May 2002 decisionsFoodland of Australia buys Woolworths New Zealand from Jardine-Matheson Carter Holt Harvey sells BJ Ball to Datenga of Australia … … and Macquarie Goodman buys “The Gate” and BJ Ball’s Penrose office Clarity Partners of the US takes a third share of Walker Wireless Preussag Energie approved to increase its interest in Pohokura Gas Field Hagaman puts Dunedin Casino shares into trust Majority Australian interest in Marstel Terminals approved CDL Land buys Browns Bay, Auckland, land for subdivision Neil Construction of Malaysia buys Henderson land for subdivision Dairy farm bought for new Favona Prospect at Martha Mine, Waihi Juken Nissho buys lifestyle property for its shareholders and clients
Foodland of Australia buys Woolworths New Zealand from Jardine-MathesonFoodland Associated Limited of Australia has approval to acquire the supermarket operations owned by Woolworths New Zealand Limited. The mechanics of this are by purchasing “certain trade marks used in the business of Woolworths”, and taking over Denstree Corporation Limited, which owns Woolworths New Zealand. “Woolworths operates supermarkets in New Zealand under the Woolworths, Big Fresh and Price Chopper brands.”
The purchase is for a sum “to be advised” from “existing shareholders in Dairy Farm International Holdings Limited”: the Jardine-Matheson Group of the U.K. (but based in Hong Kong, 57.45%) and 42.55% in Hong Kong shareholdings. Dairy Farm operates more than 2,000 supermarkets, hypermarkets, convenience stores, drugstores and restaurants across Asia and the Pacific. It quit Australia last year by selling the Franklins chain.
News media reports put the price at $690 million. A rival bidder was reportedly the unrelated Woolworths Australia (Press, 11/6/02, “Foodland tipped to buy Woolworths”, p.C2).
Foodland is a major supermarket operator in Australia, and in Aotearoa indirectly owns Progressive Enterprises Limited, which operates the Foodtown, Countdown and 3 Guys supermarket chains.
The takeover was bitterly fought for over a year by Progressive’s and Woolworths New Zealand’s main competitor and market leader, New Zealand-owned Foodstuffs. The deal was controversially approved by the Commerce Commission under looser criteria because the application was lodged just before tighter market dominance criteria came into force on 26 May 2001. The Commission subsequently ruled that it would have failed the new criteria, saying that “the proposed acquisition would result in the number of firms shrinking from three to two, and market concentration rising accordingly. The Commission also found that the barriers to entry into these markets are high, so that the two incumbents would not face competition from potential new entrants. In these circumstances, and given other characteristics of the markets, the Commission was concerned that the acquisition would materially enhance the potential for coordinated market power.” (“Commerce Commission releases its Progressive decision”, Media Release 2001/139, 21/12/01, http://www.comcom.govt.nz/publications/display_mr.cfm?mr_id=916.)
Foodstuffs challenged the Commerce Commission’s approval under the old legislation through the courts, losing in the High Court, winning in the Court of Appeal, but losing again in the Privy Council. The case became a high profile political issue when the government patched the legislation following the Court of Appeal decision, to declare that the old legislation should be used for all applications lodged before 26 May – all, that is, except for the Progressive application. Progressive gained its market power through the Privy Council decision anyway, but clearly in breach of the objectives of the new legislation.
In June, Foodstuffs took a desperate last-minute case to the High Court, requesting a judicial review of this OIC decision on the basis that it did not take into account the national interest which had been breached as established by the finding of the Commerce Commission when applying the new legislation. There were accusations that Foodstuffs was trying to delay the takeover until after the 13 July 2002 anniversary date of the Commission Commission’s approval, after which the approval would lapse and the case would have to be reheard under the new legislation. In the end the parties settled out of court; it was most unlikely Foodstuffs would have succeeded as national interest criteria apply only to land – not a major part of the deal – and fishing quota. (Press, 15/6/02, “Foodland confident over court action”, p.C4; 18/6/02, “Woolworths sold for $690m”, p.C1; New Zealand Herald, 12/6/02, “Lawyers feast on baked beans”, p.E1; “Merger defies Government intention”, p.E2; 18/8/02, “Woolworths rivals settle out of court”).
