Foreign ownership 'good for wine industry'

By SIMON COLLINS science reporter

Foreign ownership is a key to making New Zealand wine a global brand, a winemaker says.

Ross Spence, who founded Matua Valley Wines with his brother, Bill, in 1973, told an innovation conference on Friday that foreign interests now owned 85 per cent of New Zealand's wine production.

He said the new owners brought new technology, investment and access to markets which New Zealand owners could never have achieved.

The Spence family sold 43 per cent of Matua Valley to Foster's of Australia in 2001. Foster's has since gradually raised its shareholding, reaching 100 per cent three weeks ago.

In the past four years, the Montana-Corbans group, Nobilo and several smaller wineries have been sold overseas. Montana-Corbans alone accounted for just over half the industry's total production at the time it was sold.

Spence said Foster's had invested $150 million in Matua Valley since 2001, about 10 times what they paid for their initial stake in the business.

It was unlikely New Zealand investors would ever have found the capital required to develop the industry without such foreign involvement.

"In the three years of Beiringer Blass/Foster's Group ownership of Matua Valley, it has offered New Zealand a cross-pollination of technology, research and development that otherwise would not have occurred," he said.

"They have increased investment in vineyard and winery areas, developing efficiencies and economy of scale benefits.

"They have provided open access to their global sales and marketing networks."

Multinational companies such as Foster's had the weight to get into supermarket chains.

"I'm a great believer that what has happened in the last five years, with 85 per cent offshore ownership, is going to make our wine industry healthier," Spence said.

"It's going to make 'New Zealand Wine' a global brand in a way that could not have happened otherwise."

He said foreign owners could not take away the New Zealand brand, because New Zealand wine could only be grown in this country.

They could, of course, take profits overseas. "There is no way to avoid that."

Wine exports from New Zealand had risen from $4.5 million in 1986 to $300 million this year and were forecast to reach $700 million to $800 million by 2008.

"This expanded production offers new opportunities and challenges for the future, enabling Matua to enter new markets we have been unable to service. For the first time, we can see an ability to meet the demand," he said.

"Offshore participation in our industry should be welcomed and seen as a measure of our success."

GOING, GOING, GONE

Cloudy Bay, established by Cape Mentelle (Australia), 1985, now part of Moet Hennessy.

Nobilo, sold to BRL Hardy (Australia), 2000 (now part of Constellation Brands).

Montana/Corbans, sold to Allied Domecq (Britain), 2001.

Sacred Hill, 30 per cent sold to Jebsen (Japan), 2001.

Matua Valley, sold to Foster's (Australia), in stages 2001-04.

Wither Hill, sold to Lion Nathan (Australia/Japan), 2002.

Kim Crawford, brand sold to Vincor (Canada), 2003.