was conducted to probe for differences in perception when the respondents were told about the lightweight bottle JC consumer research

6. In the store like set up test, the JC lightweight bottle showed no difference in appeal, purchase likelihood or premium quality compared to the current bottle In the home use test there was also no difference in appeal, purchase likelihood or premium quality During the telephone follow up, after being told the bottles were 30% lighter, 61% did not change their opinion The other 39% had a more positive perception – generally seen as more environmentally friendly We believe these findings for Jacob’s Creek Classic are highly applicable to Wyndham Estate BIN range JC consumer research

7. When the BIN range current bottle and lightweight bottle are lined up against each other, the two bottles look quite similar Especially considering the bottle on the right uses 1/3 less glass The difference is easier to pick when the 2 bottles are alongside each other at eye level Rationale for moving BIN Current bottle Lightweight bottle

8. When the two BIN bottles are lined up against other Australian brands at similar price points, some competitor packs look more substantial (e.g. Wolf Blass Yellow) while others do not (e.g. Penfolds Koonunga Hill) Rationale for moving BIN

9. Our #1 export market is Canada where the trade is pressuring suppliers to move towards lightweight and we expect more competitors will move to lightweight in the future Moving BIN to lightweight will position the George Wyndham range as fine wine and more clearly differentiated from BIN The Jacob’s Creek AU research indicated higher acceptance for red wine in lightweight bottles v white wines – and, as BIN range volume is >75% red, the risk of alienating consumers is lower Rationale for moving BIN

10. The financial impact of moving to lightweight glass for Wyndham Estate BIN will be: Indicative standard cost reduction for dry goods of $0.54 per 9L case equivalent commencing from B12, and Freight savings driven by reduced weight and increased no. of cases per pallet/container. These freight savings will vary from market to market. Financial implications

11. The communication of this change will be primarily to the trade and we will discuss any further communication on a market by market basis An information kit will be developed and it will include: - PowerPoint presentation - Product specifications and images - Question & answer sheets - Product samples In the future, the Lean and Green logo may be embossed into the punt of lightweight bottles as an industry standard (this is under consideration but no decision has been made) Support tools

12. Secure agreement from all markets (for the change and the timing) Develop information kit and distribute samples Market present samples and story to customers and gatekeepers Minimise current in market stock holding to speed lightweight bottle progression to shelf In market launch Next steps

13. Appendix A: bottle specifications Current Claret Lightweight Claret Current Burgundy Lightweight Burgundy

14. Appendix B: case specs 4.5l case Specifications

15. Appendix C: containers / pallets