Can NZ avoid another wine glut?

17th March, 2014 by Gabriel Stone

As New Zealand harvests its second bumper vintage in a row, one winery owner has expressed concern that the country will repeat the oversupply pricing problems of 2008.

NZ-wine“Sadly this year there’s a big danger that we’ll have a glut again,” Robert Wilson, co-owner of Hawke’s Bay producer Trinity Hill, told the drinks business. “So many people have invested in vineyards that aren’t really needed.”

Although acknowledging that New Zealand Winegrowers “has really fought hard” to prevent the country undermining its prices, as well as stressing that the 2014 vintage was likely to result in “some great wines”, Wilson “concluded: “We have to accept that New Zealand wine is now a volume driven business.”

However, New Zealand Winegrowers’ CEO Philip Gregan welcomed the prospect of another large harvest as necessary for the country to meet its growing sales around the world. According to the generic body’s Annual Report 2013, exports of New Zealand wine have increased in value by 22% since 2009.

In the UK, New Zealand’s second largest value export market after Australia, the country’s average price in the off-trade is currently just over £7 (Nielsen Dec 2013), placing it ahead of every other country of origin. Speaking to db a year ago in the wake of the large 2013 harvest, Gregan stressed the importance of protecting this strong price position.

Despite the potential threat to this strategy from two consecutive large harvests, he observed: “While vintage 2013 was large, vintage 2012 was small so you get a better perspective by adding those vintages together.” Indeed, Gregan added, “some wineries were still quite short on wine after 2013, hence a desire for a larger crop this year.”

What’s more, he assured, “the big difference between now and 2008 is that there are no new vineyards coming into production over the next three years so we are just as likely to have small as large harvests over that time. There is no tsunami of new vineyards to boost production over that time.”

Far from agreeing with Wilson that producers have planted more vineyards than are needed, Gregan argued that there was a need for further plantings.

“The prevailing view is that while the crop may be larger this year this is no certainty for the future,” he told db. “As such when combined with rising sales we are going to see quite a few new vineyards planted over the next few years.”

2 Responses to “Can NZ avoid another wine glut?”

  1. bill olde says:

    when you quote prices achieved in the various export markets does the price include the cost of packaging. eg $7 a litre is this the packaged product price?

  2. Gabriel Savage says:

    The Nielsen figure refers to the final price per bottle once it’s on the shelves.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Job vacancies

PR Account Executive

Clementine Communications Ltd
Fulham, UK

PR Senior Account Manager

Clementine Communications Ltd
Fulham, London

Marketing Manager

Berkmann Wine Cellars
London, N7, UK

Brand Manager

Berkmann Wine Cellars
London, N7, UK

Sales Account Manager

Jascots Wine Merchants
London, UK

Marylebone Sales Manager

Philglas & Swiggot
Marylebone, London, UK

Area Sales Manager

Bon Coeur Fine Wines
North England, UK

Procurement Assistant – Wine

Adnams PLC
Southwold, UK

Account Manager Central London

Speciality Drinks Ltd
London, UK

Brand Ambassador

Speciality Drinks Ltd
London, UK

National Business Development Manager

Speciality Drinks Ltd
London, UK

Marketing Assistant

Hatch Mansfield
Ascot, Berkshire, UK

Marketing Manager

Bancroft Wines
London, UK

Regional Sales Manager – Scotland

Bancroft Wines
London, UK

The Global Sparkling Masters 2017

Deadline : 25th August 2017

The Global Malbec Masters 2017

Deadline : 25th August 2017

Global Chardonnay Masters 2017

Deadline : 1st September 2017

The Global Sauvignon Blanc Masters 2017

Deadline : 1st September 2017

Click to view more

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

The Global Organic Masters 2017

The drinks business is thrilled to announce the launch of The Global Organic Masters

The Drinks Business Awards 2017

Now in its 15th year, the db awards have become the most authoritative, internationally respected badge of achievement in the alcoholic drinks industry.

The Asian Cabernet Sauvignon Masters 2017

the drinks business Hong Kong announces its first year of The Asian Cabernet Sauvignon Masters.

Click to view more