Margaret River: Growth, Sea Change & Keeping It Local

A profile of one of WA’s fastest growing towns by one of its most innovative and passionate wine makers.

Wine by Brad’s Brad Wehr spoke to us last year about Australia’s wine industry. Brad has been in the wine industry for 17 years – mostly in the Margaret River region – in all areas from production, marketing to management. He has also worked all around OZ, in NZ and South Africa.

The small West Australian town of Margaret River has seen many changes in the forty years since the region’s first grapevines were planted. Although the tag ‘premium wine region’ gets thrown about too easily these days, Margaret River can safely lay claim to some of the best and most consistent wine producers in the country. It is wine that has arguably given the town its recognition throughout Australia, and has seen it rise to become a major tourist destination for domestic and international visitors.

After the demise of the timber industry and the introduction of post-war settlers, dairy and beef farming became the dominant industry in the region. Viticulture followed in the late ’60’s and by the mid 1970’s a number of small boutique wineries were established. The growing interest in wine in Australia and the success of the early producers fueled further growth, and Margaret River is now recognised for its exceptionally good wines.

Of course the area’s natural beauty impressed all who visited the wineries and tourism soon became a growth industry. The corresponding increase in alternative lifestylers and surfers during the ’70’s provided the labour necessary to sustain vineyard and tourism growth. Now, the economic drivers and the main employment in the region are tourism, hospitality and wine.

The increasing number of visitors each year has also given rise to a steady increase in the population, notably fed by the city sea-changers – and the ‘once were tourists’ brigade. Long before the term ‘sea-change’ gained currency Margaret River was a magnet for those seeking a quieter lifestyle in a beautiful, natural environment.

Like many similar regions in Australia the influx has brought pressures on the town – in terms of infrastructure, community impact, development, and the inevitable ‘citi-fying’ of the town.

Industry & Employment

Because of the seasonal climate and distance factors that have reined in growth to a small degree, the region has a narrow and seasonal economic focus. This is reflected in Australian Bureau of Statistics figures for the Census of 2001 (2006 as yet unavailable) showing the region’s wage earners dependent on entry-level employment in hospitality, retail, and viticulture. While unemployment figures equate roughly with the national average, most job gains are in these low wage sectors and where the median wage is only half the national average.

This leaves less dollars to travel around the local economy. When you couple this with the dollar leakage back to the cities it leaves little money to flow through the community. Barbara Maidment, from the Margaret River Business Centre, says “part of the reason for the leakage is people preferring to shop in their familiar metro haunts as well as the lack of choice in the local market place. The local central business district still needs to expand in order to capture more local dollars. We need to get beyond the basic export activity of tourism by capitalising on activity in education, construction, retail and service sectors.”

Perhaps most importantly, Maidment suggests that our plans and support systems also need to positively encourage the ‘opportunity entrepreneur’ who employs others and contributes to the economic fabric of the local area.

Seasonal workers often mean less commitment to the local community so the social fabric suffers. Seasonal demand can be easily met with only minor adjustments to local capacity so it’s not a net contributor to economic strength.

The mining and resources boom in WA over the past few years have seen a major impact on the availability of a good, committed workforce. The capacity to earn large amounts of money ‘up north’ has seen a drain on the community’s resources, with workers prepared to give up their ‘lifestyle’ temporarily to earn the big bucks. This perhaps provides an anomaly in the unemployment figures for the region.

Business

In the last decade, as the demographic has broadened, Margaret River has seen the emergence chain and franchise stores. These give visitors the familiarity they are comfortable with. While adding to the creation of employment in the town the downside is the transformation – or citi-fying – of a once vibrant small business and tourism precinct into something resembling an outer suburban shopping mall. And of course franchise fees are sent out of town while materials and resources to run these businesses are imported from outside the region, typically abiding by the ‘group’ policy.

Over the past summer, I can’t recall the number of times I heard tourists exclaim in the main street something akin to, “Hey, great, they’ve finally got a Subway down here,” or bemoaning the fact that there’s no McDonalds (a relief for some!).

A quick count down the main street recently tallied fifteen well-known franchise businesses. When you take into consideration the ‘group’ branding of real estate businesses, the banks, pharmacies, liquor-suppliers, hardware, a Coles and IGA, then you can imagine the landscape resembling any shopping district in any city suburb.

As the population grows rapidly through the sea-change migrants there is a reduction in loyalty shown to existing long term businesses or even some of the new opportunity entrepreneurs, with a lot of new locals also returning to the city or large centres to purchase their living and bulk requirements.

Shopping local is important for everyone, including our business owners, commercial landlords and government entities.

People come here because of our eclectic mix of people and our outdoor, activity-rich lifestyle. Where possible, that mix should be supported instead of becoming a mini mall of mega brands. Sustainability must be applied to business support, not just the environment.

Locally owned shops generate a local premium, that means more money circulating in the local economy. It will also mean more taxable transactions to fund service, more procurement from local sources, and a contribution to local charity and fundraisers, all of which are important differences to smaller communities.

Social Fabric & Lifestyle

The impact on real estate affordability is also critical where housing prices equal and in some instances surpass city prices. The city sea-changers who either fully move to the region, or buy property as weekenders, push the prices up above the average. This in turn pushes rentals up. Coupled with the low income capacity of many locals then housing affordability, especially for younger residents, becomes a challenge.

As Maidment states, “the great appetite for land development, fuelled by population pressures, delivers large and sudden gains in population and large amounts of housing into formerly small communities.” These gains also accompany rapid price increases for both the land and houses.

Sea change or ‘lifestyle’ search brings a myriad of social implications such as the disruption to traditions and the preservation of community character. To quote from an article published locally by Maidment:

“‘Lifestyle’ is a nebulous factor meaning different things to different people but is not an economically distinguishable term and does not contribute to a vibrant local economy.

World-class surf, tall trees, and pristine coastal eco-systems are not edible. They quickly lose their attraction when the realities of limited economic activity and poor economic performance become obvious. Unemployment by choice is part of the ‘lifestyle’ for some people but in terms of genuine economic development, is not a terribly useful concept.

Tourism, as an industry, tends to be socially selective, placing pressure on consumption. Its participants have high infrastructure requirements and are fickle by nature. There is a tendency for coastal areas dependant on tourism to expand rapidly, peak, then decline to levels commensurate with carrying capacity. Growth to cover seasonal demand but not all can survive the non-peak.”

This is true of Margaret River.

It appears that Margaret River has now missed the opportunity to provide an alternative living and visitor experience. The citi-fying has occurred and to some extent the town now resembles a comfortable, albeit distant, suburb of Perth, with all the familiar brands on offer. To others it is a private weekend enclave to retreat to from the bustling city, and these people traditionally bring their supplies and requirements from outside.

The next stage in the region’s development is to replace imports with our own products and services. This will be our economic and social maturation, occurring when the local market is large enough to support local suppliers and workers, and we’re not there yet.

Brad’s quick tally of ‘group’ or franchise representation:

Coles
IGA
Toyworld
Civic Video x 2
Gloria Jeans
Dome
Subway
Glitterati
Bright Eyes
Just Jeans
Brumbies
Harvey World Travel
Target
Price Attack
Sportspower
Acton
First National
Roy Weston
The Professionals
Home Hardware
Mitre 10
Pharmacy 777
Chemmart
Auto One
Landmark
Quest
Accor

Plenty more I’m sure!