6 Dec 2013

Delegat's wants to become global high-end wine company

7:29 am on 6 December 2013

Oyster Bay winemaker Delegat's Group wants to become a global high-end wine company, with a plan to buy more vineyards in New Zealand, Australia and further afield.

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Speaking at the company's annual meeting in Auckland on Thursday, founder and managing director Jim Delegat told shareholders that wine sales had grown ten-fold over the last decade, and it was now time to aim higher.

Delegat's bought Barossa Valley Estate in Australia for $A28 million last year and Jim Delegat says while the vineyard is currently underperforming it has huge sales potential.

He says the purchase is the company's first step to becoming a truly global player in the super-premium wine market.

Mr Delegat says the plan for the next 10 years is to grow the business by 50%, taking it from 2 million cases to just over 3 million cases.

He says although Delegat's may consider another wine region in the future, the focus at present is on establishing and developing the Barossa Valley Estate brand.

Mr Delegat says in the next three years Delegat's will spend $132 million in the acquisition of additional vineyards and vineyard land both in South Australia and New Zealand, along with establishing wine making facilities to handle the increase in production.

He says that, along with the $A28 million the company invested last year, will take it through to the 2019 sales period.

Mr Delegat says the company also plans to start selling its wine in Japan and China next year.

He says it views Japan as a valuable market and it plans taking the Oyster Bay brand there.

Mr Delegat says with the acquisition of Barossa Valley Estate the company sees China and Asia as a target market for high quality red wine.

He says that's a motivation for opening in-market sales offices in China and Japan.

Mr Delegat says sales for the first five months of the current financial year are meeting targets and he is expecting the company to make a full year after tax profit of $29 million, which is 10% higher than last year.