Foreign Ownership

Peter Saunders wrote a good article in this month’s Wine Technology magazine about overseas ownership of New Zealand wine.   It included the following info:

USA’s Constellation group own:  Nobilo, Kim Crawford, Selaks, Drylands, Monkey Bay, Station Road, Bach 22, White Cloud.  Fosters in Australia own Matua Valley, Shingle Peak and Secret Stone; France’s Louis Vuitton owns Cloudy Bay and the French also, through Pernod Ricard, own Montana, Corbans, Stoneleigh, Deutz Marlborough, Church Rd, Lindauer and Five flax.  An Australian company named Yalumba own Nautilus, Twin Islands and Opawa while a Portugese outfit own Framingham wines.  The Peabody family in France own Craggy Range and so the list goes on (I’ve only picked some to share with you).

I don’t know whether consumers are aware of who owns the wine they drink or whether they care.  I don’t know whether folk are grateful for the involvement of foreigners or whether they resent it.  Foreign investment can certainly  be a saviour for wine companies – providing not just the funds for a business to grow but often also expertise and very valuable distribution channels.  On the down side it means that profits often end up out of Godzone.  But is this a small price to pay if it means the business thrives and New Zealanders keep jobs?  Or is it selling out – do we need to have more self confidence and hold onto the reigns no matter how rough the ride may get at times?  Or does it depend what country is involved – is it just too much to stomach those Aussies  taking the profits?   😉  (no offence intended, our daughter was born in Alice Springs and is an Australian citizen!)  

Lots of questions that I don’t have the answers to  – but I’d be interested to hear your views.

Oh, and before you start wondering, no I’m not gearing up to defend a sale of Fiasco to an overseas buyer – we have no intention of doing that nor even getting big enough to be of interest to such buyers.  But um, feel free to present all offers around the “Trade Me’ mark…;-)


4 Responses to “Foreign Ownership”

  1. August 20, 2009 at 10:04 pm

    Interesting thoughts guys… I would say most consumers dont know the extent of wine labels they see and buy that are foreign owned and I guess some dont care.
    The sad thing is that so many consumers are now driven on price rather than brand loyalty. The fact a company like Fiasco or ourselves (Cape Campbell) is family owned and run by the family means nothing to them.
    I am a bit of a ‘glass is half full’ gal so I still hope that being locally owned and operated does make a difference….

  2. August 20, 2009 at 10:24 pm

    Interesting facts about all those local brands that are offshore-owned. Foreign buy-outs are a challenge for all industries in NZ. You’ve seen it in the tech sector, where innovative technologies and firms like Mail Marshal and Navman have been bought up by offshore interests – and there’s no real way to know if the NZ shareholders got a good price, or should have held out for longer.

    I guess the good thing about wine and other horticultural businesses is that the owners can’t move the production base – the vineyards and most of the production facilities MUST stay in NZ. You can’t delocalise production of Marlborough SB to a sweatshop in Vietnam. So at least jobs are retained, even if profits go offshore. And of course access to offshore distribution channels via a foreign owner could be the make-or-break for many NZ winegrowers.

    It also depends on the attitude and goals of the entrepreneur. Many small business owners, when offered an 8-figure sum to buy out their business, will say to themselves “Well, that cheque’ll pay for a house by the beach, a round the world trip every year, my early retirement and my kids university fees”. At that point, holding out against foreign takeovers is hard. But I know a few stubborn kiwi entrepreneurs who have received offers like this and refused, because they believe in growing the business and keeping the ownership local… but that’s a much harder path to choose.

  3. August 20, 2009 at 11:36 pm

    I love the locally owned and operated angle!

    While good wine is good wine regardless of who makes it, I’m always attentive to the people who make the stuff, and I tend to remember the bottles with a good story.

  4. August 22, 2009 at 8:50 pm

    Thanks for the feedback guys! Loving the optimism Lucy, and yep we little fellas have to stick together. Wise words Richard and you make the good point that at least the production base can’t be moved. And Alan, well you give us family owned wine labels hope 🙂

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