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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - July 2023 Decision
Booze Transnationals Continue Wine Industry Buy Up
Cloudy Bay Vineyards Limited (France 66% United Kingdom 34%) has approval for the acquisition of a leasehold interest in 12.9464 ha of land located at 440 Old Renwick Road, Rapaura, Marlborough, from Kesteven Farm Limited (New Zealand 100%). The price is withheld. The OIO says: "The Applicant is an established New Zealand winemaker, well-known for its Sauvignon Blanc wine which represents approximately 80% of its annual production of which 98% is exported. Cloudy Bay is ultimately 66% owned by LVMH Moët Hennessy Louis Vuitton SA, a multinational luxury brand conglomerate, and 34% owned by Diageo PLC, a United-Kingdom based alcohol beverage company".
Now, this is a trifling purchase in the context of foreign ownership of New Zealand's wine industry and just one of a continuing series of land purchases by Cloudy Bay in Marlborough. But the point needs reiterating that what is thought of as the "New Zealand" wine industry is now owned (and has been for years) by transnational corporations.
The November 2023 North & South magazine had a very informative article by Stephen Wong titled "Who Owns Our Wine?" To quote: "... the world's largest luxury company, LMVH (Louis Vuitton Moët Hennessy) owns Cloudy Bay. Created in 1985 by Cape Mentelle's founder, David Hohnen, Cloudy Bay was sold, along with Cape Mentelle, in 2003 to Veuve Clicquot, which is owned by LMVH through Moët Chandon. Although Cape Mentelle itself was sold to the Endeavour Group at the start of 2023, Cloudy Bay remains with LMVH". Cloudy Bay produces Marlborough sauvignon blanc, which "makes up 85% of our wine exports, almost all of it from Marlborough".
Wong's article lists the other four transnationals who own chunks of the NZ wine industry - E&J Gallo, Constellation Brands, Treasury Wine and Pernod Ricard. "According to New Zealand Winegrowers, foreign owners currently control about 33% of our production, which is significantly less than it was in 2009, when they indicated it was closer to 50%".
LMVH is owned by French billionaire Bernard Arnault. "The Paris Public Prosecutor's office is investigating financial transactions allegedly involving the French billionaire Bernard Arnault and a Russian businessman. The prosecutors are investigating transactions involving Arnault, whose ownership of the luxury goods group LVMH has made him the world's second richest person after Elon Musk, and Nikolai Sarkisov, Reuters reported, citing a statement from the Paris Prosecutor's office".
"Arnault's fortune is estimated to be worth $US164bn, according to Bloomberg, and it at one point made him the world's richest man on paper. He and his family own 41% of LVMH, the group that owns luxury brands including the handbag brand Louis Vuitton, Moët champagne, Hennessy cognac, the jeweller Tiffany's and the watchmaker Tag Heuer, among many others".
"Arnault, who is 74, is preparing to hand on his empire, which he founded 35 years ago and grew by acquiring some of the world's best-known fashion brands and expanding sales to aspiring consumers in Asia in particular. In January 2023, he appointed his daughter, Delphine, to run Christian Dior, the second-biggest brand in LVMH in a move that some analysts said set the scene for a family race with her brother, Antoine, over who would run the company." (Guardian, 29/9/23).
As for Diageo, the other transnational owner of Cloudy Bay - in 2020 it was fined $US5 million by the US Securities and Exchange Commission for "materially misleading" investors about demand for its drinks by concealing sales of unwanted stock to distributors. And in 2022 it was fined £1.2 million by the Scottish Environment Protection Agency, for failing to accurately declare carbon emissions at three of its Scottish whisky plants (Diageo said it was an "administrative error").
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Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.