Andrew Peller Limited (TSX: ADW.A)(TSX: ADW.B) (the "Company") announced today continuing strong results for the three and nine months ended December 31, 2010.

THIRD QUARTER HIGHLIGHTS:


- Sales up 4.2% on solid performance through majority of trade channels
- Stronger Canadian dollar and benefits from cost containment initiatives
  results in improved profitability
- Gross profit margin improves to 38.3% of sales from 35.3% last year
- EBITA up 20.5% to $10.3 million
- Cash flow from operating activities increases to $10.8 million for the
  nine month period
- Working capital rises to $36.6 million from $30.0 million at March 31,
  2010

Sales for the third quarter of fiscal 2011 rose 4.2% to $75.0 million from $71.9 million in the prior year period. For the first nine months of fiscal 2011 sales were $208.5 million, up from $203.9 million in fiscal 2010. Ongoing initiatives to grow sales of the Company's blended varietal table and premium wines through provincial liquor boards, the introduction of new products and improved performance at the Company's estate wineries were partially offset by additional taxation levied by the Province of Ontario on sales of cellared in Canada wine sold through the Company's retail stores and lower than anticipated sales of personal winemaking products.

Gross profit as a percentage of sales improved to 38.3% for the three months ended December 31, 2010 from 35.3% in the same period last year. For the first nine months of fiscal 2011 gross profit was 39.1% compared to 36.3% for the same period in the prior fiscal year. The increases in gross profit in fiscal 2011 were due to the lower cost to the Company of purchasing United States dollars and Euros and the Company's successful cost control initiatives which served to reduce operating and packaging expenses. Management remains focused on efforts to enhance production efficiency and productivity to further improve overall profitability.

"The third quarter of our fiscal year is typically our strongest period, and we were pleased to have generated such solid sales growth through this year's holiday season," commented John Peller, President and CEO. "Our premium and ultra-premium wines are achieving strong sales momentum through all trade channels, while recently introduced new products are augmenting our overall revenue increases. Looking ahead, we anticipate continued growth in both revenue and profitability as consumer confidence increases, the markets for Canadian wines remain strong, and through our successful initiatives to contain our costs."

Selling and administrative expenses rose in the third quarter of fiscal 2011, and as a percentage of sales were 24.6% compared to 23.5% in the same quarter last year. For the nine months ended December 31, 2010 selling and administrative expenses were 25.7% as a percentage of sales compared to 24.9% for the same period last year. The increase in expenses is primarily the result of higher sales and marketing investments in the current fiscal year compared with the prior year.

Interest expense through the first nine months of fiscal 2011 declined compared to last year due primarily to the reduction in debt from the proceeds of sale of the Company's beer business, proceeds from the sale of certain non-core vineyards during the first quarter of fiscal 2011 and lower interest rates on short and long-term debt.

The Company incurred non-cash gains for the three months ended December 31, 2010 of $0.3 million compared to $1.1 million in the same period last year. The non-cash gains related to mark-to-market adjustments on an interest rate swap and foreign exchange contracts. For the first nine months of fiscal 2011 the Company incurred a loss of $0.2 million compared to a gain of $2.4 million in the prior year period. Under CICA accounting standards, these financial instruments must be reflected in the Company's financial statements at fair value each reporting period. These instruments are considered to be effective economic hedges and have enabled management to mitigate the volatility of changing costs and interest rates during the year.

Other expenses incurred in the first nine months of fiscal 2011 relate to one-time costs on a net write-down of a BC vineyard where vines were damaged by an early and severe frost in the fall of 2009, and in maintaining the Company's Port Moody facility which was closed effective December 31, 2005. These costs were partially offset by other income of $0.3 million related to the gain on the sale of the Okanagan vineyard in the first quarter of fiscal 2011.

