Winery merger closer
New Zealand Wine Company shareholders yesterday approved the company's merger with United States company Foley Family Wines in a special meeting in Blenheim.
The merger effectively gives Foley Family Wines, owned by United States businessman Bill Foley and his family, control of the Grove Mill winery and brand.
The deal has yet to be approved by the Overseas Investment Office, but a decision from the office is expected shortly. Mr Foley already owns Vavasour, Clifford Bay Wines, and Te Kairanga brands, and Wharekauhau luxury lodge in the Wairarapa.
Foley Family Wines chief executive Mark Turnbull outlined the company's plans for Grove Mill to about 300 shareholders and winery staff at the meeting. Mr Foley has said he wanted to grow his companies to export about 1 million cases of wine a year. Grove Mill is forecast to produce about 450,000 cases this vintage.
Mr Turnbull said the new company's vision was to offer a great wine and food experience, and it had set up the Wharekauhau Wine and Food Society as part of that.
Grove Mill's wine label will be redesigned for the 2012 vintage, and a new online wine sales company will be set up from next week, which will sell Foley Family Wines' Marlborough wines along with their wines from Martinborough and California.
It will operate a loyalty programme, where purchases earned "society dollars" that could be redeemed with partners such as Simon Gault's Nourish Group restaurants, Askew and Untouched World stores, and Wharekauhau.
In the next three months, a new organisational structure and financial package would be put in place, "low-hanging fruit" cost savings made, and a new branding strategy put in place.
There was a lot to do in the next 90 days, he said. The merger process had been a long and bureaucratic one that had burnt off a lot of shareholder money in both companies. "We need to have the rubber hit the road and start making some money."
In about 18 months, the company would look at moving from the stock exchange's alternative board to theNo 1 board, which would boost the company's liquidity and give shareholders an exit strategy.
NZ Wine Company chairman Alton Jamieson thanked shareholders at the meeting in Blenheim for their perseverance. The company's financial difficulties were well known, and the case in favour of the merger was "compelling", he said.
NZ Wine Company needed to pay back $5 million to the ANZ-National bank shortly, and a $1m upgrade to the Grove Mill winery was needed. The merger with Foley Family Wines would supply that.
No-one at the meeting voted against the proposal.
Speaking afterwards, Mr Jamieson said the decision was a good one and gave the company a great opportunity to move forward.
He said that although the company's board and some staff would be based in Auckland, 85 per cent of the company would stay in Marlborough. The decision gave security to staff, and the company held a barbecue for staff and shareholders at the winery building in Fairhall last night.
NZ Wine Company's annual meeting would be rescheduled to November so that Mr Foley could attend during one of his visits to New Zealand.
- The Marlborough Express