Overseas investment decision for case 200810029 - Cloudy Bay Vineyards Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background and Outline of the Investment:
Cloudy Bay Vineyards Limited (CBV) has established itself world wide as a pre-eminent producer primarily of Sauvignon Blanc wine. Demand has recently out stripped supply in many countries which CBV exports, especially North America, Australia, and the United Kingdom. To satisfy this demand CBV has seen it necessary to purchase further land.

CBV as an established producer of premium Marlborough wines, proposes to acquire developed vineyards in order to secure an additional grape supply. The Applicant has entered into an agreement to purchase three vineyard properties situated at Bedford Road and Conders Road.

Rationale for the Investment:
The purchase of the proposed properties will provide 36 hectares of productive vineyard to meet some of the targeted demand. The properties have been identified as being ideal due to their varietal mix. The diverse varietal planting of the three properties is a significant factor in the Applicant's decision to purchase these properties. The acquisition is important to the Applicant's project of producing Pinot Gris, which has been identified as a growth product. The acquisition will allow for a 70% growth from the 2007 vintage of this variety.

Another driving motivator to purchase the land is the need for CBV to become self sufficient with fruit supply. CBV currently has 46% selfsufficiency across all varietals, with the balance of fruit supply obtained from contract growers. CBV must manage its own supply to reduce the risk resulting from weather and reliance on contract growers.

In addition, the Bedford Road property adjoins land already owned by CBV, which will allow the two blocks of land to be farmed together and consolidate resources.

The proposed overseas investment is or is likely to benefit New Zealand (or any part of it or group of New Zealanders) having regard to the following factors:

Overseas Investment Act 2005:
s17(2)(a)(i) – Creation of new job opportunities;
s17(2)(a)(iii) – Increased export receipts;
s17(2)(a)(iv) –greater efficiency; and
s17(2)(a)(v) – Introduction into New Zealand of additional investment for development purposes.

Overseas Investment Regulations 2005:
r 28(e) - Previous investments.