Net and comprehensive earnings from continuing operations, excluding the gains on derivative financial instruments and other expenses for the three and nine months ended December 31, 2010, were $4.7 million and $11.6 million, respectively, compared to $3.7 million and $7.8 million, respectively, for the comparable prior year periods. During the third quarter of fiscal 2010 the Company sold its beer business and accounted for the sold business as a discontinued operation, recording on after-tax gain on the sale of approximately $11.9 million. Net and comprehensive earnings from continuing operations were $4.9 million ($0.33 per Class A Share) and $10.7 million ($0.73 per Class A Share) for the three and nine months ended December 31, 2010, respectively, compared to $3.6 million ($0.25 per Class A Share) and $8.7 million ($0.60 per Class A Share) for the same comparable periods in fiscal 2010.

Strengthened Financial Position

Working capital was $36.6 million as at December 31, 2010 compared to $30.0 million at March 31, 2010 and $31.0 million at December 31, 2009. As at December 31, 2010, total bank indebtedness and long-term debt decreased compared to March 31, 2010 and December 31, 2009 due primarily to increased cash flow from operating activities due to higher net earnings partially offset by higher levels of working capital. On May 25, 2010 the Company sold approximately six acres of vineyard in the Okanagan Valley. The proceeds of approximately $0.8 million were also used to reduce bank indebtedness.

With the decrease in bank debt, the Company's debt to equity ratio decreased to 0.83:1 compared to 0.90:1 at the end of fiscal 2010 and 0.97:1 at the end of the prior year's third quarter. Shareholders' equity at December 31, 2010 rose to $120.7 million or $8.11 per common share compared to $113.7 million or $7.63 per common share at March 31, 2010 and $114.2 million or $7.67 per common share at December 31, 2009. The increase in shareholders' equity is due primarily to higher net earnings from continuing operations for the period.

Prestigious Awards

The Company also announced today that its Andrew Peller Signature Series Cabernet Sauvignon 2007 had been awarded the Warren Winiarski Trophy for Best Red Wine at the 2010 International Wine and Spirits Competition (IWSC) in London, England. The IWSC, now in its 41st year, is the oldest, largest and one of the best-supported international wine tasting competitions in the world. Wines from over 80 countries were blind tasted by experienced judging panels and all underwent rigorous chemical and microbiological analysis.

In addition, the Company announced that Frank Dodd, Chef at the Company's Hillebrand Estate Winery Restaurant, had been awarded the honour of Ontario's Gold Medal Plate Champion for 2010. He competed against the best chefs from restaurants across the province. Chef Dodd will now represent Hillebrand at the Canadian Culinary Championships to be held in Kelowna B.C. in February 2011.

"We are very proud to have been awarded these prestigious honours, a true reflection of our passion to provide our estate winery guests and wine connoisseurs with the highest standards of quality and excellence," Mr. Peller concluded.


Financial Highlights (Unaudited)
(Complete consolidated financial statements to follow)
----------------------------------------------------------------------------
(in $000 except as otherwise stated)        Three Months        Nine Months
----------------------------------------------------------------------------
For the Period Ended December 31,         2010      2009      2010     2009
----------------------------------------------------------------------------
Sales                                   74,983    71,945   208,480  203,856
Gross profit                            28,690    25,430    81,497   74,043
                                     ---------------------------------------
Gross profit (% of sales)                38.3%     35.3%     39.1%    36.3%
                                     ---------------------------------------
Selling general and administrative
 expenses                               18,412    16,903    53,507   50,818
Earnings before interest, taxes,
 amortization, unrealized loss (gain)
 and other expenses                     10,278     8,527    27,990   23,225
Unrealized loss (gain) on derivative
 financial instruments                    (342)   (1,103)      174   (2,443)
Other expenses                              38     1,247     1,076    1,247
Net and comprehensive earnings from
 continuing operations                   4,908     3,588    10,650    8,688
Net and comprehensive earnings from a
 discontinued operation                      -    11,940         -   12,335
                                     ---------------------------------------
Net and comprehensive earnings           4,908    15,528    10,650   21,023
                                     ---------------------------------------
Earnings per share from continuing
 operations - Class A                    $0.33     $0.25     $0.73    $0.60
Earnings per share - basic and
 diluted - Class A                       $0.33     $1.07     $0.73    $1.45
Dividend per share - Class A (annual)  $ 0.330   $ 0.330   $ 0.330  $ 0.330
Dividend per share - Class B (annual)  $ 0.288   $ 0.288   $ 0.288  $ 0.288
                                     ---------------------------------------
Cash provided by operations (after
 changes in non-cash working capital
 items)                                 (5,337)   (1,218)   10,838    7,204
                                     ---------------------------------------
Working capital                                             36,560   31,033
Shareholders' equity per share                               $8.11    $7.67
----------------------------------------------------------------------------

