Pernod Ricard New Zealand late last week declined to speak in detail about the company’s plan to drop some of its Gisborne chardonnay growers and a significant amount of chardonnay grapes.

Tony Hoksbergen, the company’s general manager of viticulture and wineries told Wine Technology magazine it was time to sit down with their growers one by one.

“There has been a lot of media comment about this and we have probably said all we want to say at this time.

“Although I would comment that now it’s time to sit down with our growers and have discussions with them individually. This has had a significant amount of media coverage already and we now need to deal with this on a personal basis.

”Mr Hoksbergen acknowledged the mood of the group meeting between Pernod Ricard and its Gisborne growers on Thursday reflected disappointment within the region.
“There’s no doubt that growers are disappointed, but I think that there’s actually a realisation that measures were necessary.

“I wouldn’t say they are happy but there is an acceptance that it is required. Now we need to sit down with the parties that are affected – and obviously it’s not everybody – and work it through with them on an individual basis rather than through the public domain.”

Exactly when growers will feel the impact of Pernod Ricard’s decisions will vary, Mr Hoksbergen said.
“There will be some who will just work their way through a normal termination provision; all our agreements have reciprocal termination provisions in them. Or we will talk to them about early exit by way of compensation.”

Pernod Ricard’s action against the Gisborne growers has been widely attributed to the world-wide wine glut, and the strong popularity of New Zealand’s sauvignon blanc wine, compared to that of chardonnay.

However, John Clarke, president of Gisborne Winegrowers, says he doesn’t believe growers were expecting the extent of the cuts that were outlined to them at the meeting.

“I guess there was an expectation on the part of the growers that there would be some additional restrictions on tonnages this year and that there would probably be some blocks that may have notice put on them in terms of their contract because some of that happened at the end of last year.

“But I think the size and scale of this caught everybody by surprise.”

Mr Clarke says the cuts will likely amount to about 40 per cent of what Pernod Ricard normally takes from their contracted growers - not 40 per cent of what they process through the winery.
“So that’s the sort of numbers they are talking about. It’s a bit hard to pin-point, because they haven’t finalised buy-out options with growers and until that’s done you don’t actually know what the impact is.

“But it’s about 40 per cent of what they would (normally) take from their growers, not what they put through the winery.

He says growers had been aware of the situation for about a fortnight, so the meeting was more to hear the rationale behind the move.

“I think it’s fair to say that once that was explained, then much in all that no one likes the outcome, they can understand to a degree why it’s happening.”

“There’s one option where some blocks have been given two years’ notice under the contract, but there’s a lot of it that’s two years’ notice plus the offer from the company to buy out that obligation and effectively cancel the contract.
“So growers will be compensated for the two years coming, but then the contract will no longer exist.  In those cases the growers will be free to do whatever they like with their grapes, but the options are quite restricted given there aren’t ready markets out there.”

Mr Clarke says many of the grapes affected by the cut-backs are chardonnay. He said chardonnay had been taking a beating because of the popularity of sauvignon blanc and the amount of that variety crowding shop shelves.

He said Gisborne Winegrowers has been looking at the fact that the Gisborne district would be somewhat vulnerable to any downturn in the popularity of chardonnay, irrespective of what has now happened with Pernod Ricard growers.

The association had been doing quite a lot of work on marketing strategies around other varieties of grapes that grow well in the district’s climate.

“Some of the aromatics for instance. There are some issues around the pinot gris style and around getting that right - but we think we can tell a story that distinguishes the style of Gisborne wine from other regions.

"If we can get our heads around that and put it into a marketing strategy, then that is the direction we are likely to take over the next few months.”