January bulk wine exports down
Bulk wine sales ballooned in December as wineries moved to off-load excess wine before the upcoming vintage, but fell in January to mark the first monthly decline in bulk exports in two years.
Historically, bulk wine exports have accounted for less than 5 per cent of total monthly export volume.
A New Zealand Winegrowers January report showed bulk wine exports accounted for 25 per cent of exports in December 2009 and 16 per cent in January.
January was 42 per cent down on the same month a year earlier and marked the first time time in two years the figure had fallen compared to the previous month.
New Zealand Winegrowers chairman Stuart Smith said NZW would prefer December's bulk export numbers were lower, but believed many wineries and growers were taking the necessary steps to decrease the amount of excess wine produced this coming vintage.
Mr Smith said it was inevitable there would be a significant increase in exports, especially bulk wine, after the unprecedented large 2008 vintage where many wineries were left with excess wine in tanks.
New Zealand Winegrowers estimated the 2008 surplus was about 30 million litres, and the 2009 surplus was about 10 million litres. It is not known how much wine is still in tanks now.
He said the decision about whether to export bulk wine was up to individual growers and wineries, but warned it did have the potential to damage the New Zealand brand.
New Zealand Winegrowers chief executive Philip Gregan said it was good bulk exports were down in January but it was too early to call it a trend.
He said the exchange rate had also reduced prices received for exported wine, particularly in the US and British markets, and businesses were also continuing to battle price pressure from an imbalance in supply and demand.
Prices of bottled wine exported to the major markets of the United States, Britain, Australia and Canada fell in December 2009 compared to the same month a year earlier, the report said.
The biggest fall was in the US market, where prices for packaged wine fell $3.76 per litre.
When bulk wine is included in the overall figure, the price of exported wine in December fell $1.26 to $7.89 per litre in the 12 months ending December 2009.
The total value of wine exported in December was $1.02 billion, up 12 per cent on the same month the previous year. Mr Smith said exports of bottled wine had grown 11 per cent in the 12 months ending January. He said this was a positive trend.