More grape expectations


Otago wine producers are completing their second good harvest in succession.

Harvesting will end around the time you read this. Production, including whites, is likely to total 12,000 tonnes, similar to last year.

However, the 2008-09 year has been challenging because of frosts and rain, says James Dicey of contract wine manager Grape Vision.

Carol Bunn, winemaker at Cromwell contract processor and bottler Vinpro, says she’s happy with progress of ferments and expects quality to be high.

Queenstown benefits. It’s hard to think of a better industry to complement an international tourist resort than becoming an emerging producer of some of the world’s best red wine.

Daytrippers from Queenstown throng Gibbston Valley and helicopters and wine-trail buses take visitors to more distant vineyards.

Central Otago may have escaped the glut that made Marlborough vineyards prune this year ahead of fears storage tanks mightn’t cope.

Marlborough contract prices for sauvignon blanc grapes dropped from more than $2000 a tonne to $1700 this season. Industry talk puts next season’s contracts at about $1200. Some uncontracted growers – the spot market – are finding it hard to sell.

Dicey reports Otago contract prices range from $3000-$3600 a tonne, down slightly from last year’s $3000-$3850. Spot rate is close to $3000 for those early in the market and nearer $2500 for latecomers.

Marlborough crops 10-20 tonnes per hectare, Otago crops five to six.

For money-orientated growers Marlborough’s the place to be, Dicey says. Those with passion to make the best wine possible will be in Otago, however.

“Route to market” constrains Otago. With pinot noir retailing for $35-$40 a bottle the key is to control the chain from production to trade, if not to the final consumer.

Initial investors in the Otago industry tended to be enthusiasts with a retirement income. Now corporates and a wider variety of investors are interested.

Otago vineyards average around eight hectares, compared with 20ha in Marlborough. The biggest Otago vineyard harvests about 1200 tonnes. Peter Yealands’s new investment in Marlborough harvests about 6000 tonnes and is moving to 12,000.

At the bottom end in Otago, River Rock makes wine for smaller growers. Its smallest customers are near-hobbyists who want as little as a barrel for home consumption, says River Rock winemaker Deborah Cruickshank.

The Waitaki Valley, a potential rival in pinot noir, is proving more susceptible to weather problems, according to hints. Central pinot looks likely to retain pole position.

Skyline and NZX

Skyline Enterprises’ chairman Barry Thomas must tire of repeating that the Queenstown-based company has no plans to list its shares on the New Zealand Exchange.

The question arises again because NZX may buy a company that owns half of Unlisted, the facility through which Skyline shares trade. Thomas was instrumental in setting up Unlisted and remains a director.

If the NZX move passes Commerce Commission scrutiny and NZX then tried to bring Skyline Enterprises and other Unlisted companies under its regulations, would Skyline stay?

“We’d be gone,” Thomas told BizScene.

He believes NZX listing would cost Skyline too much and entail too much time meeting continuous disclosure requirements and talking to analysts.

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