Andrew Peller Limited Announces Results for Third Quarter of Fiscal 2009

This news release contains forward-looking information that is based upon
assumptions and is subject to risks and uncertainties as indicated in the
cautionary note contained elsewhere in this news release.


Andrew Peller Limited (TSX:ADW.A)(TSX:ADW.B) (the "Company") announced today its
results for the three and nine months ended December 31, 2008.


Solid Growth Continues

Sales for the three months ended December 31, 2008 increased 10.4% to $72.9
million from $66.1 million in the prior year. For the first nine months of
fiscal 2009 sales rose 9.5% to $201.9 from $184.4 million for the same period
last year. The increases are due primarily to ongoing initiatives to grow sales
of the Company's blended varietal table and ultra-premium wines through all
trade channels, the introduction of new products and the acquisition of World
Vintners Inc. ("WVI") on June 30, 2008 and Small Winemakers Collection Inc.
("SWM") on October 8, 2008.


Gross profit as a percentage of sales declined to 41.3% for the three months
ended December 31, 2008 compared to 43.5% in the same period last year. For the
first nine months of fiscal 2009, gross profit as a percentage of sales was
41.7% compared to 43.1% for the same period last year. The changes were due
primarily to an increase in the cost of domestic grapes and wine purchased on
international markets, the decline in value of the Canadian dollar combined with
higher packaging costs. Selling and administrative expenses as a percentage of
sales on a comparable basis for the nine months ended December 31, 2008 were
flat compared to the same periods last year. The increase in dollar amounts is
primarily due to the acquisitions of WVI and SWM, the launch of new products and
increased efforts to market the Company's premium and ultra-premium wines.


Not including net unrealized loss on derivative financial instruments, unusual
items in each year and the impact of future federal income tax rate reductions,
net earnings for the first nine months of fiscal 2009 increased 5.4% to $10.6
million compared to the same period last year. Included in net earnings (losses)
in the nine and three months ended December 31, 2008 were after-tax non-cash
charges of $7.1 million and $6.2 million related to mark-to-market adjustments
on interest rate swaps and foreign exchange contracts. These derivative
financial instruments are considered to be effective economic hedges and have
enabled management to mitigate the volatility of changing prices on operating
costs and interest expense. The Company has not applied hedge accounting to
these instruments, however management expects to hold these contracts to
maturity and accordingly no gain or loss would ultimately be recognized. For the
period ended December 31, 2007, the Company recorded a one-time reduction in its
income tax provision which related to future federal income tax rate reductions
that took effect and resulted in saving of $0.75 million. For the nine months
ended December 31, 2008, net earnings were $3.1 million or $0.22 per Class A
share compared to $10.6 million or $0.73 per Class A share for the same period
last year and a net loss of $2.0 million or $0.13 per Class A share for the
three months ended December 31, 2008 compared to net earnings of $5.0 million or
$0.35 per Class A share for the three months ended December 31, 2007.


"We were pleased with our growth in the third quarter and first nine months of
fiscal 2009," commented John Peller, President and CEO. "Looking ahead, we are
beginning to experience a moderate softening in demand within certain of our
trade channels, including our estate wineries, restaurant sales and our consumer
made wine business, due primarily to reduced consumer spending resulting from
the slowing of the North American economy. In addition, we expect to see a
slight reduction over the near term in sales of our ultra-premium brands as
consumers' trade down to lower priced wines, resulting in some margin pressure
through the next few quarters."


Financial Position

Working capital was $36.3 million at the end of the third quarter of fiscal 2009
compared to $26.6 million at March 31, 2008. Excluding the after-tax impact of
mark-to-market adjustments on interest rate swaps and foreign exchange
contracts, shareholders' equity at December 31, 2008 amounts to $108.2 million
or $7.27 per common share compared to $102.7 million or $6.89 per common share
at March 31, 2008. While credit markets have tightened in recent months, the
Company has successfully refinanced its long-term debt to April 30, 2015 and is
working on converting its demand operating facility to a one year committed
facility.