Andrew Peller Limited ('APL' or the 'Company') 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 from vineyards around the world. The Company's award-winning premium and ultra-premium VQA brands include Peller Estates, Trius, Hillebrand, Thirty Bench, Sandhill, Calona Vineyards Artist Series and Red Rooster. Complementing these premium brands are a number of popularly priced varietal wine brands including Peller Estates French Cross in the East, Peller Estates Proprietors Reserve in the West, Copper Moon, XOXO and Croc Crossing. Hochtaler, Domaine D'Or, Schloss Laderheim, Royal and Sommet are our key value priced wine blends. The Company imports wines from major wine regions around the world to blend with domestic wine to craft these popularly priced and value priced wine brands. With a focus on serving the needs of all wine consumers, the Company produces and markets premium personal winemaking products through its wholly-owned subsidiary, Global Vintners Inc., the recognized world leader in personal winemaking products. Global Vintners distributes products through over 250 Winexpert and Wine Kitz authorized retailers and franchisees and more than 600 independent retailers across Canada, United States, United Kingdom, New Zealand and Australia. Global Vintners award-winning premium and ultra-premium winemaking brands include Selection, Vintners Reserve, Island Mist, Kenridge, Cheeky Monkey, Ultimate Estate Reserve, Traditional Vintage and Artful Winemaker. The Company owns and operates more than 100 well-positioned independent retail locations in Ontario under the Vineyards Estate Wines, Aisle 43 and WineCountry Vintners store names. The Company also owns Grady Wine Marketing Inc. based in Vancouver, and The Small Winemaker's Collection Inc. based in Ontario; both of these wine agencies are importers of premium wines from around the world and are marketing agents for these fine wines. The Company's products are sold predominantly in Canada with a focus on export sales for our icewine products.

Net earnings from continuing operations before other expenses is defined as net earnings before the net unrealized gain on financial instruments, other expenses and net earnings from a discontinued operation, all adjusted by income tax rates as calculated below:


(in $000)                                  Three Months         Nine Months
----------------------------------------------------------------------------
Period ended December 31,                2010      2009      2010      2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net and comprehensive earnings
 (loss)                                 4,908    15,528    10,650    21,023
----------------------------------------------------------------------------
Unrealized (gain) loss on financial
 instruments                             (342)   (1,103)      174    (2,443)
----------------------------------------------------------------------------
Other expenses                             38     1,247     1,076     1,247
----------------------------------------------------------------------------
Income tax effect on the above             79       (37)     (288)      352
----------------------------------------------------------------------------
Net income from a discontinued
 operation                                  -   (11,940)        -   (12,335)
----------------------------------------------------------------------------
Net earnings from continuing
 operations before other expenses       4,683     3,695    11,612     7,844
----------------------------------------------------------------------------

The Company utilizes EBITA (defined as earnings before interest, amortization, unrealized derivative (gain) loss, other expenses, income taxes and net earnings from a discontinued operation). 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.

Andrew Peller Limited common shares trade on the Toronto Stock Exchange (symbols ADW.A and ADW.B).