A pressing reason for Progressive to pursue the takeover so desperately was voiced by the OIC as a rationale for its approval: falling market share in the face of Foodstuff’s success. “The collective market share of Progressive and Woolworths has been declining for some time in the face of price competition.” Progressive’s operations were nearly doubled by the acquisition, and it did not anticipate many closures of stores, although Big Fresh stores were already being rebranded by Woolworths, and Progressive cast doubt over the survival of the 3 Guys and Price Chopper brands. Ten senior Woolworths executives were made redundant, but no redundancies were anticipated at distribution level (Press, 20/9/02, “Foodland’s profit jumps 73%”, p.B5). Woolworths owned about 85 supermarkets with a market share of about 20%. Progressive has about 68 stores with about 20% market share, but in addition, through its wholesale distributors The Supply Chain and Red Arrow tobacco, supplies the 39 independent owner-operated SuperValue and FreshChoice chains that have a 5% share. Accordingly, the Commerce Commission regarded these chains as associated with Progressive and included their 5% in the merged company’s market share. Progressive also owns Farmers, New Zealand’s second largest chain of department stores. (New Zealand Herald, 12/6/02, “Grocers amble down the aisle”, p.E1; 15/6/02, “Lawyers feast on baked beans”, by Simon Hendery, p.C1”; Commerce Commission decision No. 448, Progressive Enterprises Ltd and Woolworths (NZ) Ltd, 14/12/01).
Foodstuffs has 380 outlets with a total market share of 55%, owning Pak ‘N Save, New World, Write Price, Four Square, Four Square Discounter, and On The Spot. Foodstuffs is actually three independent companies – Foodstuffs (Auckland), Foodstuffs (North Island) based in Wellington, and Foodstuffs (South Island) based in Christchurch – each a cooperative owned by the owners of its retail outlets. However they share ownership of Foodstuffs (New Zealand) Limited, a small company which represents the three cooperatives on industry bodies, but also owns the banners New World, Pak’N Save, and Four Square, and leases those to the three Foodstuffs companies which operate these as a franchise. Foodstuffs (Auckland) bought Progressive’s Birkenhead Foodtown after the Commerce Commission ordered it be divested (Progressive’s Te Awamutu supermarket was also ordered to be divested). Each Foodstuffs company also operates a cash-and-carry operation. In Auckland this is called James Gilmour & Co Limited, in Wellington, Toops Wholesale Limited, and in the South Island, Trents Wholesale Limited. Foodstuffs (South Island) also owns Murdoch Manufacturing, which produces labels. (Press, 11/6/02, “Foodland tipped to buy Woolworths”, p.C2; 13/6/02, “Supermarket spread continues”, p.B3; 3/7/02, “Foodstuffs year ‘outstanding’”, p.B4; New Zealand Herald, 18/8/02, “Woolworths rivals settle out of court”; Commerce Commission decision No. 448, Progressive Enterprises Ltd and Woolworths (NZ) Ltd, 14/12/01.)
The sale included the following land:
· 1.4 hectares of freehold at 271 Richmond Road, Grey Lynn, Auckland and Oue and Bays Road Waiheke Island.
· 56 hectares of leasehold comprising: · 24 hectares at Woolworths at the Lynnmall Shopping Centre, New Lynn, the Southmall, Manurewa, Howick, Mairangi Bay, Massey and at Ostend Road, Oue Road and Kuaha Street, Waiheke Island and the Big Fresh at Mt Wellington and West City, Henderson Centre; · 7.1 hectares at 129 Victoria Street, Dargaville, 13 Tauroa Street, South Whangarei and 4 Okara Drive Whangarei; · 8.7 hectares at the Bush Inn Centre, Waimari Road, Upper Riccarton, Christchurch and 999 Ferry Road, Christchurch; · 15 hectares at Bayfair Girven Road, Mt Maunganui and Palm Beach Shopping Centre, Papamoa; and · 1.1 hectares at 85 Whitaker Street, Te Aroha and 119 – 122 Maniapoto Street, Otorohonga, Auckland. Carter Holt Harvey sells BJ Ball to Datenga of Australia …Edwards Dunlop (NZ) Limited, owned by Datenga Pty Limited of Australia, has approval to acquire the business assets and undertakings of the New Zealand paper distribution business of Carter Holt Harvey Limited known as B J Ball, including 0.56 hectares of leasehold at 33 Jarden Mile, Wellington for $23,179,166.
