A profitable expansion

By SIMON HENDERY

Winemaker Montana says it has put all its profits about $100 million back into a vineyard and winery expansion programme since being bought by UK drinks giant Allied Domecq two years ago.

Montana managing director Peter Hubscher said the company had continued with a five-year growth plan established before Allied Domecq bought the business in September 2001.

Since then the country's largest winemaker has boosted its holdings of leased and owned land from 2900ha to about 3500ha.

Its biggest land acquisitions have been in Hawkes Bay and North Canterbury, and the company has added about 200 fulltime jobs, taking its workforce to 1300.

Hubscher said Allied Domecq had paid a premium for Montana because the company had growth plans, and it had continued to support the plan's $50 million-a-year implementation.

He would not disclose Montana's profit which is now consolidated into Allied Domecq's books but said it was about equal to what had been spent on the expansion programme.

That level of spending would continue.

It would be "a couple of years" before Allied Domecq would consider taking Montana profits overseas.



"It has really been an investment story for them and the company."

Montana was planting sauvignon blanc, riesling, gewurztraminer, pinot gris and pinot noir on its new land.

This year's frost-ravaged grape harvest was down about 45 per cent from last year, and the company has had to import juice from Australia, South Africa, Argentina and Chile.