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
(in thousands of dollars)                           December 31     March 31
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                           2010         2010
                                                              $            $
----------------------------------------------------------------------------

Assets
Current Assets

Accounts receivable                                      28,776       22,902
Inventories                                              91,649       89,693
Prepaid expenses and other assets                         2,513        2,429
Income taxes recoverable                                      -        1,327
                                                  --------------------------
                                                        122,938      116,351
Property, plant and equipment                            92,651       95,728
Intangibles and other assets                             13,679       14,164
Goodwill                                                 37,473       37,473
                                                  --------------------------
                                                        266,741      263,716
                                                  --------------------------
                                                  --------------------------

Liabilities
Current Liabilities

Bank indebtedness (Note 6)                               50,358       48,877
Accounts payable and accrued liabilities                 27,177       28,229
Dividends payable                                         1,197        1,197
Income taxes payable                                        738            -
Current derivative financial instruments                  1,575        1,922
Current portion of long-term debt (Note 6)                5,333        6,158
                                                  --------------------------
                                                         86,378       86,383

Long-term debt (Note 6)                                  44,037       47,633
Long-term derivative financial instruments                2,189        1,667
Employee future benefits                                  3,992        4,530
Future income taxes                                       9,421        9,838
                                                  --------------------------
                                                        146,017      150,051
                                                  --------------------------

Shareholders' Equity

Capital Stock                                             7,375        7,375
Retained Earnings                                       113,349      106,290
                                                  --------------------------
                                                        120,724      113,665
                                                  --------------------------

                                                        266,741      263,716
                                                  --------------------------
                                                  --------------------------

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


ANDREW PELLER LIMITED
Consolidated Statements of Earnings,
 Comprehensive Earnings and Retained
 Earnings
These financial statements have not been
 reviewed by our auditors
(in thousands of dollars, except per       For the Three       For the Nine
 share amounts)                             Months Ended       Months Ended
                                             December 31        December 31
                                           2010     2009      2010     2009
                                              $        $         $        $
---------------------------------------------------------  -----------------

Sales                                    74,983   71,945   208,480  203,856
Cost of goods sold, excluding
 amortization                            46,293   46,515   126,983  129,813
                                        -------- --------  -------- --------
Gross profit                             28,690   25,430    81,497   74,043
Selling and administration               18,412   16,903    53,507   50,818
                                        -------- --------  -------- --------

Earnings before interest and
 amortization                            10,278    8,527    27,990   23,225
Interest                                  1,605    1,401     5,432    5,947
Amortization of plant, equipment and
 intangible assets                        2,050    2,164     6,104    6,174
                                        -------- --------  -------- --------
Earnings before other items               6,623    4,962    16,454   11,104
Net unrealized losses (gains) on
 derivative financial instruments          (342)  (1,103)      174   (2,443)
Other expenses (Note 4)                      38    1,247     1,076    1,247
                                        -------- --------  -------- --------
Earnings before income taxes              6,927    4,818    15,204   12,300
                                        -------- --------  -------- --------

Provision for (recovery of) income taxes
Current                                   1,887    1,492     4,971    3,331
Future                                      132     (262)     (417)     281
                                        -------- --------  -------- --------
                                          2,019    1,230     4,554    3,612
                                        -------- --------  -------- --------

Net and comprehensive earnings for the
 period from continuing operations        4,908    3,588    10,650    8,688

Net and comprehensive earnings for the
 period from a discontinued operation         -   11,940         -   12,335
                                        -------- --------  -------- --------

Net and comprehensive earnings for the
 period                                   4,908   15,528    10,650   21,023

Retained earnings- Beginning of period  109,638   92,517   106,290   89,416

Dividends:
Class A and Class B                      (1,197)  (1,197)   (3,591)  (3,591)
                                        -------- --------  -------- --------
Retained earnings - End of period       113,349  106,848   113,349  106,848
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------

