Wine sector senses a whiff of recovery

CLAIRE ROGERS
Last updated 05:00 09/11/2012
Wine glasses
BLUE SKIES: NZ Winegrowers says the wine industry is on the mend after a gruelling few years.

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The wine industry is on the mend after a gruelling few years that prompted a string of closures and collapses, New Zealand Winegrowers says.

One recent high-profile casualty, Hawke's Bay winery and vineyard Matariki Group was put into receivership in September owing creditors, including the Government, about $11.2 million. Receivers PricewaterhouseCoopers said the winery struck financial trouble after reduced harvests in 2011 and 2012 led to weak sales, and that was compounded by a lack of capital.

New Zealand Winegrowers chief executive Philip Gregan said the 2012 harvest was down 19 per cent on 2011, and that had dealt another blow to the industry, which had been struggling since 2008 with over-supply and weak demand from the global downturn.

"There have been a number of receiverships since 2008 and there have been ones that have closed down or sold to others. But we don't have firm numbers." It was hard to say whether any further wineries would fall victim to the smaller harvests, he said.

"We just don't know. The general tone in the industry is that things are getting slightly better but we wouldn't say they are back to where they were."

Industry sales had increased since 2008 and the smaller vintage had had a double-edged effect, keeping a lid on the volume of sales but easing the downward pressure on prices because of shorter supply. Matariki was a well-known name in the industry.

"It's very unfortunate that this has happened but it's reflective of the tough times we've been through."

Matariki's winery and vineyard are now on the market, and PWC partner John Fisk said some parties had expressed interest in them.

PWC's first reports on the two companies in the group, Matariki Wines and Stony Bay Wines, show secured and unsecured creditors are together owed about $11.2m, more than the $10.3m originally estimated.

First secured creditor Rabobank is owed $8.7m and Crown Asset Management - the government entity set up to handle South Canterbury Finance's loans after its collapse - is second secured creditor, owed $2.2m.

Preferential creditors include the Inland Revenue Department, owed an estimated $47,000 and staff, who were owed $48,000 by the companies when they went into receivership.

Unsecured creditors are owed about $136,000, but Fisk said it was unlikely they would be paid. He doubted the amount owed by the group would increase dramatically, as it was likely PWC had been notified of the majority of outstanding debts.

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Nine staff remain employed the group.

Matariki was established in 1981, when its directors, former junior All Black John O'Connor and Rosemary O'Connor, returned to New Zealand after studying wine in Europe. Its wines have won several awards.

Last year its 2007 "Quintology" wine won a gold at the Hawke's Bay wine awards. Fairfax NZ

- BusinessDay

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