New Zealand wine to remain French

The Brancott Winery, formerly Montana, in Marlborough

New Zealand's largest winery will remain in French hands after owner Pernod Ricard signalled it will retain ownership of Allied Domecq Wines NZ - formerly Montana Wines.

Pernod Ricard, the world's No 2 liquor company, has rebranded its regional holdings under one umbrella - Pernod Ricard Pacific.

The move ends two years of uncertainty about the fate of Montana Wines, bought by Allied Domecq in 2001 for $1 billion.

Montana then passed into Pernod Ricard's ownership when the French company bought Allied Domecq, including its New Zealand assets, last year for 320 million ($814 million).

It had given Diageo, the world's largest liquor company, the option to purchase 75 per cent of Allied Domecq Wines NZ, but last October Diageo said it was not interested.

Yesterday's move was the first signal by Pernod that it would retain ownership of Allied's New Zealand business.

"We [Allied] are part of their company. They [Pernod] are not selling," said Zirk van den Berg, spokesman for Pernod Ricard New Zealand.

The New Zealand business, which was formed by the combination of Pernod and Allied's local divisions, will be headed by Chris Lynch, former marketing manager for Allied.

Van den Berg called yesterday's announcement a "rebranding" but also said the new company would be "a big powerhouse of wines, spirits and distribution".

When it was announced that Pernod would retain ownership of Allied last year, some small wine producers expressed concern that the company would command a disproportionate amount of muscle in the local wine market. Some estimates pegged Pernod's share of the New Zealand wine market as high as 50 per cent.