More vineyards for sale as grape prices fall

More than 30 Marlborough vineyards are listed for sale on the website realestate.co.nz, as falling grape prices force vineyard owners to sell up and others to go into receivership.

In Waipara, North Canterbury, established winery Daniel Schuster Wines has gone into receivership.

New Zealand Winegrowers chief executive Philip Gregan said Daniel Schuster was the third winery he had heard of to go into receivership or liquidation in the past three months, and he would not be surprised to hear of more.

He believed it was a reflection of the tough times the industry was facing.

Mr Schuster was one of the people involved in the early days of Marlborough's grape industry.

Pernod Ricard national wineries manager Gerry Gregg, who was the manager of Montana winery in the 1970s, said Mr Schuster worked at Brancott Estate, where he helped with plant propagation, before leaving in 1976.

Vineyards are feeling the pinch following a surprise record harvest in 2008 flooded the market with grapes, causing prices to fall.

The average price for sauvignon blanc grapes has dropped about 25 per cent, from an average of $2400 a tonne to $1700 a tonne this year, a price not seen since the late 1990s, Wine Marlborough chairman Blair Gibbs said.

Tim Crawford, a vineyard and winery sales agent at Bayleys Marlborough, said a lot of people in their 60s and 70s were getting out of the industry, after moving to Marlborough 10 to 15 years ago.

People who might have bought a vineyard were now thinking hard about investing in a high-risk agricultural venture, especially since many of them would have had a huge amount of wealth wiped off their balance sheet following the global downturn, he said.

Mr Crawford said there was a question mark over future returns, which had caused some vineyard owners to put up a "For sale" sign at the gate.

There was not an influx of vineyards coming on to the market, but they were taking longer to sell, causing numbers to build up.

Though the number of vineyards on the market seemed a lot, it was still only 7 per cent of the total area of land planted in vines in Marlborough, Mr Crawford said.

At a peak two years ago, vineyards were selling for more than $250,000 a hectare; now they were commanding about $100,000 a hectare. The prices had reflected the falling return on capital, which had dropped to about 6 per cent, compared with 15 per cent two years ago, he said.

Mr Gibbs, when asked if the vineyards for sale would remain planted in vines, said it would take a lot of pain before people starting pulling vines out.

There was a little bit of nervousness in the industry, but optimism was starting to creep in as global demand began to pick up, he said.

However, he was under no illusions the industry had a long way to go before it could get back to the returns of two years ago.

Meanwhile, it is not known what forced Waipara's Daniel Schuster Wines into receivership, or how much money was owed to creditors.

Receiver Stephen Tubbs, of BDO Spicers, said Daniel Schuster Wines was a private company and much of the information he was privy to was confidential to the business, its financiers and the staff.

Mr Tubbs said he was continuing to employ all four staff who had worked at the winery, while he gathered information, assessed the financial position of the company and its prospects. The cellar door was continuing to trade.

No one at Daniel Schuster Wines could be reached for comment.

Companies Office records show the business was jointly owned by Danny Schuster, his wife, Mari, and Edith and Francis Hull.

Daniel Schuster Wines was set up in 1986. It produces pinot noir, chardonnay and riesling.

- Marlborough Express