US firm chases South Island wineries

United States investment firm Saint James Company is in talks to snap up three South Island wineries, which it says have the potential to generate substantial returns in overseas markets.

The firm said it hoped for an earnings potential boost through buying Marlborough's Lawson's Dry Hills and Gravitas wineries, and Nelson's Waimea Estates.

New Zealand Winegrowers chief executive Philip Gregan said the announcement mirrored earlier purchases of Kiwi wineries and reinforced the success of Kiwi brands. "These are three reasonably sized New Zealand wineries - Lawson's Dry Hills is particularly well known in the industry. Internationally, people are recognising how successful New Zealand wines are becoming and want to buy into that. New Zealand is getting bigger and more successful in the market all the time and that success is manifesting itself in foreign companies, which are looking to share in our success."

Montana Wines was bought by Allied Domecq in 2001, then snapped up by Pernod Ricard in 2005. Global player Constellation Brands has expanded into New Zealand, buying Nobilo, Selaks and Kim Crawford.

Saint James Company president Wayne Gronquist says the wineries produce world-class vintages that he expects to generate substantial revenues once the wines are imported into the US and British markets.

"The New Zealand wine industry has demonstrated dramatic growth and increasing global demand for their products, while maintaining strong price points and margins," he said.

"This portfolio of New Zealand wineries and vineyards represents world-class wine estates that have cumulatively won an impressive number of trophies and gold medals honouring their excellence."

The firm was previously engaged in the design, manufacture, sale and service of equipment and systems for the treatment of contaminated insoluble organic materials. Once known as Radiation Disposal Systems, it was incorporated in 1984.

Owners of the three wineries were reluctant to comment further on the deal, but said that nothing had been signed yet.

Lawson's Dry Hills' Barbara Lawson said: "We have entered into discussions with the Saint James Company along with other New Zealand and Australian wineries. There has been a media report of an agreement being reached, but at this point this is not so."

- © Fairfax NZ News