Net earnings per share from continuing
 operations
Basic and diluted
  Class A shares                           0.33     0.25      0.73     0.60
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------
  Class B shares                           0.30     0.21      0.64     0.52
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------

Net earnings per share from discontinued
 operation
Basic and diluted
  Class A shares                           0.00     0.82      0.00     0.85
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------
  Class B shares                           0.00     0.72      0.00     0.74
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------

Net earnings per share
Basic and diluted
  Class A shares                           0.33     1.07      0.73     1.45
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------
  Class B shares                           0.30     0.93      0.64     1.26
                                        -------- --------  -------- --------
                                        -------- --------  -------- --------


ANDREW PELLER LIMITED
Consolidated Statements of Cash Flows
These financial statements have not been   For the Three       For the Nine
 reviewed by our auditors                   Months Ended       Months Ended
(in thousands of dollars)                    December 31        December 31
                                           2010     2009      2010     2009
                                              $        $         $        $
---------------------------------------------------------  -----------------

Cash provided by (used in)

Operating activities
Net earnings for the period               4,908    3,588    10,650    8,688

Items not affecting cash:
  Loss on disposal of property and
   equipment                                  -        -       678        -
  Amortization of plant, equipment and
   intangibles                            2,050    2,164     6,104    6,174
  Employee future benefits                 (304)    (113)     (538)    (566)
  Net unrealized (gains) losses on
   derivative financial instruments        (342)  (1,103)      174   (2,443)
  Non cash impairment charge                  -    1,247         -    1,247
  Future income tax provision (recovery)    132     (262)     (417)     281
  Amortization of deferred financing
   costs                                     34       53       404       77
                                        -------- --------  -------- --------

                                          6,478    5,574    17,055   13,458
Changes in non-cash working capital
 items related to operations (Note 5):  (11,815)  (6,792)   (6,217)  (6,254)
                                        -------- --------  -------- --------
                                         (5,337)  (1,218)   10,838    7,204
                                        -------- --------  -------- --------

Investing activities
Acquisition of businesses                     -        -      (825)    (825)
Proceeds from disposal of property and
 equipment                                    -        -       766        -
Purchase of property, plant and
 equipment                               (1,759)  (1,477)   (4,669)  (4,434)
                                        -------- --------  -------- --------
                                         (1,759)  (1,477)   (4,728)  (5,259)
                                        -------- --------  -------- --------

Financing activities
Increase in deferred financing costs          -     (911)        -     (911)
Increase in bank indebtedness             9,627    3,202     1,481    4,411
Payment to partially unwind a derivative
 financial instrument                         -   (1,600)        -   (1,600)
Repayment of long-term debt              (1,334) (18,751)   (4,000) (21,417)
Dividends paid                           (1,197)  (1,197)   (3,591)  (3,591)
                                        -------- --------  -------- --------
                                          7,096  (19,257)   (6,110) (23,108)
                                        -------- --------  -------- --------

Cash used in continuing operations            -  (21,952)        -  (21,163)
Cash provided from discontinued
 operation                                    -   21,952         -   21,163
                                        -------- --------  -------- --------

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

Supplemental disclosure of cash flow
 information
Cash paid (received) during the period
 from continuing operations for
  Interest                                1,581    1,537     5,426    6,072
  Income taxes                              826   (2,707)    2,905   (3,519)

Cash paid during the period from
 discontinued operation for
  Income taxes                                -       34         -      757

Cash paid (received) during the period
 for
  Interest                                1,581    1,537     5,426    6,072
  Income taxes                              826   (2,673)    2,905   (2,762)

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


Notes to the Interim Consolidated Financial Statements
December 31, 2010 and 2009
(in thousands of dollars)

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, 2010 and 2009. 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. 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, 2010 and for the three and nine-month periods then ended.

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. Discontinued operations

During fiscal 2010, the Company entered into an agreement to dispose of its ownership interests in Granville Island Brewing Company Ltd. and Mainland Beverage Distribution Ltd. (collectively referred to as "GIBCO") effective October 1, 2009.