According to the OIC, Datenga “is the second largest independent paper merchant in Australia”, though BJ Ball claim on their website that the Edwards Dunlop Group is “the largest independent paper merchant group in Australasia”. However it appears that the OIC’s information has mixed two rankings: the New Zealand Forestry Industry Information Centre (see http://www.nzforestry.co.nz/nzf_archive.asp?viewarchive=yes&articleid=622) reports that the enlarged group is second to PaperlinX, but the largest “independent” paper merchant with 20-25% of the Australasian market The group also includes Raleigh Paper, which was sold by Carter Holt Harvey and the same time (see http://www.bjball.co.nz/about/0,11179,0,00.html). BJ Ball will continue to sell products of Carter Holt Harvey and its parent, the International Paper Company of the U.S.A. BJ Ball was founded in 1921 in Auckland.
“The proposed acquisition is part of a larger transaction in which the Australian and New Zealand paper distribution businesses of Carter Holt Harvey Limited are being acquired. The proposed transaction is viewed as a way of expanding the Applicant’s existing business in Australia and to establish a presence in New Zealand. The acquisition is likely to ensure/increase market competition given that the only other potential purchaser(s) of the business operations are likely to already have a business presence in New Zealand.”
According to Carter Holt Harvey’s financial results for the six months ended 30 June 2002, it sold its two paper distribution businesses, BJ Ball Papers and Raleigh Paper, for A$61 million (NZ$74million) (see http://www.carterholt.co.nz/invest/Q2_02_COMMENTARY1.pdf).
Carter Holt Harvey is owned as follows: · International Paper Company Limited of the U.S.A. (51%) · Franklin Resources Inc. of the U.S.A. (5.12%) · Dellaware International Advisors Limited of the U.K. (5.11%) · Listed shares in Australia (5%) · Other persons who may be “overseas persons”(13.77%) · Listed shares in Aotearoa (20%) … and Macquarie Goodman buys “The Gate” and BJ Ball’s Penrose officeMacquarie Goodman Funds Management Limited of Australia has approval to acquire 1.6 hectares at 395 Church Street, Penrose, Auckland for $4,837,209 from Carter Holt Harvey Limited (ownership as above) to add to the adjacent industrial complex which Macquarie is developing, called “The Gate”. In a change of plan, Macquarie also has an OIC approval to acquire the whole property on which “The Gate” is being developed. This consists of 13.8 hectares at 373 Neilson Street, Penrose, Auckland, being purchased for $39,393,407 from Penrose Logistics Centre Limited of Aotearoa.
The purchase of a six hectare property by Macquarie Goodman Funds Management was approved by the OIC in May 2001, though the purchase price was not revealed. However, “Rather than acquire portions of the property in a multi-stage process the Applicant has re-negotiated the proposed acquisition and now intends to acquire the whole of ‘The Gate’ in one acquisition.”
The Church Street property is “surplus to Carter Holt Harvey Limited requirements following the recent sale of its paper trading division B J Ball Papers which tenants the property” – see the OIC decision above. Clarity Partners of the US takes a third share of Walker WirelessClarity Partners LP of the U.S.A. has approval to acquire up to 33% of Walker Wireless Limited for $16,666,666. Walker Wireless Limited provides connection to the internet and for other data transmission purposes through wireless networks (transmitting on various radio frequencies), mainly to business customers. Clarity Partners “is a private equity and venture capital firm specialising in investment in communications companies including telecommunications, technology, media, e-commerce and business services”. Walker Wireless sought the additional capital to “fund the development of new technology”. Founded in 1985, its current shareholders include Todd Capital, Stephen Tindall, Craig Heatley and Rod Inglis (see http://www.walkerwireless.com/frameAbout.html). Preussag Energie approved to increase its interest in Pohokura Gas FieldPreussag Energie GmbH of Germany, has approval to increase its interest in the Pohokura Field Development joint venture to up to 36%. The joint venture’s assets include 54 hectares in two blocks of 10.4 hectares and 44 hectares at Otaraoa Road and Main North Road (SH 3), Motunui, Taranaki. They are being purchased for $26,834,906 from Energy Exploration NZ Limited. Energy Exploration is owned 40% by Royal Dutch Petroleum Company (N.V. Koninklijke Nederlandse Petroleum Maatschappij) of the Netherlands, and 40% by Shell Transport and Trading Company of the U.K.
