Wine industry losing some of its 'romance'

 Falling grape prices are forcing vineyard owners to sell up and others into receivership.

More than 30 Marlborough vineyards are listed for sale on the website realestate.co.nz and established Waipara winery Daniel Schuster Wines has gone into receivership.

New Zealand Winegrowers chief executive Philip Gregan said Daniel Schuster was the third winery he had heard of to go into receivership or liquidation in the past three months and he would not be surprised to hear of more.

He believed it was a reflection of the tough times facing the industry.

A surprise record harvest in 2008 flooded the market with grapes, causing prices to fall. The average price paid for sauvignon blanc grapes has dropped about 25 per cent, from an average of $2400 a tonne to $1700 a tonne, this year a number not seen since the late 1990s, Wine Marlborough chairman Blair Gibbs said.

Tim Crawford, a vineyard and winery sales agent at Bayleys Marlborough, said a lot of people aged in their 60s and 70s were getting out of the industry after moving to Marlborough 10 to 15 years ago, chasing the dream of owning a vineyard.

However, Mr Gibbs said there were not the same numbers of people in their 50s now looking to get into the industry.

People who might have bought a vineyard were now thinking hard about investing in a high-risk agricultural venture, especially since many of them would have had a huge amount of wealth wiped off their balance sheet following the global downturn, he said.

"The romance has ended a little bit in the industry." High cashflow demands made wine a difficult industry to be in.

Mr Crawford said there was a question mark over future returns, which had caused some vineyard owners to put up a `for sale' sign at the gate.

There was not an influx of vineyards coming on to the market, but they were taking longer to sell, causing the numbers to build up.

Though the number of vineyards on the market seemed a lot, it was still only 7 per cent of the total area of land planted in vines in Marlborough, he said.

Some vineyards have been on the market for a year.

At a peak two years ago, vineyards were selling for more than $250,000 a hectare; now they were commanding about $100,000 a hectare. The prices had reflected the falling return on capital, which had dropped to about 6 per cent, compared with 15 per cent two years ago, Mr Crawford said.

He believed the buyers were out there, it was just a matter of getting the right price.

Ad Feedback Mr Gibbs, when asked if the vineyards for sale would remain planted in vines, said it would take a lot of pain before people starting pulling vines out.

There was a little bit of nervousness in the industry, but optimism was starting to creep in as global demand began to pick up, he said.

However, he was under no illusions the industry had a long way to go before it could get back to the returns of two years ago.

A lot of work was being done to reduce crop levels, but another 2000ha of vineyards were due to be harvested this year after being planted three years ago.

Winery in receivership

Waipara's Daniel Schuster Wines is now under the control of receivers.

It is not known what forced the company into receivership, or how much money was owed to creditors.

Receiver Stephen Tubbs, of BDO Spicers, said Daniel Schuster Wines was a private company and much of the information he was privy to was confidential to the business, its financiers and the staff.

"I have also given an undertaking to the staff that they will be the first to know about any decisions we may make affecting their futures."

Mr Tubbs said he was continuing to employ all four staff who had worked at the winery, while he gathered information, assessed the financial position of the company and its prospects.

The cellar door was continuing to trade, he said.

No-one at Daniel Schuster Wines could be reached for comment.

Companies Office records show the business was jointly owned by Danny Schuster, his wife, Mari, and Edith and Francis Hull.

Daniel Schuster Wines was set up in 1986. It produces pinot noir, chardonnay and riesling.

Mr Schuster was one of the pioneers of viticulture and winemaking in the South Island and became Canterbury's first commercial wine producer, at St Helena Wine Estate.