Wine processors bear the brunt

A slowdown in wine processing and a decision by a major winery to shift its bottling to Auckland has led to 11 redundancies at a Marlborough wine bottling plant, with the possibility of more lay-offs to come, says the plant's manager.

Wine Bottlers Marlborough general manager Lance McMillan said the bottling and short-term warehousing company was storing nearly 40 per cent more stock than usual and facing four months of downtime instead of the usual six to eight weeks.

He said the company's clients were opting not to rush into bottling their 2009 vintage this year, instead focusing on selling increased volumes of previous vintages.

"The whole industry is being hit. Their [the wineries] sales have been impacted by virtue of this economic crunch, so they're not selling as much as they once were."

The loss of one of its largest contracts, bottling a "a significant volume" of Wither Hills wines as its parent company Lion Nathan shifted bottling operations to Auckland, had also impacted on the firm, Mr McMillan said.

The increase in sales of bulk wine produced in the region had also had an affect.

Mr McMillan said the decision to reduce costs and boost efficiency was vital as the firm was not in a position to "take much harm".

Time would tell whether the decision to lay-off staff was the right one, he said.

"Our workload is dependant on clients and the market in general.

"There are so many unknowns out there and because of that we may have made a decision that could come back to us. But a decision had to be made," he said.

"It was not an enjoyable task, but it was necessary."

Yesterday Mr McMillan said the company was in a very difficult financial position when he took over management in October 2007.

"These [the job cuts] were a flow-on from that point. We've now consolidated our position to be viable long term."

The firm was also working to enhance the efficiency of its bottling production line, he said.

The line was designed to be fully-automated and was currently assembled incorrectly. When corrected it will require only between three and four staff to operate.

Currently, between seven and nine people are required to run the line.

Mr McMillan said the outgoing 11 employees will finish up next Friday, leaving 25 permanent staff at the plant.

The plant's off season starts in April.

During the downtime, the firm expects to establish its direction and determine if any further staff cuts will be needed, Mr McMillan said.

- The Marlborough Express