Corks popping over Montana's big gain

By PAULA OLIVER

Strong demand for top-shelf wines were behind yesterday's announcement of a jump in annual earnings for the Montana Group.

Executive chairman Peter Masfen reported an after tax profit of $48 million for the year to June 30, compared to last year's result of $24 million.

The impressive jump was skewed by the company's sale of troubled subsidiaries Truck Investments and Go International.

The value of sales increased by five per cent to $448 million, despite a drop in domestic sales.

Premium labels such as Church Road enjoyed considerable growth, Mr Masfen said, and Montana would keep investing at the higher end.

"We plan to continue in that direction because that's where the future of New Zealand wine is - in high value wines that are uniquely New Zealand. "That's true of exports as well as domestic products."

Strong export sales of Lindauer, combined with a low Kiwi dollar also contributed to the growth.

The company would be able to increase supply of premium quality wines as grapes matured at the new vineyards it had invested in, said Mr Masfen.

Any drop in sales had occurred in the lower value market.

He would not comment on Montana's application this week to buy out its major domestic competitor Corbans.

The combined company could hold up to 57 per cent of the domestic market.

Montana said that the local wine industry would benefit from a larger company being able to compete more strongly in overseas markets.

Purchasers such as British supermarket chains could place orders which would consume the whole of Montana's annual production of a particular style or variety, it said.

Montana shares closed up 7c at 243c.