“[Preussag], who currently has a 33.33% interest proposes to acquire a further 2.5288% interest in the Pohokura Field Development joint venture. The joint venture owns approximately 54 hectares of land at Motunui, Taranaki. The joint venture proposes to develop on part of the land a production station for the recently discovered Pohokura gas and condensate field offshore of Motunui. The development will include the construction of offshore platforms, a drilling programme, the laying of pipelines and a shore crossing together with the construction of an onshore production and processing station and storage facilities for LPG and condensate.
The Maui gas field currently produces about 80% on New Zealand’s gas supply. A recent estimation of available Maui reserves suggests that this crucial resource may be depleted as early as 2007. The proposed development of the Pohokura field will ensure that New Zealand has access to gas supply beyond this period to meet the demand for gas.
… The part of the land not directly involved in the development will be used as a buffer zone and is likely to be leased to a local farmer for casual grazing.” Hagaman puts Dunedin Casino shares into trustThe Casino Trust, beneficially owned 25% each by ER Hagaman, SA Johnston and TD Scott (all of Aotearoa) and JL Hagaman of the U.S.A., has approval to acquire up to 42% of Dunedin Casinos Limited for a suppressed amount from ER Hagaman.
As part of an estate planning exercise Mr Hagaman proposes to settle some assets, including his shareholding of the Dunedin Casinos Limited, into a family trust being The Casino Trust. In this regard he proposes to enter into an agreement for sale and purchase to sell his shareholding in Dunedin Casinos Limited. Consent is required as one of the four trustees, J L Hagaman (Mr Hagaman’s daughter) is an overseas person. Mr Hagaman has included her as a trustee as three of his seven children reside in the United States. With Miss Hagaman being a trustee this will ensure that the interests of the United States based children will be protected.
Earl (ER) Hagaman owns the Scenic Circle Group which, with 14 hotels claims to be “New Zealand’s largest domestically owned and operated hotel group” (see http://www.scenic-circle.co.nz/newsitem.asp?id=10). Majority Australian interest in Marstel Terminals approvedMarstel Holdings Pty Limited, 55% owned by the Australian Public, 40.5% by GS and AE Catley of Aotearoa, and 4.5% by TR Gunning of Australia, has approval to acquire Marstel Terminals Limited, including 1.2 hectares of leasehold at Gabador Place, Mt Wellington, Auckland, for a suppressed amount from GS and AE Catley. However it appears that the purchase did not go ahead. The OIC states that:
The Marstel group operates a bulk liquid handling and storage business including hazardous and non-hazardous chemicals, edible oils and petroleum products in New Zealand and Australia. The Marstel group requires external capital in order to develop and construct new bulk liquid handling and storage facilities in Melbourne and Brisbane. This proposal will allow expansion for the Marstel group to reach a size and scale which will enable it to become an international player in the bulk storage market, thus enhancing facilities and access to business opportunities in New Zealand.
The proposal will allow the Marstel group to expand in liquid storage areas such as petroleum and sulphuric acid in New Zealand through the increase in size and scale resulting from the investment. The increased scale of Marstel will potentially allow it to compete with its larger competitors in New Zealand. The increased Australian developments resulting from this proposal will allow Marstel to provide full supply chain management services to its customers using both New Zealand and Australian locations under a single management contract.
Marstel Terminals (Managing Director, Graham Catley) has been trying to get a foothold in providing bulk storage facilities in Australia. In March 2002 it was granted Environment Protection Authority Victoria approval to begin work on a new Coode Island, Melbourne, facility, after a long battle to compete against the monopoly provider, Terminals Pty Ltd. It had the support of a number of dissatisfied Terminals customers, and the advantage of Terminals’ poor record of handling the toxic chemicals (The Age, 2/5/01, “Wharfies hit by Coode fumes”, http://www.theage.com.au/news/2001/05/02/FFXRHKEJ6MC.html; Victorian EIA Members Bulletin – April, 27/3/02, “EPA grants works approval for Coode Island development”, http://www.eia.asn.au/EIA%20VIC%20Member%20April%202002.pdf).
