Big fish eats little fish has been a common theme of late in much of the wine industry, particularly in New Zealand. The New Zealand Wine Fund, an Auckland-based holding company, will acquire Marlborough estate Clifford Bay, adding it to its existing portfolio of Marlborough brands, which includes Vavasour, Goldwater, Redwood Pass and Dashwood. The deal, which closes Feb. 28, 2007, includes rights to the brand name, current inventory and 67 acres of vineyards, planted mostly to Sauvignon Blanc. According to the principals, the sale price is approximately $6.8 million.
The acquisition of Clifford Bay's vineyards gives the New Zealand Wine Fund a total of 283 acres. The company now becomes one of the country's seven largest wine companies, with total production in 2007 expected to be about 260,000 cases, of which 75 percent is Sauvignon Blanc, 10 percent Pinot Noir and the balance Chardonnay, Riesling and Pinot Gris. Long-term grower contracts currently provide more than half of the company's annual fruit supply.
The company also acquired Goldwater less than a year ago. While that deal included Goldwater's share of winery Rapaura Vintners, one of the largest wineries in Marlborough, it did not include any Marlborough vineyards, just Goldwater's grower contracts.
"We wanted to have some more owned land, and it was a natural progression because we make all the Clifford Bay wines [at the Vavasour production facility]. And because they're a neighbor of Vavasour it was the most logical acquisition for us," said David Belcher, executive chairman of the New Zealand Wine Fund.
Eric and Beverly Bowers started Clifford Bay in 1994, purchasing what used to be a pig farm in the Awatere Valley of southern Marlborough. In 2006, the company made 40,000 cases, about three-quarters of that Sauvignon Blanc and the remainder Chardonnay and Riesling. The transaction includes the Clifford Bay restaurant and retail shop. Eric Bowers, 64, will continue to work with New Zealand Wine Fund as a consultant.
"I came from the oil industry and this has been a terrific ride," said Bowers.
Belcher said that New Zealand Wine Fund will consider more land acquisitions. Though additional wine brand purchases aren't in the company's short-term plans, Belcher expects the big fish to get bigger. "Out of the 540 wineries in New Zealand, all but 40 make less than 25,000 cases. I think there will be further consolidation," he said.