Acquisition Completed

On October 8, 2008 the Company completed the acquisition of 100% of the common
shares of SWM, a premium wine importer and marketing agent for fine wines in the
Province of Ontario for consideration of approximately $1.6 million.


Dividend Increase

As previously announced, common share dividends were increased by 10% for
shareholders of record on June 30, 2008. The annual dividend on Class A shares
was increased to $0.33 per share from $0.30 per share. The dividend on Class B
shares was increased to $0.288 per share from $0.261 per share.


"With the moderate softening in demand we expect to experience in the coming
quarters, we are closely monitoring all of our costs and will react should we
see any significant reduction in business levels going forward," Mr. Peller
concluded.


Financial Highlights (unaudited - complete consolidated financial statements to
follow)




----------------------------------------------------------------------------
----------------------------------------------------------------------------
Period Ended December 31,                   Three Months        Nine Months
----------------------------------------------------------------------------
(in $000 except per share amounts)        2008      2007      2008     2007
----------------------------------------------------------------------------

Sales                                 $ 72,892  $ 66,052  $201,866 $184,428
EBITA                                   10,436     9,823    25,914   25,019
Earnings before unrealized
 derivative losses, and unusual
 items                                   6,559     6,457    15,194   14,971
Net unrealized derivative losses,
 and unusual items                      (9,412)     (221)  (10,704)    (301)
Net and comprehensive earnings          (1,973)    5,013     3,124   10,579
Net earnings (loss) per share
(Basic per Class A share)              ($ 0.13)   $ 0.35    $ 0.22   $ 0.73
Cash from operations                    (1,373)   (6,188)
(after changes in non-cash working
 capital items)                                              1,322    5,602
Working capital                                             36,301   24,439
Shareholders' equity per share                               $6.79   $ 6.91
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Andrew Peller Limited is a leading producer and marketer of quality wines in
Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company
markets wines produced from grapes grown in Ontario's Niagara Peninsula, British
Columbia's Okanagan and Similkameen Valleys and vineyards around the world. The
Company's award-winning premium and ultra-premium brands include Peller Estates,
Trius, Hillebrand, Thirty Bench, Croc Crossing, XOXO, Sandhill, Copper Moon,
Calona Vineyards Artist Series and Red Rooster VQA wines. Complementing these
premium brands are a number of popular priced products including Hochtaler,
Domaine D'Or, Schloss Laderheim, Royal and Sommet. With the acquisition of
Cascadia Brands Inc., the Company also markets craft beer under the Granville
Island brand. With a focus on serving the needs of all wine consumers, the
Company produces and markets consumer-made wine kit products through Winexpert
and Vineco International Products. In addition, the Company owns and operates
Vineyards Estate Wines, Aisle 43 and WineCountry Vintners, independent wine
retailers in Ontario with more than 100 well-positioned retail locations. Andrew
Peller Limited common shares trade on the Toronto Stock Exchange (symbols ADW.A
and ADW.B).


The Company utilizes EBITA (defined as earnings before interest, incomes taxes,
depreciation, amortization, unrealized derivative losses, and unusual items).
EBITA is not a recognized measure under GAAP. Management believes that EBITA is
a useful supplemental measure to net earnings, as it provides readers with an
indication of cash available for investment prior to debt service, capital
expenditures and income taxes. Readers are cautioned that EBITA should not be
construed as an alternative to net earnings determined in accordance with GAAP
as an indicator of the Company's performance or to cash flows from operating,
investing and financing activities as a measure of liquidity and cash flows. In
addition, the Company's method of calculating EBITA may differ from the methods
used by other companies and, accordingly, may not be comparable to measures used
by other companies.


