31 January 2019
NZX-listed Foley Family Wines Limited has been granted consent to buy Mt Difficulty Wines Limited in Central Otago.
Foley Family Wines is majority owned by United States-based Bill Foley and owns other New Zealand vineyards, including Martinborough Vineyard, Te Kairanga Vineyard and Grove Mill Winery.
Mt Difficulty is a medium-sized vineyard known for its Mt Difficulty and Roaring Meg labels and particularly its pinot noir. The purchase includes about 70 hectares of freehold land and about 110 hectares of leasehold land.
Land Information Minister Eugenie Sage and Associate Finance Minister David Clark in December granted consent to the purchase under the Overseas Investment Act. It required consent because the land includes more than five hectares of rural land and in parts is next to reserves.
Foley Family Wines’ application took about 8½ months to process, during which the Overseas Investment Office (OIO) and the Ministers undertook a robust assessment of the application to ensure the investment would provide substantial and identifiable benefits to New Zealand.
The new Ministerial Directive Letter (PDF 467KB) that came into effect in December 2017 raised the bar for the purchase of rural land by overseas investors. The Ministerial Directive Letter stresses that New Zealanders are world leaders in the primary sector and that it’s a privilege for overseas people to own rural land. The Government is concerned to ensure the benefits of overseas investment in rural land are genuinely substantial and identifiable.
Throughout the Foley Family Wines assessment process both the Ministers and the OIO raised concerns with Foley Family Wines about the level of benefit likely to result from the investment. These were addressed by Foley Family Wines before consent was granted.
Foley Family Wines plans to leverage its networks to increase exports of Mt Difficulty wines by cross marketing with its existing labels.
It will continue Mt Difficulty’s plans to expand the Mt Difficulty vineyard restaurant and cellar door, develop a restaurant and a barrel facility at Te Kairanga Vineyard in Martinborough and upgrade its Grove Mill Winery to increase production capacity.
The investment will result in nine new jobs, mostly in the Wairarapa and Marlborough.
The Ministers’ approval includes conditions to ensure that the investment delivers substantial and identifiable benefit to New Zealand.
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