References

Cooper, M. (1984). The wines and vineyards of New Zealand (1st ed.). Auckland, N.Z: Hodder & Stoughton.

Cooper, M. (1993). The wines and vineyards of New Zealand (3rd ed.). Auckland, N.Z: Hodder & Stoughton.

Geene, A., Heijbroek, A., Lagerwerf, A., Wazir, R. (1999). The world wine business. Market study 1999, Food & Agribusiness research, Rabobank International.

Tipples, R. (2000). Personal communication.

Wine Institute of New Zealand Inc. (2000). Annual report for the year ended June 2000. Auckland: Wine Institute of New Zealand Inc.

Winegrowers of New Zealand. (2000). The BNZ wine and grape industry statistical annual, 2000. Auckland: Winegrowers of New Zealand.

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Exhibit A

Emerging

Growing phase

Mature phase

Declining phase Second life phase

USA Chile France Portugal Italy Greece ? Germany Eastern Europe ? Argentina Spain

Australia

Relative

South Africa

New Zealand
Asia

Tim Lifecycle of Wine Countries (Source: Rabobank International)

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Exhibit B
World production 1992 (293.6 million hl) 18% World production 1997 (265.0 million hl) 18%

16% 22% 66% 60%

Old wine countries New wine countries Other wine countries

Comparison of World Wine Production 1992 vs 1997 (Source: FAOStat 1999)

Exhibit C

Scenario

Old wine countries New wine countries Traditional importing countries Emerging countries Year of world consumption increase

Current Optimistic Consumption annual (million hl) growth 103 1% 44 0% 20 4.5 3% 10% 1999

Realistic annual growth 0% -1% 2% 6% 2000

Pessimistic annual growth -1% -3% 0% 3% -

*Based on the average annual growth of the last 10 years, except for the emerging countries

World Wine Consumption Growth Scenarios (Source: Rabobank International) 30

Exhibit D

Icon

Price range: > USD 50 Volume market share: 1% Price range: USD 14-50 Volume market share: 5%

Ultra-premium

USD / bottle

Price range: USD 7-14 Volume market share: 10%

Price range: <USD 5 Volume market share: 50%

Super-

Premiu

Price range: USD 5-7 Volume market share: 34%

Basic

Icon Price range Type of consumer >USD 50 connoisseur

Ultra-premium Super-premium USD 14-50 wine lover quality, image USD 7-14 experimenting consumer brand, quality

Premium USD 5-7 experimenting consumer price, brand

Basic <USD 5 price-focused price supermarket, discounter decreasing

Basis of purchase decision image, style

Retail Market trend (size)

winery, boutiques, food specialty shop, service food service little growth little growth

better supermarket, specialty shop supermarket growing growing

Competition Availability

limited, closed gradually segment increasing scarce scarce

increasing, based on brand, quality:price fierce, based on brand, price based on price ratio sufficient, year round large quantities, year round surplus

Quality Segments in the Wine Industry (Source: Rabobank International) 31

Exhibit E

Chile +119%

USA +93%

Australia +45%

South Africa +38%

New Zealand +32%

Change in Imports from some New Wine Countries to the UK 1995-1997 (Source: USDA 1998)

Exhibit F

400 350 300 No. Wineries 250 200 150 100 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Year

Number of NZ Wineries 1990-2000 (Source: Wine & Grape Industry Statistical Annual 2000)

32

Exhibit G

350 300 No. of Wineries 250 200 150 100 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Year
Category 1 Category 2 Category 3

Structure of NZ Wine Industry 1990-2000 (Source: Wine & Grape Industry statistical annual, 2000)

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Exhibit H

14 Consumption (liters) 12 10 8 6 4 2 0 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 Year Consumption Imports

35 Imports (million liters) 34 30 25 20 15 10 5 0

Consumption per Capita of NZ Wine against Volume of Wine Imported (Source: Wine & Grape Industry statistical annual, 2000)

Exhibit I

70 Volume (million liters) 60 50 40 30 20 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Year
Total Production Domestic Sales NZ Wine Export Volume

NZ Wine Production; Domestic Sales of NZ Wine; Volume of Wine Exports per Yr, 1990-2000 (Source: Wine & Grape Industry Statistical Annual 2000)

35

Exhibit J

12000 Producing area (ha.) 10000 8000 6000

70 Wine prodn (million L) 60 50 40 30

4000 2000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Year Total producing area Total production

20 10 0

Producing Vineyard Area and Volume of Wine Produced in NZ 1990-2000 (Source: Wine & Grape Industry Statistical Annual 2000)

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Exhibit K

Region Marlborough Hawkes Bay Gisborne Canterbury Auckland Wellington Otago Nelson Waikato/BOP Other Total

