Hawkes Bay winegrowers are criticising the recent sale of Sileni Estates, claiming that the change of ownership will leave them out of pocket, and is calling on the Government to change the law to prevent it happening again.

The sale of the Hawkes Bay business of Sileni Estates to financial services company Booster has left growers in Marlborough and Hawkes Bay as unsecured creditors.

"The Sileni sale has finally galvanised my thoughts on a Hawke's Bay industry that appears to be in good health from the outside but has some issues within," said winegrower Chris Howell, who noted his disappointment with how the sale was handled. “In reality, we were told six weeks ago that our supply contract was to be cancelled, with no recourse to compensation. While fruit supplied in the 2018 vintage would be paid for [and has been], there was no room in the new business for some contracts or money left for buying out growers from ongoing contracts, even though money had already been expended in pruning the vineyards for the 2019 vintage. This was a fait accompli, not a discussion."

"In the wine industry, the winery is in control of what happens to the grower supplier, as most wineries are in charge of pricing and contracts (there are some exceptions where it is more equitable). It is high time that businesses and directors were stopped from hiding behind limited liability structures where they can wilfully walk away from contracts with little or no consequences.”

Howell said that the law needs to change so that contractors in any sector that operate as unsecured creditors can register for the Personal Properties Security Register, to prevent small companies suffering when larger companies fail.

Sileni CEO Nigel Avery confirmed that six grape suppliers will no longer be growing for Sileni.

"The new owners only sought to purchase or assume the parts of the existing business that could be operated profitably,” he explained. “The severe headwinds in our Australian market led to overcapacity in our New Zealand production operation which meant that, regrettably, the future supply of six growers was no longer required.”

"The new owner purchased all brands and physical assets of Sileni, as well as undertaking to pay all creditors for amounts owed up to the date the transaction was settled. No grower has been left out of pocket in this respect."