Failing Winery Tour to New Zealand for Deloitte
Partners from consultancy Deloitte reported another business failure that befell to one of the wineries in Marlborough region, New Zealand due to its rapid expansion since 2003 amid oversupply of grapes and the rise of excise tax and value of NZ dollar.
Otuwhero Estates Group fell into Deloitte administration with partners Grant Jarrold and Shari Carter when the company’s spread of intercompany advances to other four related companies fell short of more than $8 million.
Early in December, business failure has also struck Marlborough wine group as a whole, including Awatere Vineyard, Cape Campbell Wines, and Gravitas and Edzell Vineyard due to wine oversupply in the midst of the global financial meltdown that raised the price for wine around $1,300 to $2,300 per ton. In the second half of 2010, at least eight wineries have suffered major business failure.
Prior to this business failure, the wine industry in Marlborough region has generated revenue of $1 billion from exports, but pummeled severely due to low profitability in Australia.
The winery, which has total assets of a little more than $40 million, has a liability of $29.93 million overall, with $19.92 million being owed to BNZ. Otuwhero Estates, Otuwhero Estate Wines and Otuwhero Estates No3 currently hold the $28.198 million accounting for the land ownership and improvements of it.
Deloitte partners Jarrold and Carter remained undecided as to the status of the sale of the properties, saying the business failure has made it hard for them to identify the exact amount of money that the prospective creditors can get from the business, which, according to them, would depend only on the profit from selling the land and wine.