Delegat's rips out champion vines

Supplied

GRAVELS GRAPES: The Gimblett Gravels acquisitions are mainly for Oyster Bay merlot, a blend from different parts of Hawke's Bay that sells in large quantities overseas.

Relevant offers

Industries

Council signs off on St Lukes mall plans Goodman Fielder interim profit tanks Meridian sees profit slip, gives weather warning Pay strikes planned at rest homes to go ahead AMP NZ annual profit boosted by merger Govt says asset sales will cut debt Riccarton mall Westfield's top Kiwi performer Michael Hill's interim profit up 11.5 per cent Govt may sell smaller slice of SOEs SkyCity seeks quick progress on hotel

While other wine companies are retrenching, Delegat's is buying vineyards in the premium Gimblett Gravels area of Hawke's Bay.

It has just bought the 12-hectare (30-acre) vineyard of Balthazar Estate, whose Syrah Gimblett Road 2007 was named champion wine of the Hawke's Bay awards last month.

"We've pulled out all those vines," company chief Jim Delegat said yesterday. "We're redeveloping it into merlot, with new clones and rootstocks."

Delegat's has also bought two vineyards from Sacred Hill and the Hatton Estate vineyard from Te Kairanga. "They are small purchases individually but together it is significant," Mr Delegat said.

"We now have about 100ha in the Gimblett Gravels, and we have a $20 million expansion programme nationally."

The total area of the Gravels is about 800ha.

Although Delegat's does not have a particularly high profile in New Zealand, it is a successful exporter, especially with its Oyster Bay brand. Oyster Bay sauvignon blanc, from Marlborough, is the biggest-selling wine in Australia.

The Gimblett Gravels acquisitions are mainly for Oyster Bay merlot, a blend from different parts of Hawke's Bay that sells in large quantities overseas.

"The Gimblett Gravels grapes give concentration and tannins," Mr Delegat said.

His company also makes chardonnay from Hawke's Bay vineyards, and has launched a sparkling wine using chardonnay from the region.

This move contrasts with Pernod Ricard's decision to cut back on chardonnay and sparkling wine, leaving many growers in Gisborne and Hawke's Bay with no takers for their grapes.

Balthazar director John Lockie said Delegat's had approached his company and offered a premium price for the land. "In fact we said no three times before we said yes," he said. "It came down to the value of the land and the immediate future of the wine industry."

Mr Lockie expected the current difficulties of the wine industry to continue for several years, because of the global recession and the worldwide oversupply of wine. Balthazar wines had been made at Sacred Hill.

Morice and Associates director Greg Morice said Delegat's had been paying about $120,000 to $130,000 a hectare for planted vineyards in the Gravels, a premium of about $10,000 a hectare.

Prices had dropped recently, he said – a while ago there had been sales in the $180,000 range and even up to $220,000 for special vineyards.

Prices in Hawke's Bay remained lower than those in Marlborough, he said.

The editor of New Zealand WineGrower magazine, Terry Dunleavy, said he expected to see more small wineries selling out to the bigger companies.

"It's hard for the smaller wineries and contract growers at the moment but I think it's a phase – what the stock market would call a correction," he said.

- © Fairfax NZ News