201900453
Application summary
14.
Cloudy Bay Vineyards Limited (the Applicant) seeks consent to acquire the
Investment, being approximately 9.52 hectares of sensitive land located at 164
Jacksons Road, Rapaura, Blenheim
(the Land).
15.
The diagram below shows the Land and its location in New Zealand.
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INFORMATION
Diagram 1 -
shows the outline of the Land in light blue (left), and the relative position of the Land in New Zealand
(right)
OFFICIAL
16.
The Applicant is a private New Zealand-incorporated company, which forms part of
the Louis Vuitton Moet Hennessy worldwide luxury goods conglomerate. The
Applicant is ultimately 66% owned by France-listed LVMH Moet Hennessy Louis
Vuitton SA
(LVMH) and 34% owned
THE by Diageo Pie, a UK-listed alcohol beverage
producer.
17.
The Applicant is a winemaker based in the Marlborough region, particularly well
known for its sauvignon blanc wine which accounts for 77% of its total production.
98% of the Applicant's sauvignon blanc is exported.
UNDER
18.
The vendor of the Land is Barbara Mary Muir, Nathan Paul Muir, and Wisheart
Macnab & Partners Trustee Company Limited as trustees for the Muir Family Trust
(the Vendor). The Vendor and all the individuals with control of the Vendor are non
overseas persons (i.e. New Zealanders). The Vendor has decided to sell in order
that the individuals with control of the Vendor can realise their investment.
19.
The Land consists of approximately 7.6 hectares of planted land, and approximately
1.9 hectares of headlands, which is not plantable. The planted land is currently 6.3
hectares of sauvignon blanc grapes, and pproximately 1.3 hectares of pinot gris
RELEASED
grapes.
20.
On acquiring the Land, the Applicant intends to replant the pinot gris grapes to
sauvignon blanc. The Applicant submits that the replanting of the grapes and the
subsequent export of sauvignon blanc wine produced from the vineyard will result in
additional export receipts of an aggregate of approximate!
by 2026, will
9(2)(b)(ii)
create a small number of permanent and seasonal jobs, and will result in a small
amount of additional investment for development purposes.
21.
The benefits to New Zealand that are likely to result from the Investment include:
Case 201900453 - Page 7
Moderate weighting
Increased export receipts (high relative importance)
- the additional grapes harvested through the
Applicant's acquisition of the Land are expected to
produce approximately
in surplus export
receipts between 2021 and 2026, with an additional
per annum from 2026.
9(2)(b)(ii)
Previous investments - the Applicant has invested in
New Zealand for over 35 years, including land and
buildings to the value of approximately $49 million and
$14.2 million worth of vineyard developments.
Weak weighting
Jobs (high relative importance) - the Investment is ACT
likely to create approximately 0.4 FTE temporary roles,
0.8 FTE annual contract roles and 0.15 FTE permanent
roles, over and above that likely to occur without the
Investment.
Additional investment for development purposes
(high relative importance) - the Applicant is likely to
undertake capital expenditure of approximately
9(2)(b)(ii)
which includes replanting of vines, new
vineyard equipment and new tanks to accommodate the
additional grapes.
INFORMATION
Enhance the viability of other investments -
acquiring the Land will likely increase revenue for the
Applicant, whom has made previous investments for
which consent under the Act was required.
22.
Guidance for applying the Act is set out in
Attachment 2.
OFFICIAL
National Interest
23.
This application for consent was received prior to commencement of the Overseas
Investment (Urgent Measures) Amendment Act 2020 and the transaction for which
THE
consent is required was also entered before commencement. Accordingly, the
provisions of the Overseas Investment (Urgent Measures) Amendment Act 2020,
including the 'national interest' assessment, do not apply.
Timing
UNDER
24.
The Applicant entered into an Agreement for Sale and Purchase
(ASP) on 17 July
2019. A condition of the ASP requires the Applicant to obtain 010 consent on or
before 17 April 2020. An extension of the deadline of 3 months has been utilised,
resulting in a commercial deadline of 17 July 2020. The Applicant has advised they
are seeking a further extension from the Vendor.
25.
On 3 April 2020, the Overseas Investment Office
(the 010) sent the Applicant a
letter advising of its intention to decline the application
(ITD Letter). Initially, the
RELEASED
Applicant had until 27 March 2020 to respond to the ITD Letter. This date was later
extended to 15 June 2020 to account for the disruption caused by the Covid-19
pandemic. On 3 June 2020, the Applicant informed the 010 it had contacted the
offices of Hon Grant Robertson and Hon Eugenie Sage to request that the Ministers
'call in' the pending application.
26.
The 010 sent a briefing to Hon Eugenie Sage and Hon Stuart Nash on 2 July 2020
seeking their decision as to whether to 'call in' the application. On 8 July 2020, the
010 received notice from the Ministers of their decision to 'call in' the application.
Case 201900453 - Page 8
ACT
INFORMATION
OFFICIAL
THE
UNDER
RELEASED