NZ maintains 25% price premium above rest of still wine category
In the UK market, bottles of New Zealand wine carry price tags that are more than 25% higher than any other nation’s still wines. db reports.
At the annual New Zealand trade tasting this week it was revealed that New Zealand producers are able to charge more for their wines in the UK market than producers from any other still wine-making region. And UK consumers are more than willing to meet these higher prices.
While the average sales price per litre of still wine is £8.88 in the UK market, wines from New Zealand are priced at an average of £11.10 per litre, representing a £2.22 premium.
“In the last 12 months we’ve maintained our price premium, which is so, so important to us,” said Philip Gregan, president of trade body New Zealand Winegrowers.
He added that he was pleased the New Zealand wine industry had protected its “cache and reputation with the trade and with consumers.”
The UK represents 25% of New Zealand wine exports, and generates half a billion GBP worth of retail for the Antipodean nation. The growth in value seen during the last year, said New Zealand Winegrowers, is roughly the equivalent of adding £13 per UK store per week during 2023.
The news shows that New Zealand is now second only to Italy on value contribution to the still wine category in 2023. However, Italy is still far ahead in the value race, with its still wines generating £73, 212, 747 compared to New Zealand’s value contribution of £37, 419, 449.
What about volume?
Between 2022 and 2023, the volume of New Zealand wine exports to the UK jumped by 5.6% compared to the volume growth of the rest of the still wine category in that market which saw a 2.9% lift – meaning that New Zealand enjoyed just short of double the volume growth of other countries within the UK market.
Some of this growth can be attributed to the free trade agreement signed in May 2023 between the UK and New Zealand, which Wines of New Zealand said had “removed technical barriers to trade”.
The rate of sale for New Zealand Sauvignon Blanc in particular was “almost three times greater” in the last 12 months than the rate of sale for Sauvignon Blancs from other nations such as Chile and South Africa, combatting concerns over these countries in particular grabbing a bigger slice of the pie following New Zealand’s significant wine shortage in 2021.
However, as db has reported, the 2024 New Zealand harvest is expected to be “significantly down” on the last two years, so the fact that its wines are able to command a premium price in the UK, one of its biggest export markets, may be a cushion for producers.