Shareholders at Waipara Hills Wine Estate Limited's annual meeting voted unanimously to support a recommendation from Directors to merge with Blenheim-based company New Zealand Vineyard Estates Limited a wholly-owned subsidiary of New Zealand Wineries Limited.

A public company Waipara Hills was founded in September 2001 and has a strong record for producing gold-medal-winning wines with all fruit sourced from contract growers in Marlborough, Waipara, and Canterbury.

New Zealand Vineyard Estates has established large-scale vineyards in Marlborough, Waipara and Central Otago totaling 325 hectares. Some 25% of this fruit is on long-term contracts to other growers but the balance of the fruit will now be available to Waipara Hills.

This allows input costs to be strictly controlled relative to the previous dependency on higher priced contract grape supplies, and equally important it offers the opportunity for significant increases in production capacity and greater attraction to larger scale distributors in export markets.

Chair Syd Bradley said, "We are delighted with the shareholder response today. As a start up company in the wine industry we have struggled with the high cost of fruit, the downward pressure on wine prices and the strength of the NZ dollar at a time when we are working hard to establish export markets. We have had steady growth in both domestic and export sales along with the rapid and somewhat spectacular establishment of the brand in a short time, but we have not traded profitably.

"We welcome this opportunity to move our company forward with NZVE. The security of owning four large, well-managed and efficient vineyards, will give us a much bigger base to build the brand on with greater economies of scale which as a package will ensure better margins for our product and the opportunity to build share value."

Ron Stewart, Director of NZVE commented, "We have been involved in the production side of the wine industry through our bottling, winery processing and grape growing activities for about eight years now and we felt the time was now right to take that last step into the market place through our vineyard company. Waipara Hills have been making excellent wines and they have made steady progress particularly in the export market and we believe that we can offer real added value benefits with the introduction of our vineyard operation into the company.

"We believe we bring to the merger those elements necessary to correct the original business model, both in terms of scale and supply issues, and set this expanded company on the path to commercial success for the benefit of all shareholders."

Both company representatives refused to rule out further expansion by way of mergers or otherwise with the particular aim of securing wider distribution markets. Waipara Hills currently exports to seven countries.

For further comment contact:
Syd Bradley, Chairman, 0274 350 898

Or Lew Stribling, CEO,
Waipara Hills Wine Estate Limited
Mobile: 027 222 8893