Lion bites, but Montana will remain independent, says chairman Peter Masfen
New Zealand's Montana Wines will continue its rapid growth plans despite questions being raised over its future after Lion Nathan grabbed 19.9% of the company last week.
Montana executive chairman Peter Masfen told just-drinks.com that he sees the future of Montana as an independent wine maker and has no plans to allow Lion, or other multinationals like Australia's Foster's Brewing Company, to swallow the company.
Masfen also told just-drinks.com that Montana will plant an extra 700 acres a year, spread between its three growing areas; Gisborne, Hawkes Bay and Marlborough. The company will also stick to its 18% a year growth target.
There has been much speculation over what Lion Nathan will do with Montana. But it is clear that Masfen won't give away the company without a fight. He is also concerned that high overheads in the New Zealand wine industry will force smaller companies out of the market - but not Montana.
This is the full text of just-drinks.com's interview with Montana's Peter Masfen:
Just-drinks: You didn't seem very happy last week when Lion upped its stake to 19.9%. Why was that?
PM: I thought that our shares were worth more than what Lion were paying [NZ$2.30 each]. But I did not make any comment that the move was antagonistic, all I did was make observations over the price they paid.
J-D: Are you happy having Lion as a one-fifth shareholder?
PM: We've had a long-term association with Lion in distribution so we have a working relationship with them.
J-D: Has Gordon Cairns [Lion's CEO] spoken to you about where he would like your relationship to go?
PM: Yes, but you wouldn't expect me to tell you what he plans.
J-D: Where would you like to see Montana go?
PM: Our long-term plans are very clear. We are committed to continuing the growth and development that we have been doing for a long time now. We have grown over the last nine years by about 18%compound and our strategic plans are to continue that growth. We will continue to make the investment that is necessary to do that. So really our direction and plans are pretty clear cut.
J-D: Do you see Montana staying an independent company or will it become part of a multinational?
PM: I would personally like to see us stay exactly as we are. We are a New Zealand-owned company that has quite enough momentum and presence to do its own thing.
The wine industry has gone through some changes in the last week with DB Group putting Corbans up for sale and BRL Hardy lifting its stake in Nobilo Wines from 25% to 40%.
J-D: What is the future for New Zealand wine?
PM: Two different issues; Montana and the industry in general. Montana's position is clear. The industry in general will always be rather boutiquey in world terms because we only produce 1% - 2% of world production.
This is actually a wonderful opportunity for New Zealand because we can concentrate on high value, high quality products with a distinctive flavour profile. Now having said that, we still have to produce wines that are competitive in price in a world sense and there are a lot of producers who will not be able to do that because as volume increases economies of scale become important.
People might say Montana is too small - but they are wrong. Montana is heavyweight and we are building up strong brands with distributors and, given the strength of our products, the future is good.
But that is not the case with a lot of participants in the industry and maybe we'll see mergers of some of the smaller ones and some may disappear.
David Robertson, just-drinks Asia-Pacific correspondent
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