Todd family turn energies towards wine

The wealthy Todd family are ramping up plans to become major players in the wine industry as they step up production from their Marlborough vineyard, Winemakers of Ara.

Todd Corporation owns 2600ha of farmland in the western reaches of the Waihopai Valley, of which about 1600ha is prime viticultural land which it has been progressively planting in grapes since 2002, part of a wider strategy of diversifying from its traditional involvement in the energy sector.

Marlborough has about 23,600ha under vines, so, when fully developed, the Ara vineyard could supply 7% of the region's production.

The Todd conglomerate, whose wealth was estimated in last year's Rich List at $2.6 billion, acquired the land as one half of a joint venture with property developer Greg Olliver, but moved to 100% ownership when Olliver's holding company, Landco, collapsed into receivership in July last year.

Winemakers of Ara general manager Damian Martin said Olliver did not have a hands-on role in running the business.

"Greg was very entrepreneurial and was always off doing blue sky projects," Martin said.

An average 60ha of new vines were being planted each year, with the vineyard already covering 410ha. Last year's harvest provided nearly 2000 tonnes of grapes which produced 140,000 cases of wine, placing Ara squarely among the ranks of this country's larger mid-sized producers and well on the path to becoming a major player.

Thanks to the deep pockets of Ara's owner, Martin is in the enviable position for a winemaker of having ready access to capital, and even though the industry faces matching supply with demand, record harvests and price discounting, Todd shows no sign of turning off the cash tap.

Ara produces its wines at Indevin, a contract winery near Blenheim, but as production steadily increases, the company wants to develop its own onsite winery.

The company is also on the verge of putting its staff into key export markets such as the UK, to support its overseas distributors.

Martin said such discussions with Todd's management were not difficult. "All the long term signals for NZ and Marlborough wine are still extremely strong. Everyone accepts that we are in a horticultural business and the [supply] pendulum could swing the other way tomorrow and there could be frosts and no production for a whole year.

"It's not mass production manufacturing and will be subject to climatic and other variables. So from that perspective it's not a difficult discussion," he said.

This week Ara will take the next step in its development when it rolls out a cheaper brand, Pathway, which will include a sauvignon blanc with a recommended retail price of $15 and a pinot noir priced at $19.

Until now Ara has concentrated on producing top quality wines priced from $20 to $45. But the increased volumes coming on line have allowed the company to produce a more affordable product which will enable it to start selling through supermarkets, opening up sales to a much broader consumer base.