FORWARD-LOOKING INFORMATION

Certain statements in this news release may contain "forward-looking statements"
within the meaning of applicable securities laws, including the "safe harbour
provision" of the Securities Act (Ontario) with respect to Andrew Peller Limited
(the "Company") and its subsidiaries. Such statements include, but are not
limited to, statements about the growth of the business in light of the
Company's recent acquisitions; its launch of new premium wines; sales trends in
foreign markets; its supply of domestically grown grapes; and current economic
conditions. These statements are subject to certain risks, assumptions and
uncertainties that could cause actual results to differ materially from those
included in the forward-looking statements. The words "believe", "plan",
"intend", "estimate", "expect" or "anticipate" and similar expressions, as well
as future or conditional verbs such as "will", "should", "would" and "could"
often identify forward-looking statements. We have based these forward-looking
statements on our current views with respect to future events and financial
performance. With respect to forward-looking statements contained in this news
release, the Company has made assumptions and applied certain factors regarding,
among other things: future grape, glass bottle and wine prices; its ability to
obtain grapes, imported wine, glass and its ability to obtain other raw
materials; fluctuations in the U.S./Canadian dollar exchange rates; its ability
to market products successfully to its anticipated customers; the trade balance
within the domestic Canadian wine market; market trends; reliance on key
personnel; protection of its intellectual property rights; the economic
environment; the regulatory requirements regarding producing, marketing,
advertising and labelling its products; the regulation of liquor distribution
and retailing in Ontario; and the impact of increasing competition.


These forward-looking statements are also subject to the risks and uncertainties
discussed in this news release, in the "Risk Factors" section and elsewhere in
the Company's MD&A and other risks detailed from time to time in the publicly
filed disclosure documents of Andrew Peller Limited which are available at
www.sedar.com. Forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and assumptions which could cause
actual results to differ materially from those conclusions, forecasts or
projections anticipated in these forward-looking statements. Because of these
risks, uncertainties and assumptions, you should not place undue reliance on
these forward-looking statements. The Company's forward-looking statements are
made only as of the date of this news release, and except as required by
applicable law, the Company undertakes no obligation to update or revise these
forward-looking statements to reflect new information, future events or
circumstances or otherwise.




ANDREW PELLER LIMITED
CONSOLIDATED BALANCE SHEETS
These financial statements have not been reviewed by our auditors

                                                   December 31     March 31
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                          2008         2008
(expressed in thousands of Canadian dollars)                 $            $
----------------------------------------------------------------------------

Assets
Current Assets

Accounts receivable                                     29,276       23,072
Inventories                                            108,083       93,817
Prepaid expenses and other assets                        5,114        4,242
Income taxes recoverable                                 2,617          823
                                                   -------------------------
                                                       145,090      121,954
Property, plant and equipment                          101,860       94,480
Goodwill (note 3)                                       45,684       36,171
Other assets                                             7,121        7,139
                                                   -------------------------
                                                       299,755      259,744
                                                   -------------------------
                                                   -------------------------

Liabilities
Current Liabilities

Bank indebtedness                                       58,836       57,722
Accounts payable and accrued liabilities                37,860       29,272
Dividends payable                                        1,197        1,088
Current derivative financial instruments (note 4)        4,738          432
Current portion of long - term debt (note 4)             6,158        6,831
                                                   -------------------------
                                                       108,789       95,345

Long-term debt (note 4)                                 72,911       46,412
Long-term derivative financial instruments (note 4)      5,857          534
Employee future benefits                                 2,950        3,167
Future income taxes                                      8,102       11,606
                                                   -------------------------
                                                       198,609      157,064
                                                   -------------------------

Shareholders' Equity

Capital Stock                                            7,375        7,375
Retained Earnings                                       93,771       95,305
                                                   -------------------------
                                                       101,146      102,680
                                                   -------------------------

                                                       299,755      259,744
                                                   -------------------------
                                                   -------------------------

The accompanying notes are an integral part of these interim consolidated
financial statements



ANDREW PELLER LIMITED
Consolidated Statements of (Loss) Earnings, Comprehensive (Loss) Earnings
 and Retained Earnings
These financial statements have not been reviewed by our auditors
(expressed in thousands of Canadian dollars)    

                                          For the Three        For the Nine
                                           Months Ended        Months Ended
                                            December 31         December 31
                                          2008     2007      2008      2007
                                             $        $         $         $
-------------------------------------------------------   ------------------

Sales                                   72,892   66,052   201,866   184,428
Cost of goods sold, excluding
 amortization                           42,809   37,312   117,745   105,026
                                       -------  -------   -------   --------
Gross profit                            30,083   28,740    84,121    79,402
Selling and administration              19,647   18,917    58,207    54,383
                                       -------  -------   -------   --------