At the same time as Marstel lodged its application for approval with the OIC, Marstel Terminals Pty Limited lodged an application with the Commerce Commission (“Commerce Commission receives clearance application from Marstel Terminals – Media Release 2002/56”, http://www.comcom.govt.nz/publications/display_mr.cfm?mr_id=980) to acquire 100% of the shares of Bulk Storage Terminals Limited (BST), a subsidiary of Burns, Philp and Company Limited of Australia. One report referred to this as a “merger”. BST also “specialises in port-side bulk storage and handling of tallow and vegetable oils (both food grade and non food grade). It also provides storage of some hazardous chemicals. Both businesses have facilities in Auckland and Wellington that are able to store certain chemicals, such as caustic soda. BST also has facilities in other parts of New Zealand” – and Australia. The application was never decided: Marstel withdrew its application on 8/8/02. In its media release, the Commerce Commission hinted that the application would not be straightforward: in 1996 it has refused to allow another liquid bulk storage services provider, Gardner Smith NZ Ltd, to acquire BST, because it would result in Gardner Smith acquiring a dominant position in the Auckland region.
Despite the OIC’s approval of this application, it appears that it did not go ahead. Marstel Terminals’ Annual Report at 20/8/02, lodged with the New Zealand Companies Office, shows it still wholly owned by the Catley family. CDL Land buys Browns Bay, Auckland, land for subdivisionIn a decision originally almost entirely suppressed, and released only after appeal in October 2002, CDL Land New Zealand Ltd, owned 22.1% by the Hong Leong Group of Singapore, 20.1% by other shareholders in Singapore, and 57.7837% in Aotearoa, has approval to acquire 4.1 hectares at 47 Oteha Valley Road, Browns Bay, Auckland for $1,750,000 from FJ, J Whooley and MM Graham of Aotearoa. It adjoins 13.9 hectares in three blocks previously purchased by CDL Land. It will be subdivided into “more than 32 residential sections”.
The last purchase by CDL Land in Browns Bay was in August 2001 when it gained approval to acquire 4.1 hectares at Oteha Valley Road. It was to be subdivided into “more than 40 residential sections”. In June 2000 the OIC granted consent for CDL Land to purchase 5.7 hectares of adjoining land in Browns Bay, and a further 4.1 hectares, also in Browns Bay. Both were in East Coast Bays Road, and were to be subdivided into “more than 118” sections.
CDL Land is owned by CDL Investments New Zealand Ltd, itself a 60.12% subsidiary of CDL Hotels New Zealand Ltd (Datex – July 2002), but with additional overseas shareholders it is in total 71.48% overseas owned. Likewise CDL Hotels New Zealand is 74.45% overseas owned (including 70.22% by CDL Hotels Holdings NZ Ltd), a subsidiary of Millennium and Copthorne Hotels Plc, itself 52.5% owned by CDL Hotels International (according to Datex), which is controlled by the Hong Leong Group of Singapore. Neil Construction of Malaysia buys Henderson land for subdivisionNeil Construction Limited, owned by the Tiong Family of Malaysia, has approval to acquire 11 hectares at Metcalfe Road, Henderson, Auckland for $4,919,205 from Babich Wines Limited of Aotearoa. Neil Construction will
add this land to the company’s portfolio of residential subdivision land in the Auckland region. It states purchase of the land is necessary to replace and expand existing land stocks which are progressively being developed and sold. The subdivision development proposed for the land will provide further sections which will assist in meeting the ever increasing demand for residential lots in the greater Auckland region. The property is very suitable for residential development and is in an area where there has been substantial residential growth in recent years.
The company is active in residential subdivision in Auckland. Its last such purchases were in April and August 2000 (see our commentaries for those month). Dairy farm bought for new Favona Prospect at Martha Mine, WaihiWaihi Gold Company Nominees Ltd, owned 96.4228% by the Newmont Mining Corporation of the U.S.A., and 1.7886% each by minority shareholders in Australia and Aotearoa, has approval to acquire 43 hectares at Mataura Road, Waihi, Coromandel for $1,687,500 from PJ and VJ Bratton of Aotearoa.
