Tough times ahead for wine industry

Wine makers see a tough road ahead to return the wine industry to profitability.

The industry says it lowered the volume of grapes harvested in 2010 by 19,000 tonnes - 7% below last year's record of 266,000 tonnes.

New Zealand Winegrowers says that will help reduce an excess of wine that was driving prices down.

But John Buck, who owns Te Mata Estate winery in Hawke's Bay, says long term damage has been done to the industry's credibility by selling wine cheaply.

He says reducing production now won't reverse that.

Marcus Pickens from Wine Malborough says the industry will have to keep cutting production to get over-supply under control.

NZ Winegrowers acknowledges it does not want the 2011 and 2012 harvests to be bigger than 2008 or 2009.

Chief executive Philip Gregan says no wine growing regions are exempt from the challenges facing the industry.