Earnings before interest and
 amortization                           10,436    9,823    25,914    25,019
Interest                                 1,828    1,519     4,735     4,383
Amortization of plant, equipment
 and intangibles                         2,049    1,847     5,985     5,665
                                       -------  -------   -------   --------
Earnings before other items              6,559    6,457    15,194    14,971
Net unrealized loss on derivative
 financial instruments                  (8,969)    (118)  (10,147)      (74)
Unusual items                             (443)    (103)     (557)     (227)
                                       -------  -------   -------   --------
Earnings (loss) before income taxes     (2,853)   6,236     4,490    14,670
                                       -------  -------   -------   --------

Provision for income taxes
Current                                  1,810    1,945     4,385     4,670
Future                                  (2,690)    (722)   (3,019)     (579)
                                       -------  -------   -------   --------
                                          (880)   1,223     1,366     4,091
                                       -------  -------   -------   --------

Net and comprehensive (loss)
 earnings for the period                (1,973)   5,013     3,124    10,579

Retained earnings - Beginning
 of period                              96,941   91,666    95,305    88,147
Impact of adopting accounting
 pronouncements on April 1, 2007             -        -         -       128
Impact of adopting accounting
 pronouncement on April 1, 2008
 (note 1)                                    -        -    (1,067)        -
                                       -------  -------   -------   --------
Retained earnings - Beginning of
 period as restated                     96,941   91,666    94,238    88,275
                                       -------  -------   -------   --------

Dividends:
Class A and Class B                     (1,197)  (1,088)   (3,591)   (3,263)
                                       -------  -------   -------   --------
Retained earnings - End of period       93,771   95,591    93,771    95,591
                                       -------  -------   -------   --------
                                       -------  -------   -------   --------

Net (loss) earnings per share
Basic and diluted
 Class A shares                          (0.13)    0.35      0.22      0.73
                                       -------  -------   -------   --------
                                       -------  -------   -------   --------
 Class B shares                          (0.12)    0.30      0.19      0.63
                                       -------  -------   -------   --------
                                       -------  -------   -------   --------

The accompanying notes are an integral part of these interim consolidated
financial statements


ANDREW PELLER LIMITED
Consolidated Statements of Cash Flows
These financial statements have not been reviewed by our auditors
(expressed in thousands of Canadian dollars)

                                          For the Three        For the Nine
                                           Months Ended        Months Ended
                                            December 31         December 31
                                          2008     2007      2008      2007
                                             $        $         $         $
-------------------------------------------------------   ------------------

Cash provided by (used in)

Operating activities
Net (loss) earnings for the period      (1,973)   5,013     3,124    10,579

Items not affecting cash:
 Amortization of plant, equipment
  and intangibles                        2,049    1,847     5,985     5,665
 Employee future benefits                  (14)    (627)     (217)     (814)
 Net unrealized loss on derivative
  financial instruments                  8,969      118    10,147        74
 Future income taxes                    (2,690)    (722)   (3,019)     (579)
 Write-off of deferred financing
  costs                                    366        -       366         -
 Amortization of deferred financing
  costs                                     51       39       144       112
                                       -------  -------   -------   --------
                                         6,758    5,668    16,530    15,037
Changes in non-cash working capital
 items related to operations (note 5)   (8,131) (11,856)  (15,208)   (9,435)
                                       -------  -------   -------   --------
                                        (1,373)  (6,188)    1,322     5,602
                                       -------  -------   -------   --------


Investing activities
Acquisition of businesses (note 3)      (1,610)       -   (16,582)        -
Purchase of property and equipment      (2,258)  (2,640)   (7,689)  (11,732)
                                       -------  -------   -------   --------
                                        (3,868)  (2,640)  (24,271)  (11,732)
                                       -------  -------   -------   --------


