Wineries & Bottling Plants
PPE Valuations have completed numerous valuations of wineries and bottling plants. These included some of the largest wineries in South Africa with an 80 000 ton per season capacity to small boutique wineries where grapes are received in baskets and hand sorted before being crushed.
Bottling plants included large scale “bag-in-a-box” plants to smaller specialised bottling plants.
Since wineries comprise a collection of asset types such as land, buildings and movable assets a multiple approach to the valuation is taken. The land is normally valued using the Comparable Sales approach, and the buildings and movable assets using the Depreciated Replacement Cost approach. Buildings sometimes include restaurants, guest houses or other accommodation. These can be valued using the Income approach. The total value is the sum of the individual components.
The Profits approach have been considered as a control method, but since branding plays a big roll in the marketing and income of a winery, the valuer will encounter some difficulty in discounting the “brand value” when calculating the fair maintainable operating profit (FMOP) which would be achieved by a reasonable efficient operator (REO).