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Competition and consolidation

Hawke’s Bay is one of the most sophisticated horticultural and pastoral farming regions of New Zealand. Traditionally, many of its hill-country sheep and beef farmers owned, leased or rented land on the Heretaunga Plains and other lowlands between Napier and Hastings and further inland. Here, they fattened their lambs and finished their cattle. Advances in pastoral farming on Hawke’s Bay’s hill country have transformed the carrying capacity of these farms to the extent that they now finish a much higher proportion of their sheep and cattle on their own properties. Aerial topdressing and other scientific developments in pasture management have allowed them to increase the carrying capacity of their properties and reduced the need to sell their stock prematurely if the season is difficult or find grazing to ‘finish’ them on the lowlands. It has become less common to see sheep grazing on the vineyards of the region during the winter months.

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Vineyards are now a prominent feature of the Hawke’s Bay landscape, and competition between vineyards, orchards and other horticultural crops is intense. By 2002, the location of vines showed a distinctive pattern, especially when their distribution is compared with the pip- and stone-fruit orchards of the plains (Figure 6.5). Orchards take first choice of the land and cluster on the clay and alluvial soils that form a halo-like effect around the urban settlements of Havelock North, Hastings and Flaxmere. In contrast, vineyards have found their linear niche along the four rivers of the region and on pockets of land along the Bay View and Te Awanga coastlines. More than 80 per cent of Hawke’s Bay’s vines are planted on the gently sloping terraces adjoining four of its rivers – from north to south: the Esk, Tutaekuri, Ngaruroro and Tukituki.

In 1988, Peter Hubscher, CEO of Montana, bought land and planted 250 hectares in the red varieties of Bordeaux on the Heretaunga and associated plains. Montana stayed off the Gimblett Gravels, settling instead for the clay-based soils that their French advisor Cordier recommended for the Bordeaux blends. This initiative saw Montana (now Pernod Ricard) successfully consolidate their red-wine production to the large parcels of land on the terraces of the upper Ngaruroro River. Jim Delegat, of Delegat’s Wine Estate, on the other hand, bought land on the Gimblett Gravels as well as developing vineyards in other localities of Hawke’s Bay such as the higher gravelly terraces of the Ngaruroro River where Chardonnay and Pinot Noir were planted. By the end of 2012, Delegat’s owned 440 hectares of vines in Hawke’s Bay, including three parcels of land on the Gimblett Gravels.

When the Gimblett Gravels vineyards and winery of Matariki Wines were placed in receivership in late 2012, Delegat’s purchased the 61 hectares of vineyards and winery assets for NZ$8.5 million early the following year. With the winery included, this transaction values the Matariki vineyards at about NZ$140,000 per hectare. The predominantly Merlot and Syrah vines adjoin the existing Delegat’s vineyards and complement those grown by this enterprise.

The details of the transaction demonstrate the value of mature vineyards to an efficient enterprise such as Delegat’s. By acquiring Matariki’s vineyard, Delegat’s Wine Estate consolidated their very strong position in Hawke’s Bay, bringing their holdings to 500 hectares, or 10 per cent of Hawke’s Bay’s total vineyard. Delegat’s did not purchase the brands owned by Matariki but will bottle the wine made from these vineyards under the company’s established labels. As one of New Zealand’s largest and most successful companies with annual sales of wine exceeding 4,000,000 litres, Delegat’s Wine Estate Ltd is well represented in Hawke’s Bay.

For almost all of the 1980s and 1990s, the Hawke’s Bay vineyard was less than 2000 hectares in area. It reached its lowest point of 1200 hectares in 1989, three years after the 1986 vine-pull scheme. Its vineyard grew steadily over the 1990s to attain its pre-vine-pull area of almost 1900 hectares by 1999. Vinifera varieties, including some Muller Thurgau, were responsible for this growth. From the millennium, the pace quickened, and the area of the Hawke’s Bay vineyard increased by more than 3000 hectares in a decade to reach 5046 hectares by 2011. This robust recovery reflects the demand for the distinctive mix of grape varieties that are being grown successfully in Hawke’s Bay and the resilience of the region’s rural economy. The continuing interest of some of New Zealand’s largest and most successful wine enterprises in consolidating their presence in Hawke’s Bay suggests that this region’s winegrowing will continue to prosper.

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