NZ vineyards fit Americans’ bill
For Americans with a spare US$1 million (NZ$1.46 million) to invest – or even US$1.5 billion – snapping up a parcel of New Zealand land to make wine is one way to make some more money.
Asked where would be a good place to invest, Sarah Heller, a Master of Wine at US Heller Beverage Consultancy, said New Zealand vineyards would be her pick, Bloomberg reported recently.
New Zealand is still expected to offer options when climate change is forecast to hit established wine areas in other parts of the world, such as California and Australia. They are likely to see their winegrowing regions unable to cope with hotter temperatures and more severe weather.
New Zealand fits the bill, Heller says, with cooler summers and vineyards’ proximity to the sea.
There is also plenty of potential for production of high-end wines, particularly chardonnay, as the local industry turns its focus more to fine wines that can command a higher price than the bulk of exports.
‘‘In 30 to 50 years, Australia and California may have limited sites available for the production of top cool-climate chardonnay, which is steadily gaining in popularity worldwide,’’ Heller told Bloomberg.
Land that is considered marginal, because it’s on a hillside for example, would not face much competition from real estate developers.
While many foreign investments in New Zealand land are restricted by law, overseas investors can buy up to five hectares of land for horticulture use without much trouble.
That might not sound like much, but the world’s most expensive coolclimate chardonnay, Montrachet, sells for as much as US$8000 a bottle and is produced on 0.68 hectares.
Heller said: ‘‘A typical parcel of unplanted land of that size, located on the fringes of top wine-producing regions Hawke’s Bay and Marlborough, might only cost you US$250,000.’’
Rounding out the US$1m would be a few years’ farming and contract wine-making costs.
New Zealand’s wine industry has long attracted foreign investors, with many larger labels owned offshore – including Constellation Brands from the US, which owns Kim Crawford, Nobilo and Selaks; and Treasury Wine Estates from Australia, which has Matua and Shingle Peak in its portfolio.
Pernod Ricard owns Brancott Estate, with Stoneleigh and Church Road also in its stable.
After more than a year the Overseas Investment Office recently gave majority US-owned Foley Wines approval to buy Queenstown vineyard Mt Difficulty for $52 million.
Foley Family Wines owns the Grove Mill and Vavasour brands in Marlborough, and Martinborough and Te Kairanga vineyards in Martinborough.