White knight: Foley Wines says Toast Martinborough vital earner for small wineries, service businesses

Toast Martinborough brings tourists to the South Wairarapa every year and generates more than $1 million for the local economy.

Foley Wines is staying mum about how much it is paying to bailout the Toast Martinborough food and wine festival, saying what’s more important is getting small businesses in the community paid.

The NZX-listed company which has winemaking operations around the Wairarapa town, is taking on the liabilities of the 30-year-old event, which has been financially struggling like so many hospitality ventures impacted by the Covid pandemic.

Chief executive Mark Turnbull said the amount of money the company was up for in taking over the festival was confidential “out of respect” to its small winery shareholders. A poor harvest had worsened the financial issues facing the winery shareholders.

He said they could not pay the festival’s suppliers, mainly small businesses and “it’s very important to do that”. Revenue from the festival, held in November, was “very material” for some of the smaller wineries.

Turnbull estimated the event directly generated more than $1 million for the local economy, and attracted around 7000 people. The ripple economic effect was probably more like $1.5m and up, he said.

“Each winery gets its own revenue from the event but Toast Martinborough (has the cost of) organises it.”

Foley Wines was a foundation shareholder of the event and believed it was important to keep it going for the good of the community.

“What we paid for it is not relevant. What’s relevant is that Mum and Dad business owners get paid and the festival can continue for another 30 years.”

The company would prefer to hold the festival in February when the weather is more settled, and on a Saturday instead of the current Sunday, Turnbull said.

Given logistics such as accommodation and people getting to work on Monday, a Saturday was preferable.

The company hoped to have the festival timing locked in by August.

“We will use that time to rethink the format. It’s very expensive to run and we think it could be done a bit smarter.”

A joint statement issued on Tuesday said that in response to “financial constraints”, the Toast Martinborough board had initiated a capital raise amongst existing shareholders, but the attempt fell short of the required support.

Foley Wines’ offer to buy out shareholders and provide the funds to settle the festival’s debts with suppliers were supported unanimously by shareholders, it said.

The wine company, well-embedded in the Martinborough community through its Te Kairanga and Martinborough Vineyard wineries, the Lighthouse Gin distillery, and the recently opened Runholder, would revitalise the festival and its format, the statement said.

The acquisition also aligned with the wider Foley business’ broader interests in the region, including Wharekauhau Country Estate, and Wellington’s Pravda, Shed 5, and Crab Shack.

Foley Wines is 80 per cent owned by the Foley family of California, with about 6 per cent owned by New Zealanders. Established in 1988 as Grove Mill Wines, it merged with Foley in 2012. Brands include Vavasour, Dashwood, Grove Mill, Sanctuary, Te Kairanga and Mount Difficulty. The company also makes gin. Revenue in the 2022 financial year was $66.6m.

Outgoing Toast Martinborough chairman Pete Monk noted the hurdles faced by the festival in recent years and expressed gratitude that Foley Wines could step in.

“Toast has been an iconic event in the Wairarapa for three decades. However, the past few years have posed significant challenges,” he said.

“This outcome hands over custodianship to one of our founding shareholders, meaning the festival is in excellent hands for its next chapter.”

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.