ECONOMIC REPORT TOASTS $1.5 BILLION WINE SECTOR’S SOARING GROWTH

    WINE:  The rapidly-growing wine industry is playing a pivotal role in national economy, a study showed on Thursday.
   
    "The contribution grape growing and winemaking make to the New Zealand economy...totals over $3.5 billion of revenue," NZ
Winegrowers chairman Stuart Smith said.

    This included $1.52 billion in direct contribution to the gross domestic product.

    In the key grape-growing region of Marlborough, the industry accounted for 20 percent of the regional economy, plus about 2 percent of the Hawke’s Bay economy.

    Mr Smith said wine exports had grown at 23.8 percent over the past 20 years -- four times the rate of all other goods -- and now represented 2.2 percent of all exports.

    That made it the 11th largest export (up from 19th in 2003).

    Figures released today in a New Zealand Institute for Economic Research (NZIER) report showed that over the past five years only cereal and mineral fuels exports grew faster than wine, which has contributed about 5 percent of total growth in merchandise exports.
Exports revenue generated for each hectare of grapes is around $28,000, second only to kiwifruit which (around $64,000) and much higher than dairy, lamb, beef and forestry (less than $5000).

    Mr Smith, who represents 1200 grape growers and 600 winemakers, said wine also boosted tourism earnings, accounting for an estimated 225,000 visitors, which added an extra $907 million to the economy.

    These "wine tourists" tended to stay longer and spend more per visitor ($4030 compared to the average of $2850).

    The industry commissioned the report to better understand its "breathtaking transformation" in the past two decades, said Mr Smith.
It now faced the challenge -- in very tough economic times -- of continuing to build on its success, and needed continued investment, and a focus on quality and sustainability.

    NZ Winegrowers chief executive Philip Gregan said the report was the first of its kind and put some hard numbers on the impact and size of the industry.

    "All we’ve had up until now has been vineyard numbers and export numbers," he said

    Mr Gregan said the wellbeing of more than 500 small winemakers -- whose survival was at risk with the global downturn -- was of most concern to the industry.