Financing activities
Increase in deferred financing
 costs                                     (17)       -      (304)        -
Increase in bank indebtedness            7,789   11,392     1,113    10,180
Increase in long-term debt (note 4)          -        -    29,036     3,470
Repayment of long-term debt             (1,334)  (1,477)   (3,414)   (4,428)
Dividends paid                          (1,197)  (1,087)   (3,482)   (3,092)
                                       -------  -------   -------   --------
                                         5,241    8,828    22,949     6,130
                                       -------  -------   -------   --------

Cash at beginning and end of period          -        -         -         -
                                       -------  -------   -------   --------
                                       -------  -------   -------   --------

Supplemental disclosure of cash flow
 information
Cash paid during the period for
 Interest                                2,190    1,380     4,846     4,067
 Income taxes                            2,199      960     4,558     4,254

The accompanying notes are an integral part of these interim consolidated
financial statements



Notes to the Interim Consolidated Financial Statements

December 31, 2008 and 2007

(in thousands of dollars, except per share amounts)

UNAUDITED

1. Summary of Significant Accounting Policies

The interim consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in Canada. The note disclosure for
these interim consolidated financial statements only presents material changes
to the disclosure found in the Company's audited consolidated financial
statements for the years ended March 31, 2008 and 2007. These interim
consolidated financial statements should be read in conjunction with those
consolidated financial statements and follow the same accounting policies as the
audited consolidated financial statements except as disclosed below. In the
opinion of management, the accompanying unaudited interim consolidated financial
statements contain all adjustments necessary to present fairly, in all material
respects the financial position of the Company as at December 31, 2008 and for
the three and nine-month period then ended.


Recently adopted accounting pronouncements

On April 1, 2008 the Company adopted the Canadian Institute of Chartered
Accountants (CICA) handbook Sections 3031 "Inventories," Section 3862 "Financial
Instruments - Disclosures," Section 3863 "Financial Instruments - Presentation"
and Section 1535 "Capital Disclosures."


a) Inventories

On April 1, 2008 the Company adopted the CICA Handbook Section 3031
"Inventories". This pronouncement provides guidance on the determination of cost
and its subsequent recognition as an expense, including any write-down to net
realizable value. It also provides guidance on the cost formulas that are used
to assign costs to inventories and is effective for the Company's fiscal years
beginning on April 1, 2008. As required, this standard has been adopted
prospectively and comparative amounts have not been restated. The change
predominately relates to changes in the application of overhead cost allocations
to bulk and finished goods inventory. As a result, on adoption of this standard,
the Company recorded an adjustment on April 1, 2008 to reduce inventories by
$1,552, reduce future income taxes by $485, and reduce opening retained earnings
by $1,067.


b) Financial Instruments Presentation and Disclosures, and Capital Disclosures

On April 1, 2008 the Company adopted CICA handbook Section 3862 "Financial
Instruments - Disclosures," section 3863 "Financial Instruments - Presentation"
and section 1535 "Capital Disclosures." These sections require additional
disclosures surrounding the Company's financial instruments and capital. The
following disclosures are required under the new pronouncement:


Interest rate risk

The Company's interest rate risk arises mainly from the interest rate impact on
our cash, floating rate debt and interest rate swap. Our interest rate
management policy is to borrow at fixed rates to match the duration of long
lived assets. Floating rate funding is used for short term borrowing.


The Company has fixed interest on long-term debt at 5.64% until April 30, 2015
by entering into an interest rate swap. The Company's short-term borrowings are
funded using a floating interest rate and as such are sensitive to interest rate
movements. As at December 31, 2008, with other variables unchanged, a 1% change
in interest rates would impact the Company's net earnings by approximately $350,
exclusive of the mark to market adjustments on the interest rate swap.


Credit Risk

The Company's exposure to credit risk is very limited. Credit risk for trade
receivables is monitored through established credit monitoring activities. Over
50% of the Company's accounts receivable balance relates to amounts owing from
Canadian provincial liquor boards. Excluding accounts receivable from Canadian
provincial liquor board amounts, the Company does not have a significant
concentration of credit risk with any single counterparty or group of
counterparties. The maximum exposure to credit risk is equal to the carrying
value of the financial assets.


