French wine and spirits company Pernod Ricard will begin laying off staff at its Tamaki wine bottling facility from March, says the union representing its workers.
Pernod Ricard's Tamaki bottling facility currently employs 90 staff, all will be made redundant next year when the site closes for good.
Raymond Wheeler, union team leader at E tū, told the Herald "economic headwinds" had hit Pernod Ricard, along with the loss of a couple of major contracts, which had forced the company to make the decision to close the production site.
Pernod Ricard says the site was proving difficult to sustain.
"They've had some economic headwinds against them. They've lost a few major contracts and the French arm of the business isn't going that well," Wheeler said.
• Premium - Pernod Ricard to close Tamaki site, 90 jobs at stake
• Pernod Ricard sells wines and assets
• Pernod Ricard tight-lipped about sale
• Pernod Ricard sells wine brands, assets for $88m to Lion Nathan
The Tamaki facility bottles wine for the company's New Zealand wine brands, including Brancott Estate, Jacob's Creek and Stoneleigh.
Production will now be outsourced to "third party support" in Auckland and to the company's wineries in Blenheim and the Hawke's Bay.
"We have invested a lot in the site over the years, but with clearly ageing infrastructure, and the changing nature of the Glen Innes area, [it is] putting constraints on operations," said Brett McKinnon, Pernod Ricard's chief operations officer.
"The site is proving difficult to sustain in its current state and we need to evolve - this is the primary reason for the closure. It is important that we improve our operational efficiency to create the conditions to better capture growth opportunities, both now and in the future."
The rise of low and no alcohol spirits, and super-premium spirits
McKinnon said two co-packing agreements had come to "a very amicable close" after the parties found "alternative arrangements".
A spokeswoman for the group said both its local and international businesses were "performing well".
Workers and about 25 union members from the Tamaki facility were told of the company's plan to close the site in the second week of November, with the consultation process taking effect shortly after, Wheeler said.
The closure of the site would be in a staggered manner with the first staff finishing up with the company in March, with most finishing between April and June, he said.
Maintenance engineers would be the last staff to finish up at the site in December.
Pernod Ricard confirmed the closure would take place over a 12- to 18-month period.
Wheeler said the closure was a tough pill for staff to swallow given the time of the year, but Pernod Ricard had arranged "job search days" and had offered staff help with their CVs and given interview opportunities for roles in Australia.
"Members are obviously disappointed at this time of the year and it is a bit of shock in terms of it being announced, but feedback has been that the employer has taken on feedback.
"It has been hard to put on any alternatives because it is a total close down but the employer and employees have been working well with the union in terms of providing those job search days and engaging with local employers to find employment - this time of the year it is really hard."
Staff were told about a number of vacancies in Australia, he said.
"Employees understand the situation and they are doing the best they can in a difficult situation coming up to Christmas."
Wheeler said there had been "good communication" between the company and staff, and the union was satisfied with how Pernod Ricard had dealt with the situation.
Pernod Ricard's FY2020 first-quarter sales across all its wine and spirits categories show moderate growth, in line with its expectations, up 10 per cent across all of its markets, including the United States, Europe, New Zealand, China and India.
The group's total sales revenue for the first quarter was €2.4 billion ($4b), up 1.3 per cent on the same quarter a year earlier.