The Applicant’s current open cast mine operation, the Martha Mine, is expected to close in approximately 2007. The Applicant proposes to acquire the subject property in connection with the Favona Underground Project for which they have completed a feasibility study. The project involves a significant new investment for the purposes of an underground gold mining operation. There will likely be few surface effects apart from the air vent shaft, the access portal and the infrastructure required to service the underground workings and transport the ore to the existing processing plants. The Applicant is proposing to enter into a lease with the vendors to enable the dairy farming operation to continue on a reduced scale.
The project requires a mining permit under the Crown Minerals Act 1991, resource consents under the Resource Management Act 1991 and a variation to the existing mining licence under the Mining Act 1971. The Applicant has advised that if the necessary consents are not forthcoming then they will sell the property.
Waihi Gold has regularly acquired small blocks of land for its mining operations, the last being in March 2001. However this is different in that it is for the new Favona prospect, and the ownership of the company has changed.
According to the OIC, in March 2001, Waihi Gold was owned 67.06% by Normandy Mining Ltd, listed in Australia, and 32.94% by AUAG Resources Limited. AUAG (which is a subsidiary of Otter Gold NL) was owned 54% in Aotearoa, 41% in Australia, 4% in the U.K., 0.5% in France, and 0.4% in the U.S.A.
In November 2001, Normandy, the largest goldminer in Australia, made a takeover bid for Otter. It succeeded in acquiring 89%, according to announcements to the Stock Exchange in April 2002. In the meantime, Normandy itself was the subject of a bidding war between AngloGold and Newmont Mining. Newmont won, making it (with another recent acquisition) the largest gold mining company in the world. It is therefore not clear why the OIC shows Waihi as being 96% owned by Newmont.
The future of the Martha Hill mine is under a cloud, being regarded as one of its “rats and mice” by Newmont. In addition, the Waihi township has been hit by subsidences from old mine shafts. Sixty-four properties including 21 houses and a number of businesses will have to be vacated, the Hauraki District Council has said. A further 19 may have to be vacated if further investigations show they are unsafe. Another 91 are in a low risk zone. Waihi Gold owns 35 of the properties. In December 2001, a family were lucky to escape injury when the ground collapsed under their home. Three children had to be rescued by firefighters. An American geologist, Dr Chris Buckley, who did a study for Waihi Gold in 1999, in August 2002 broke a confidentiality agreement to reveal that he warned the company that part of the town might collapse. Otter itself is in a shaky financial position, its liabilities exceeding its assets.
(References: Press, 19/11/01, “Merged company a gold giant”, p.21; 4/2/02, “New owner likely to sell Otter mines”, p.13; 27/8/02, “Doubts exist over Otter continuing”, p.C3; The Independent, 28/8/02, “Waihi holes threaten more properties”, p.6; New Zealand Herald, 31/8/02, “Waihi geologist prepared to pay penalty for speaking out”.) Juken Nissho buys lifestyle property for its shareholders and clientsJuken Nissho Limited, owned 85% by Juken Sangyo Company Limited and 15% by Nissho Iwai Corporation, both of Japan, has approval to acquire 8.5 hectares at 577 Back Ormond Road, Gisborne for $1,800,000 from Acton Nominees Limited of Aotearoa. Juken Nissho is buying the property to provide short-term accommodation for overseas visitors to its operations in the East Coast region. The company “has become an established forestry operator in the region since acquiring the Crown Licences for the Wharerata and Patunamu forests in 1990, and establishing a processing mill”. It has “invested over $200 million in over 55,000 hectares of forest, and another $200 million establishing processing mills in Kaitaia, Gisborne and Masterton”.
