Pernod sells top wine labels to Lion

he sale of Gisborne and Hawkes Bay brands is seen as a move by Pernod Ricard to concentrate on Marlborough. Photo / Carolyn Robertson

A dozen popular Kiwi wine brands have changed hands in a deal between two drinks industry heavyweights.

Pernod Ricard New Zealand said it had agreed to sell selected Gisborne and Hawkes Bay wine brands and assets to Lion Nathan New Zealand and its joint venture partner Indevin for $88 million.

The sale involved 12 brands, including Lindauer, Verde, Corbans and Saints.

Pernod Ricard said it had decided to refocus its wine strategy behind core brands and had streamlined its portfolio and production.

Its managing director, Fabian Partigliani, said the company was committed to New Zealand and the long-term development of its wine and spirits portfolio, including Brancott Estate, Stoneleigh, Church Road, Deutz, Boundary and Triplebank.

Wine writer Michael Cooper said that until the rise of Montana in the early 1970s the best-known wine brand in New Zealand was Corbans.

"The fact that within the space of a couple of months Pernod Ricard New Zealand has almost entirely axed its Montana brand and then sold the brands Lindauer, Corbans and several others clearly is of major importance."

The company in June said Brancott Estate would become the new name for the Montana brand globally, with the Montana name retained for the company's Classics range in New Zealand.

"There's clearly a lot of strategic thinking going on here," Cooper said. "To me the latest moves signal a focus on their investments in Marlborough, which after all accounts for 65 to 70 per cent of the country's entire wine production."

Pernod Ricard inherited a lot of brands built up over decades when it bought into the New Zealand wine industry, Cooper said.

"At one stage a catalogue came to me which had nearly 200 wines all from the same company. It makes sense, I think, to streamline things."

Lion Nathan corporate affairs director Neil Hinton said wine production specialist Indevin would take control of the Gisborne and Hawkes Bay vineyards and a Gisborne winery, while Lion Nathan would take possession of the brands and a significant amount of inventory, with a supply arrangement between the two parties.

"It certainly fits with our model and our strategy is around being a one-stop-shop for all of our customers' needs." The sale was subject to approval from the Overseas Investment Office.

"At this point in time while we get to number two I think it gives us something like about 16 per cent of the total New Zealand wine market," Hinton said. "So we're still miles off being in any position of market strength."

Lion Nathan could hold about 40 per cent of the total alcohol market.

"But again in terms of substitutability, excuse the pun, it's such a fluid market."

Industry experts were yesterday questioning why Commerce Commission approval was not needed for the deal, which would increase Lion Nathan's share of the liquor market.

The only wines offered in many bars and restaurants would now all be Lion brands, one consultant said, and whether bar and restaurant owners would expand into other labels was unknown.