In connection with the sale of GIBCO, the Company continues to manufacture product for the purchaser. In doing so, the Company incurred and was fully reimbursed for expenses in the amount of $351 and $1,812 for the three and nine months ended December 31, 2010.

Other financial information relating to the discontinued operation is as follows:


Condensed statement of net earnings from discontinued operation

                                                For the three  For the nine
                                                 months ended  months ended
                                                  December 31   December 31
                                                         2009          2009
                                                            $             $
----------------------------------------------------------------------------
Sales                                                       -        10,509
Cost of goods sold                                          -         5,452
                                                ----------------------------
Gross profit                                                -         5,057
Selling and administration                                 30         4,293
Amortization                                                -           213
Gain on sale of discontinued operation                (13,337)      (13,337)
                                                ----------------------------
Earnings before income taxes                           13,307        13,888
Provision for income taxes                              1,367         1,553
                                                ----------------------------
Net earnings from discontinued operation               11,940        12,335
                                                ----------------------------
                                                ----------------------------

Included in cost of goods sold is $nil and $2,015 for the three and nine months ended December 31, 2009 respectively for costs relating to manufacturing services provided by a related company.


Condensed statement of cash flows from discontinued operation

                                                For the three  For the nine
                                                 months ended  months ended
                                                  December 31   December 31
                                                         2009          2009
                                                            $             $
----------------------------------------------------------------------------
Cash used in operating activities                      (1,335)       (2,124)
Cash provided by (used in) investing activities        23,287        23,287
Cash provided by (used in) financing activities             -             -
                                                ----------------------------
                                                       21,952        21,163
                                                ----------------------------
                                                ----------------------------

4. Other (income) expenses

During the second quarter, it became evident that approximately 98 acres of vines developed by the Company on leased land in Oliver, British Columbia were irreparably damaged. The Company wrote down vineyards included in property, plant and equipment related to this vine damage in the amount of $1,712 and inventories in the amount of $260. The Company is insured for a portion of the loss and has recorded an amount receivable of $694 based on an estimate of its entitlement under the insurance policy. The pre-tax loss recorded as a result of the damaged vines is $1,278.

Also included in other (income) expenses is a gain in the amount of $340 pre-tax related to the sale of a portion of a vineyard on May 25, 2010. The proceeds from the sale were $766.

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 three For the nine For the nine
                      months ended   months ended months ended months ended
                       December 31    December 31  December 31  December 31
                              2010           2009         2010         2009
                                 $              $            $            $
----------------------------------------------------------------------------
Accounts receivable         (2,363)        (3,787)      (5,180)      (5,013)
Inventories                   (992)        (2,276)      (1,956)       3,220
Prepaid expenses and
 other assets                   81            439          (84)      (1,028)
Accounts payable and
 accrued liabilities        (9,602)        (3,063)      (1,062)      (7,981)
Income taxes
 payable/recoverable         1,061          1,895        2,065        4,548
                    --------------------------------------------------------
                           (11,815)        (6,792)      (6,217)      (6,254)
                    --------------------------------------------------------
                    --------------------------------------------------------

6. Bank indebtedness and long-term debt

On August 27, 2010, the Company modified the terms of its short-term loan facility. The modified facility matures on August 26, 2011 (previously - November 9, 2010) and incurs interest at the Royal Bank of Canada prime rate plus 2.00% (previously - plus 2.75%).

The Company's interest rate on its term loan is currently 5.64% and is fixed by an interest rate swap. The Company also pays additional interest of 0.50% based on leverage and a funding premium of 0.80%.

7. Comparative Figures

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

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.

Contacts: Andrew Peller Limited Mr. Peter Patchet CFO and EVP Human Resources (905) 643-4131 Ext. 2210 peter.patchet@andrewpeller.com

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