Amounts owing from Canadian provincial liquor boards represent $14,740 of the
$29,276 in total accounts receivables all of which has been deemed to be
collectible. Of the remaining non provincial liquor board balances, $2,734 had
aged over sixty days as of December 31, 2008. An allowance for doubtful accounts
of $504 has been provided against these accounts receivable amounts which the
Company has determined to represent a reasonable estimate of amounts that may be
uncollectible.


Liquidity Risk

The Company manages liquidity risk by maintaining adequate cash and cash
equivalent balances and by appropriately utilizing its line of credit. Company
management continuously monitors and reviews both actual and forecasted cash
flows and matches the maturity profile of financial assets and financial
liabilities. Accounts payable are generally due within 30 days and long-term
debt payment requirements are disclosed in note 4.


The following table outlines the Company's contractual obligations, including
long-term debt, operating leases, and commitments on short-term forward foreign
exchange contracts used to hedge the currency risk on U.S. dollar purchases as
at December 31, 2008.




                                           Less                     Greater
                                         Than 1    2 - 3    4 - 5    Than 5
                                 Total     Year    Years    Years     Years

 Long-term debt                 79,345    6,158   11,492   10,667    51,028

 Operating leases               19,061    4,439    5,728    1,749     7,145

 Pension obligations             5,707      847    2,541    1,694       625

 Long-term grape contracts     357,461   25,845   51,637   51,179   228,800
                              ----------------------------------------------

Total contractual obligations  461,574   37,289   71,398   65,289   287,598
                              ----------------------------------------------
                              ----------------------------------------------



Foreign exchange risk

The Company's foreign exchange risk arises on the purchase of bulk wine and
concentrate which are made in U.S. dollars and Euros. The Company's strategy is
to hedge approximately 50% - 80% of its foreign exchange requirements prior to
the beginning of each fiscal year. The Company has entered into a series of
foreign exchange contracts as a hedge against movements in U.S. dollar and Euro
exchange rates. These contracts are reviewed regularly. A one percent change in
the value of the U.S. dollar and Euro would impact the Company's net earnings by
approximately $100 and $30 respectively.


Capital Disclosures

The Company's objective when managing capital is to safeguard the Company's
ability as a going concern, to provide an adequate return to shareholders and to
meet external capital requirements on our debt and credit facilities. Unfunded
capital expenditures are limited to $10,000 on an annual basis and this is
reviewed quarterly.


As part of the existing debt agreement, three key financial covenants are
monitored on an ongoing basis by management to ensure compliance with the
agreement as follows:


- Funded debt to a rolling twelve month EBITDA

- Working capital ratio

- Fixed charge coverage ratio

In order to facilitate management of its capital requirements, the Company
prepares annual budgets that are updated as necessary depending on various
factors including general industry conditions. The annual budget is approved by
the Board of Directors. As at December 31, 2008, the Company has remained in
compliance with all external lending agreement covenants.


Recently issued accounting pronouncements

International Financial Reporting Standards

In February 2008, the Canadian Accounting Standards Board confirmed that the use
of International Financial Reporting Standards ("IFRS") will be required for
Canadian publicly accountable companies for fiscal years beginning on or after
January 1, 2011. The Company is currently evaluating the impact of adopting
IFRS.


Goodwill and intangible assets

In February 2008, The Canadian Institute of Chartered Accountants issued Section
3064, "Goodwill and Intangible Assets" which replaces Section 3062, "Goodwill
and Other Intangible Assets". The new standard provides guidance on the
recognition, measurement and disclosure of goodwill and intangible assets and is
effective for annual periods beginning on or after October 1, 2008. The Company
is currently evaluating the impact of adopting this standard.


2. Seasonality

The third quarter of each year is historically the strongest in terms of sales,
gross profit and net earnings due to increased consumer purchasing of the
Company's products during the holiday season.