“The accommodation facility will allow the Applicant to maintain relationships with its shareholder clients and provide for marketing opportunities.” Land for forestry· Two groups of investors from Taiwan have approval to acquire land at State Highway 22, Te Akau Road, near Ngaruawahia, Waikato from the New Zealand Forestry Group Limited, which is owned 76% by Wesley Garratt of Aotearoa and 24% by J Hong of Taiwan. They are both members of the Brooklands Forest Group, which “has entered into an arrangement with New Zealand Forestry Group, to develop approximately 1200 hectares of land at Ngaruawahia”. They are: · Ming-Chan Lin, 18 hectares for $115,200; and · Yang Huang Kuo Family Trust, 12.1 hectares for $77,440. These sales are like many in this and other regions organised by New Zealand Forestry Group, the last such sales being in April 2002, also in Ngaruawahia, with investors in the Brooklands Forest Group. The investors provide the money, while New Zealand Forestry Group manages the development of the forestry operation. Land for wine· The Johner Family Partnership, owned by KH Johner (55%), P Johner (25%), I Johner (10%), and B Johner (10%), all of Germany, has approval to acquire 17.05 hectares at Dakins Road, East Taratahi, Masterton, Wairarapa for $556,762 from BJ Booth Family Trust of Aotearoa. In November 1998 Karl Heinz Johner in partnership with Kai Schubert was given approval by the OIC to acquire 41 hectares in Dakins Road for $780,250, for a vineyard development (see our commentary of that month). “This partnership was dissolved in October 2000 and since then Mr Johner has been seeking opportunities to undertake other investments in the viticultural industry.” According to the OIC: “The Applicant who is an experienced viticulturist with a reputation for producing award winning Pinot Noirs in Germany proposes to acquire the subject property which is part of a subdivision being undertaken by the vendor. The property is currently leased for grazing purposes and it is proposed to establish a vineyard and winery over the next five-seven years. The day to day establishment and operation shall be controlled by a New Zealand vineyard manager whilst the winemaking will be undertaken by the Applicants. The property will be planted in Pinot Noir vines with the initial production expected in 2004. The vineyard is in effect a joint venture between the Applicant, the vendor and the vineyard manager. The winery will be operated solely by the Applicant and will produce premium Pinot Noirs.” · RG Andrus of the U.S.A. has approval to acquire 5.2 hectares at 86 Gibbston Back Road, Gibbston Valley, Central Otago for $1,275,000 from DJ and CM Murfin of Aotearoa. Andrus, “who is an experienced viticulturist/winemaker” proposes to plant a further one hectare in Pinot Noire on the property, “which is an established vineyard with approximately 3.5 hectares planted in 1996 mainly in Pinot Noir and also in Pinot Gris”. He “intends to monitor the vineyard operations and apply his extensive expertise from his United States operations to improve the match of soils, climates and weather with the clones best suited for this region, and improve wine quality by replanting selected cooler climate cloned rootstock.” He plans to “acquire existing vineyards and bare land suitable for Pinot Noir production in Central Otago” and “to establish a winery to process grapes from his properties and will use his established sales networks in the United States to export up to 8,000 cases of wine annually”. Other rural land sales· SR and SL Le Febvre of the U.S.A. have approval to acquire 5.4 hectares at Radar Road, Hot Water Beach, Coromandel for $440,000 from Coastal Lifestyles Limited of Aotearoa. The Le Fevres, who “are shareholders in a company that markets nutritional products in the United States, and sources products from New Zealand”, have applied for a long-term business visa and “will apply for New Zealand permanent residency under the business entrepreneur category in two years time”. They intend to reside on the “lifestyle property”, which is part of a subdivision, and build a house from which they “will continue to conduct the New Zealand activities of the business”. A condition of the subdivision imposed by the Thames Coromandel District Council is that the land except for 2000 square metres will be subject to a covenant that native vegetation is to be planted and thereafter maintained on the property. · Trustees of the J O Adams and Son Ltd Pension Fund of the U.K. have approval to acquire 159 hectares at 5071 State Highway 1, Hihitahi, Waiouru, Manawatu for $843,750 from the FR and LL Taylor Family Trust of Aotearoa. The property is a deer farm which is approximately 13.5 kilometres from a 123 hectare deer farm at Pukenaua Road, Taihape, which the Pension Fund acquired in April 2001 for $881,047 and which “may struggle to be self sufficient”. The new owners also propose to “graze cattle for pasture management purposes”. It “is located at high altitude and combined with its size makes it marginal as a stand alone unit”. In approving the April 2001 sale, the OIC reported that “the Applicants have been in the farming industry as owners for the past 25 years and this acquisition provides them with an opportunity to diversify their existing farm interests in the United Kingdom, particularly as farming in the United Kingdom is under threat of infectious contagious diseases.” It is involved in importing deer velvet products to the U.K., so these farm purchases are a form of vertical integration.
