McGovern withdraws vineyard from sale | Wairarapa News | Local News in Wairarapa

Award-winning winemaker Ian McGovern has withdrawn his Masterton vineyard from sale and is vowing to battle through the downturn savaging the wine industry.

Mr McGovern, speaking from the Romeo Bragato conference in Blenheim, decided this week to withdraw from the market his 2.48ha Waipipi Road vineyard, which carried a price tag of $420,000.

The property was among 10 vineyards and wineries up for sale in Wairarapa this week, and Mr McGovern said he did not want to "fire sale" his block, which is sited about 500m from his award-winning Loopline Vineyard and features pinot noir, pinot gris, riesling and merlot vines that were planted in 1995.

"I've just developed some new markets and I'm looking to employ someone else as well. I can't see the sense in sacrificing anything just to make a sale.

"Things are hard for everybody, not just us, and not just our industry. If it got worse I may consider getting out, but I'm definitely staying put right now."

New Zealand Winegrowers chairman Stuart Smith said at the opening of the Romeo Bragato conference that a 20 per cent growth in export volume in the past year and a high-quality 2010 vintage were "encouraging signs" for the industry.

"These would normally be matters to toast and celebrate, but as we all know these are not normal times," Mr Smith said. "After two decades of sustained growth, we are all experiencing the worst trading conditions since the mid-1980s."

New Zealand Winegrowers chief Philip Gregan said several pressures had brought about the "perfect storm" pummelling the industry and include the global recession and a wine glut on the back of reduced harvests.

According to a national Markhams survey of wineries that was released on Thursday, respondents have reported margin pressure, oversupply and the high exchange rate as the biggest threats to the industry.

Markhams Wairarapa spokesman Mike Flower said half the respondents reported carrying more excess wine stock than June 2009, and the "unevenness of the trading environment" was evident in Wairarapa with regional respondents divided as to whether conditions would improve or worsen.

Sales margin increases were expected by 29 per cent of Wairarapa respondents over 2010 and 2011, Mr Flower said.

"Wineries have indicated overwhelming concern over the impending GST rate increase and the expectation supermarkets will demand that wineries absorb the increase in order to maintain current price points."

He said 63 per cent of respondents nationally expect conditions to remain the same in the next year, while 24 per cent predict better times ahead and 13 per cent expect declining trading conditions.

"There are a large number of wineries for sale around the country and further receiverships can be expected," he said.

Awatere Vineyard Holdings and Awatere Vineyard Estates in Marlborough have gone to the wall owing $24 million, following Central Otago producers Anthem Holdings and William Hill Winery, and Marlborough's Cape Campbell Wines and Gravitas Wines, who had already fallen victim to the downturn.

A majority of survey respondentssaid developing new markets, particularly in Australia, China and other Asian countries, was the strongest opportunity.

The regular Markhams survey is conducted in Auckland, Canterbury, Hawkes Bay, Marlborough, Otago and Wairarapa.

It covers topics such as sales and distribution, capital investment, branding and profitability.

The survey is also published on the Markhams website www.markhams.co.nz