Gary Andrus' New Zealand Winery Placed in Receivership
Founder of Pine Ridge and Archery Summit saw debts mount and exchange rates shift over two small vintages
New Zealand winery Gypsy Dancer, owned by American vintner Gary Andrus, has fallen on hard times. The Bank of New Zealand has placed Andrus Family Trust NZ Holdings in receivership, due to large outstanding debts, and appointed an accounting firm to sell off the wine company's assets.
WHK Cook Adams, in Queenstown, is handling the sale of the Central Otago winery, its three Pinot Noir vineyards (which total about 70 acres), 800 cases of bottled wine and 26,000 liters of wine in barrel. Andrus' Gypsy Dancer property in Oregon is not affected by the New Zealand proceedings.
Andrus founded Pine Ridge in Napa Valley in 1978, and launched Archery Summit in Oregon in 1993. He sold his shares in those wineries in 2001, then in 2002 he bought property in New Zealand and a Pinot Noir vineyard in Oregon to start his Gypsy Dancer label. The first vintage of Gypsy Dancer from Central Otago was 2003.
Ironically, Andrus' troubles come after a vintage he called "one of the six or seven best in all my years of winemaking." The fledgling vineyards suffered severe frosts in 2004, while the following year brought cold, wet weather during the critical flowering period, resulting in another shortfall. Each of those two vintages only yielded a few hundred cases of Gypsy Dancer. In 2006, 3,000 cases were produced, but along with that increase came a rise in the value of the New Zealand dollar against U.S. currency.
"We invested when the New Zealand dollar was at 43 [U.S.] cents," said Andrus, who claims to have put about US$6.5 million in the business since buying his first Central Otago vineyard in 2002. "We budgeted for 53 or 55 cents. The trouble is, most of our sales are in the U.S., which just doesn't pencil out when you have to convert it back to New Zealand dollars." The current value of the New Zealand dollar is 64 U.S. cents.
Despite the currency troubles, Andrus said that the company's assets are NZ$3.5 million more than debts, a ratio of better than 2 to 1. "Any American bank would be thrilled to see that kind of ratio," Andrus said. "It's unexpected," he said of BNZ's action, "and it hurts."
However, Duncan Fee, an accountant from WHK Cook Adams, said, "I have a fair knowledge of the company's debt and asset ratio, and think it's entirely possible that the income from the sale of assets won't cover the outstanding debt."
Still, Andrus remains hopeful. He said that a partner in another Central Otago winery is prepared to bid on Gypsy Dancer New Zealand. If that effort succeeds, Andrus expects to be able to restructure the debt and keep at least a share of the winery. "I had a similar kind of setback early in my career at Pine Ridge," Andrus recalled. "We were able to keep the winery going and make it a success. I am hoping we can do the same here. We are not walking away from this."