1992 1902 1577 1498 161 232 161 25 67 163 14 5800

1993 1997 1616 1498 184 238 171 30 79 161 6 5980

1994 2095 1642 1427 208 241 188 48 92 159 10 6110

1995 2123 1776 1356 215 215 189 46 70 118 2 6110

1996 2155 1794 1165 213 193 174 92 97 117 610 6610

1997 2655 1744 1180 190 191 180 135 115 90 930 7410

1998 2747 1829 1424 350 321 212 210 161 100 226 7580

1999 3447 2336 1447 363 345 281 207 175 100 269 9000

2000 4054 2443 1681 442 393 327 280 203 119 255 10200

2001* 4354 2800 1848 485 409 363 352 256 126 282 11280

2002* 5228 3072 1963 485 457 430 433 297 136 321 12820

2003* 5757 3074 2003 522 455 534 485 335 131 341 13640

*Forward estimate, based on plantings.

National Producing Vineyard Area by Region, 1992-2003 (Source: Wine & Grape Industry Statistical Annual 2000)

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Appendix A

38

Appendix B
Description of the Cellars of Canterbury business partners private entities

Giesen Wine Estate The Giesen Wine Estate is the largest wine producer in the Canterbury region. The three Giesen brothers emigrated from the wine-growing region of Rheinpfalz, Germany in 1980. They established their original 18-hectare vineyard in Canterbury in 1981. They now own 30 ha of vineyard in Canterbury along with a further 64 ha in Marlborough and lease additional Marlborough vineyards to procure the 2,000 tonnes of grapes they are set to crush in the 2001 harvest. Initially they focused on production for the local Christchurch market but have since expanded this to encompass the remaining domestic market in New Zealand and have been exporting since 1987. They currently supply markets in the USA, Canada, England, Germany, Denmark, Asia, Australia, Tonga, and Fiji. Their principal wine varieties are Sauvignon Blanc, Chardonnay, Riesling, and Pinot Noir.

St Helena Wine Estate St Helena, a family owned operation headed by Robin Mundy was the first commercial winery established in Canterbury and dates back to 1978. Before entering the wine and grape industry, the Mundys were large vegetable producers in Canterbury and have a long history in agricultural production. Approximately 250 tonnes of grapes are cropped from the existing 24 hectares of vineyard in Canterbury with another 4 hectares recently planted yet to come into production. A further 150 tonnes of fruit was purchased from the Marlborough region in 2000 to produce a total of 30,000 cases of wine, the aim is to bottle and sell 45,000 cases from the 2001 vintage. Marlborough Sauvignon Blanc is the principal product followed by Canterbury Pinot 39

Noir. Up until 1996 St Helena concentrated solely on the domestic market but was introduced to exporting through their involvement in Cellars of Canterbury and now service markets in the UK and USA.

Sherwood Estate Wines Sherwood Estate, owned by Mrs and Mrs Dayne Sherwood produced its first wine in1990. They now own 25 hectares of vineyards between Canterbury, the sub region of Waipara, and Marlborough, and contract for a substantial amount more fruit to produce their annual production of 17,000 cases of wine. Dayne himself has a business degree and worked for a chartered accountant before obtaining a postgraduate diploma in viticulture and oenology and setting up his own winery. Sherwood Estate operates a restaurant as a sideline but has always exported 8090% of their production. Their principal varieties are Pinot Noir, Sauvignon Blanc, Chardonnay and Riesling.

Rossendale Wines The first Rossendale wine was produced in 1993. The winery forms just part of the Rossendale enterprise, which comprises a restaurant, and a beef production and export operation. The proprietors, Brent and Shirley Rawstron became interested in wine as a complement to their beef exports to Germany in the late 80s. They both gained postgraduate diplomas in viticulture and wine making from Lincoln University and now have 4 hectares of vineyard on their 140-hectare property in Canterbury. They employ a professional wine-maker to process their annual production of 6000 cases, half of which is sold through their private restaurant. The remaining produce is sold through local Christchurch markets, and export markets in the UK and Germany. Their principal varieties are Pinot Noir, Chardonnay, and Sauvignon Blanc. 40

Morworth Estate Morworth Estate bought into the Cellars of Canterbury cooperative on the departure of Sandihurst Wines, one of the original partners. Morworth Estate, a family owned winery was established in the mid 90s and has been amidst a phase of expansion ever since. They crushed 100 tonnes of grapes in the 2000 vintage and are set to increase this to 140 tonnes in 2001. Chris Morkane, the head of the family is managing director of Gardener Smith a large Australian commodity trading company and thus has a long history in export trading and international business. He has applied this knowledge to the family winery, which presently exports 75% of its production. They have also recently built a restaurant at the site of their vineyard and winery in Canterbury.

41