New Zealand's Yealands Wine Group looks to fast-track expansion

By Gemma McKenna

Published: 09 December, 2014

New Zealand's Yealands Wine Group is looking at funding options in order to fast-track expansion plans and increase its vineyard holdings.

Yealands Peter Yealands is looking for an injection of fresh capital

The group is undertaking a strategic review to assess capital requirements in order to take advantage of the "significant opportunities" it sees for New Zealand wines internationally.

Founder Peter Yealands said that to exploit the opportunities it must "increase our vineyard holdings and grow our grape supply. That is going to require fresh capital".

Investment banking group UBS is helping the wine firm with its strategic review in order to help "identify the capital requirements and optimal expansion approach, which could take the form of an IPO or other growth options", Yealands said.

Yealands chairman John Shewan said: "The strong global demand for our wines in conjunction with the recognition we have received through our international accolades, makes this an ideal time to consider growth options".

The Yealands Wine Group was created in September 2011, merging Yealands Estate Wines with Ager Sectus Wine Estates, producer of The Crossings (Marlborough) and Crossroads (Hawke's Bay). The new company is New Zealand's sixth largest wine exporter, with sales in more than 80 markets.

The UK is still New Zealand's second largest export market by value after Australia and its third largest by volume after Australia and the US. The country's 2014 harvest was a new record, in at 445,000 tonnes, up almost one third on 2013, which was also a record year. Although it still faces exchange rate challenges, it enjoys a strong average price in the UK at £7.34 per bottle.

However some commentators have been voicing concern over the country's vinous future: critic Tim Atkin MW recently warned about the dangers of over-reliance on Sauvignon Blanc for New Zealand, while consultant Justin Knock MW said it feels like New Zealand is approaching an "event horizon". On the bulk front, Knock said "they [New Zealanders] have managed to deal with successively larger harvests for a number of years from 2008-2013 and maintain high pricing, but this year they have a deluge of wine and the tail end of vintage was very wet so there is a huge chunk of average booze coming out of there, maybe a third of it weak quality".

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