Another interest of mine in the realm of all things alcoholic is the business that goes on behind it.
In particular, it as just come to my attention that Lion Nathan is looking to sell part of its Marlborough wine producer Wither Hills.
Lion has found it tough with the economic downturn, having heavily invested in premium brands, as overseas markets are looking to purchase at the lower end of the scale.
This will come as a blow to the New Zealand wine industry, especially after Pernod Ricard cutting Gisborne wine growers contracts, and Constellation having its growers leave around 650 tonnes of Sauvignon Blanc blending grapes (such as Chenin Blanc) on the vines in the same region.
Lion purchased Wither Hills in 2002 from wine maker Brent Marris. Originally established in 1994 as a small boutique label, and in time their Sauvignon Blanc became the most popular in the country. Once Marris had sold to Lion (for $52 million) he stayed on to continue running Wither Hills. Following this, Marris was accused of creating separate batches for entry to competitions, and lost his judging positions, but this was subsequently disproven, although there is still some debate about this. He left Wither Hills in early 2007, and now is currently working on his new brand, The Ned.
What makes this story all the more interesting is that currently Lion Nathan is negotiating a takeover bid from Kirin, who is already a major shareholder in the company. The prospect of selling Wither Hills has arisen due to a report commissioned for Lion's shareholders. It will be interesting to see whether it goes ahead, who will purchase it, and what will happen to the brand after this.
Note: Since the creation of this post it has been reported that Lion is not, in fact, selling Wither Hills, and that the NZPA got this wrong. However, I will continue to watch what happens on the purchase of Lion Nathan by Kirin, and see what changes, if any, occur when this does eventuate, once the Kirin shareholders have voted at their meeting in September.
