Winegrowers chairman plays down impact of grape glut

The glut of wine resulting from a bumper 2008 grape harvest could force adjustments that will be good for the industry in the long run, New Zealand Winegrowers chairman Stuart Smith says.

A record 285,000 tonnes of grapes were produced this year, up 40% on 2007, leading many wines to be sold at discounted prices due to excess supply.

But Mr Smith says there are positives to be taken from the overproduction.

He says the prodigious harvest has more than rectified low industry stock levels heading into 2008, while also allowing growers to branch out into different types of wines rather than just growing New Zealand staples such as Sauvignon Blanc.

However, the biggest benefit for grape growers could be the mental adjustment necessitated by the sudden surge in production.

“Growers are on a much more business-like footing heading in to 2009 than they were in 2008,” says Mr Smith.

“They were given a big reality check with the size of the latest vintage; it forced a re-adjustment of their thinking.”

He says the harvest in 2009 won’t be as hefty as 2008, for a multitude of reasons: the focus will be more on quality than quantity, and drought in Gisbourne is likely to reduce production in that area.

Long-term, the growth in New Zealand’s grape harvest is likely to be limited by the lack of extra land suitable for profitable growing, Mr Smith says.

And that’s a good thing for the industry, he says: “It’s not so much about the size of the harvest but how it grows.

“If the growth is controlled we’ll have a good future, but if it’s uncontrolled we could outpace growth in demand.”