Grape cap hits Marlborough

New Zealand Winegrowers chairman Stuart Smith is predicting that for the first time yield caps, not price, will be the major talking point in negotiations between wineries and growers in Marlborough this season.

Six of the largest wineries in New Zealand from Montana to Nobilos all buy fruit from Marlborough's 568 wine growers.

Mr Smith said generally wineries came out with their prices over the Christmas period but not all had done so yet.

"I think it is fair to say at this early stage that prices appear to be down on last year but so far, of the prices I have heard, there has been a huge variation between high and low."

He believed the "major feature" this year would be the yield cap per hectare, with growers tied down to a specific tonnage.

"Last year it came in a little but this is the first year it will be a major factor in Marlborough," he said.

"Two years ago there was virtually no yield cap because the laws of supply and demand had overridden the normal parameters and wineries would take whatever was produced per hectare.

"But this was an anomaly with sauvignon blanc in Marlborough. Virtually every other area in New Zealand and throughout the rest of the world had yield caps."

He would not be drawn on either current prices or yield caps per hectare but one Marlborough winegrower, who did not wish to be named, said wineries were offering about $1200 per tonne with a yield cap of 12 tonnes per hectare.

"That's getting close to break-even point," he said.

He added that margins were "very tight" on his 40-hectare family vineyard and in order to cut down on high contractor's costs, family members were rolling up their shirt sleeves and getting stuck into vineyard work themselves.

Contract growers report wild variations with prices offered as low as $600 a tonne to $1600 for sauvignon blanc. Restrictions per hectare went as low as 9.6 tonnes.

Mr Smith, co-owner of 32-hectare Torea Wines and Fairhall Downs, said theoretically it cost growers $10,000 per hectare to produce the grapes.

He believed the yield cap was a "good thing" for quality but the "ultimate arbiter of yield" was nature and the huge vintage of 2008 had resulted in a record harvest and over-supply.