“The Applicant currently markets products derived from the property through a company, Velvet Energy Limited. The Applicant believes that the ability to source such products from this farm in New Zealand will enable them to control the quality of the product and possibly provide a competitive advantage over similar United Kingdom companies. The Applicant also holds shares in Venmark Limited a New Zealand based company that exports venison.”
According to the April 2001 decision, Venmark was owned by the vendors of the Taihape property, and “is a franchiser involved in the branding of venison products”.
In March 2002, the Pension Fund received approval to acquire 250 hectares at Waingaro, Blackburn Road, Ongaonga, Hawkes Bay for $1,310,625, primarily for finishing lambs on contract to Progressive Meats Limited, a member of the Bernard Matthews “Group”, a United Kingdom meat processing and distribution group. It also intended to introduce Beltex breed sheep and farm Belgian Blue cattle. See our March 2002 commentary for further details. · TN and MF Christie of the U.K. have approval to acquire 14 hectares at Old Coach Road, Upper Moutere, Nelson for $652,500 from DG and ES Cunningham of Aotearoa.. The Christies “are recent immigrants to New Zealand” who “intend to acquire the property to construct a dwelling which will become their permanent home, and establish an Alpaca farming operation, from which they will design and market clothing using Alpaca fibre. The property has not been used as an economic farm unit for a number of years and has only been used for casual grazing. In the long-term the Applicants may establish homestay facilities and operate the property as a tourist attraction.” · MG and SL Varner of the U.S.A., have approval to acquire 13 hectares at Mount Gay Road, Raincliff, South Canterbury for $52,801 from IA Geary, CJ Geary and RH Vincent of Aotearoa. The property adjoins a 195 hectare property already owned by the Varners “to establish a deer and elk farming operation”. In December 1999 the Varners were given approval to acquire the 195 hectare Rockpool farm at Raincliff for $1,293,750. They intended “to continue operation of the property as a red deer farm, producing venison and velvet.” They also proposed “to establish a breeding stock of Elk deer to provide trophy quality animals for the international trophy shooting market and to support trophy hunting on the property. It is also proposed to construct a hunting lodge on the property targeted for the outdoor tourism market and tourists primarily from the U.S.A.” The new property “comprises a steep narrow gully which presently has very limited production value due to its topography. It will provide a useful shooting environment for trophy hunters accommodated at the Applicants’ lodge. It has no road frontage and is not capable of being sold to any person except the Applicants being the adjoining landowners.” · SJ and H Bickell of the U.K. have approval to acquire 21 hectares at 250 Hall Road, Geraldine, South Canterbury for $315,000 from WB and CH Baker of Aotearoa. The Bickells “propose to apply for New Zealand permanent residency under the business investor category and propose to acquire a lifestyle property situated near Geraldine. The Applicants intend to reside on the property which has a substantial dwelling. The property is currently utilised for grazing cattle but is not of sufficient size nor is it an economically viable business. The Applicants propose to purchase and farm deer on the property, which their farm consultant has advised is the most productive use of the property to maximise income and productivity. However the farm consultant has confirmed that the property can never be an economic unit given its size.” · SA and GD Macomber of the U.S.A., has approval to acquire a block of land from Closeburn Station on the Glenorchy-Queenstown Road, Queenstown, Otago. The station is owned by J. F. Investments Ltd, which is 70% owned by David Salman of Indonesia and 30% by David Benjamin Broomfield of Aotearoa. J.F. Investments are subdividing nine hectares of the station as “lifestyle properties” into 27 residential allotments, each of which will have a share of the remaining approximately 1003 hectares which will still be farmed (see our commentary on the July 1998 decisions for details). The land adjoins Lake Wakatipu and conservation land. The Macombers are acquiring 37 hectares comprising a block of 0.66 hectares plus 37 hectares which is a 1/27th interest in the remaining land, for $825,000. They intend to use the land to “build a substantial residence on the property to use as a base for their visits to New Zealand”.
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