Vineyard land and forestry plantations attract foreign buyers in Marlborough

The Overseas Investment Office cleared 20,766 hectares of land for sale to foreign buyers between 2012 and 2016.
FAIRFAX NZ

The Overseas Investment Office cleared 20,766 hectares of land for sale to foreign buyers between 2012 and 2016.

Foreign buyers are spending millions snapping up large tracts of land in Marlborough, resulting in a heavy concentration of foreign ownership in key industries.

Figures from the Overseas Investment Office showed 20,766 hectares of land in the region was cleared for sale to foreign buyers between 2012 and 2016.

A large portion was already owned by foreign interests, but the figures showed 12,657 hectares of New Zealand-owned land was also cleared for sale during the period.

Forestry plantations have been the biggest lure for foreign buyers in Marlborough.
FAIRFAX NZ

Forestry plantations have been the biggest lure for foreign buyers in Marlborough.

The success of the Marlborough wine industry has resulted in wide-scale investment from overseas companies, which have spent millions of dollars establishing vast vineyard estates.

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Two of the biggest wine companies in the world, Constellation Brands and Pernod Ricard, are among the players to buy land in Marlborough over the past five years.

But the single largest investment in the wine sector was made by Australian-owned Treasury Wine Estates, which was cleared to buy around 560 hectares for an estimated price of $29 million.

Wine Marlborough general manager Marcus Pickens said there was mixed opinions in the industry about the concentration of foreign ownership, but thought overall it had been a good thing.

Large overseas wine companies had established distribution networks and connections to valuable markets, which helped Marlborough wine cement its global reputation, Pickens said.

"It's an easy one to get on the other side of and say, 'we shouldn't have foreign investment', but I challenge people to look back and see where we would be without it," he said.

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There were 141 wine companies operating in Marlborough, however there was no breakdown available for how many were overseas-based and how many were New Zealand companies.

Pickens said it was great to see so many family-owned wine producers, but noted the reality of establishing a wine company, which he said was incredibly capital intensive.

"That investment has to come from somewhere to grow, so it's no surprise that some of that capital is coming from overseas," he said.

The influx of overseas capital helped create jobs in the industry, which according to figures from the New Zealand Institute of Economic Research employed more than 2000 people.

Last year, 7103 hectares of land were cleared to be sold to overseas buyers in Marlborough, with forestry company Blenheim Estate Limited making up the majority, about 4973 hectares.

Forestry was the biggest investment area for foreign buyers in the region, with Marlborough Forestry Industry Association executive officer Vern Harris estimating half the Marlborough estate was owned by overseas companies.

Harris said the involvement of overseas companies was a positive, as it allowed local owners to divest from their holdings while continuing with similar supply and employment arrangements.

The only future downside would be if raw materials were exported offshore instead of companies investing in processing facilities in the region to add value to forestry products, he said.

Kaikoura MP Stuart Smith said he supported investment from overseas companies, citing the wine industry as an example where foreign investment had helped grow its reach and success.

"The land can't be taken anywhere, it still remains here, and there's been some huge positives from foreign investment," he said.

 - The Marlborough Express

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