3. Acquisitions

On June 13, 2008 the Company acquired 50% of the shares of Rocky Ridge Vineyards
Inc. ("Rocky Ridge") of Oliver, British Columbia for consideration of $4,016,
including acquisition costs. The Company previously owned 50% of the shares of
Rocky Ridge and as a result of this transaction Rocky Ridge becomes a
wholly-owned subsidiary of the Company. The allocation of purchase price is
preliminary and is based on management's estimates of the fair value of the
assets acquired and liabilities assumed. Management is currently obtaining fair
market values for the net assets acquired, including the estimated remaining
useful lives. Details of net assets acquired are as follows: vineyards - $4,400;
goodwill - $219; bank indebtedness - ($603). This transaction was accounted for
using the purchase method. The results of operations have been fully
consolidated with those of the Company's effective June 14, 2008.


On June 30, 2008 the Company's wholly-owned subsidiary, 1773008 Ontario Inc.
acquired 100% of the common shares of World Vintners Inc. for consideration of
$10,956, including acquisition costs. The allocation of purchase price is
preliminary and is based on management's estimates of the fair value of the
assets acquired and liabilities assumed. Management is currently obtaining fair
market values for the net assets and intangible assets acquired, including the
estimated remaining useful lives. Details of net assets acquired based on
preliminary allocations are as follows: accounts receivable - $1,170;
inventories - $1,269; income taxes recoverable - $1,625; property, plant and
equipment - $844; intangible assets - $380; goodwill - $8,125; other assets -
$72; accounts payable and accrued liabilities - ($2,529). This transaction was
accounted for using the purchase method. The results of operations have been
included in the consolidated financial statements of the Company, effective July
1, 2008.


On October 8, 2008 the Company acquired 100% of the outstanding shares of The
Small Winemakers Collection Inc. of Toronto, Ontario for consideration of $1,610
including acquisition costs. The allocation of purchase price is preliminary and
is based on management's estimates of the fair value of the assets acquired and
liabilities assumed. Management is currently obtaining fair market values for
the net assets and intangible assets acquired, including the estimated remaining
useful lives. Details of net assets acquired based on preliminary allocations
are as follows: accounts receivables - $632; property, plant and equipment -
$34; other assets - $36; goodwill - $1,169; accounts payable and accrued
liabilities - $261. This transaction was accounted for using the purchase
method. The results of operations have been included in the consolidated
financial statements of the Company, effective October 9, 2008.


The value assigned to goodwill in all three acquisitions is not deductible for
tax purposes.


4. Long-term debt and derivative financial instruments

On May 15, 2008, the Company's four existing term loans were replaced with one
seven year variable rate term facility in the amount of $80,000. The new term
loan is repayable in monthly principal payments of $444 plus interest and
matures on April 30, 2015. Subsequent to the repayment of the old term loans,
the Company unwound the three interest rate swaps related to the term loans. The
Company entered into a new interest rate swap which effectively fixes the
interest rate on the $80,000 term loan at 5.64% for the term of the debt
effective July 2, 2008. However, the Company does not apply hedge accounting to
these interest rate swaps. Accordingly mark-to- market losses of $8,929 and
$9,629, for the three and nine month periods were recorded through earnings
respectively.


As part of the acquisition of Rocky Ridge, on June 13, 2008 the Company issued a
promissory note to the seller of Rocky Ridge in the amount of $1,650. The note
incurs interest at 6% compounded annually and is to be paid in two equal annual
installments of principal and interest on June 13, 2009 and June 13, 2010.


5. Changes in non-cash working capital items

The change in non-cash working capital items is comprised of the change in the
following items:




                                         For the Three         For the Nine
                                          Months Ended         Months Ended
                                           December 31,         December 31,
                                         2008     2007        2008     2007
                                         ----     ----        ----     ----
                                            $        $           $        $
Accounts receivable                     1,077     (339)     (4,402)  (4,422)
Inventories                           (13,368)  (8,824)    (14,549)  (8,165)
Prepaid expenses and other assets         498      201      (1,283)     (70)
Accounts payable and accrued
 liabilities                            4,052   (2,062)      5,200    2,806
Income taxes recoverable                 (390)   1,712        (174)     416
                                     --------- --------    --------  -------

                                       (8,131) (11,856)    (15,208)  (9,435)
                                     --------- --------    --------  -------
                                     --------- --------    --------  -------



6. Comparative Figures


Certain of the prior year balances have been restated to conform with the
current year's presentation.