Grape expectations down for this vintage
Smaller grape growers are being squeezed and new vineyard plantings have been stoppered as economic pressures and oversupply problems hit the New Zealand wine industry.
New Zealand had a record grape harvest of 285,000 tonnes in 2008 but suffered oversupply in the market, domestic sales were down and export prices fell 2 percent.
Predictions are that growers will be thinning their crop this year -- which on the upside could mean better quality wines.
The area under vines in New Zealand had tripled to about 30,000ha in the last decade, according to New Zealand Winegrower figures.
However, this year new plantings had tapered of to "pretty much nothing" or about 10 percent of what they were a year ago, judging by nursery and vineyard post orders, said Marlborough grower and developer Peter Yealands.
There were few buyers either, for the some of the 68 vineyards or vineyard developments were listed for sale on the website www.realestate.co.nz.
Most of them were smaller blocks, 70 going for under $1 million.
The bulk were in Central Otago and Marlborough, and ranged in price from $168,000 for a 4.3ha block near Kurow to 6.6 million for 16ha for a Bannockburn vineyard.
Mr Yealands said that within Marlborough only two or three vineyards were sold in the last six months.
Valuations on vineyards were down about 10 to 15 percent on what they were 12 months ago, he said.
"There isn't much interest from purchasers because most are waiting to see how the next vintage pans out."
Mr Yealands said there would be some growers without fruit supply contracts who would be worried.
This autumn's vintage would see wineries start exercising contract clauses that limited maximum yields per hectare, rather than by vineyard, he said.
That would mean growers would have to start thinning crops -- which would improve the quality of the vintage.
Wineries could also be making room for the 2009 vintage by getting rid of some of the 2008 wine, some of which was of questionable quality, and in some cases should not have been harvested.
Mr Yealands said it was unfortunate that such pressures had hit the growing industry just before Marlborough had realised all its growing potential.
New Zealand Winegrowers chief executive Philip Gregan also believed there would be very little planting next year.
He said growers should this year be controlling their yields, and management of yields would be very important in matching market demand.
Mr Gregan said that in tight economic times people still drank wine but they tended to go for something cheaper.
However, winemakers should not start heading downmarket, he said.
"That's not the route to profitability."