Winegrowers toast increasing sales

Fairfax Media

Strong overseas sales of bottled wine equate to good news for New Zealand winegrowers.

An unexpected sales surge that lowered national wine reserves means things are looking up for the New Zealand wine industry.

The industry has been haunted by oversupply, which sent grape prices plummeting in the past two years.

This year's harvest has already begun for sparkling wine varieties in the Central Otago region, but picking of the area's flagship variety, pinot noir, is expected to begin within the next two weeks.

In his summation of the 2011 pre-vintage survey, New Zealand Winegrowers chief executive Philip Gregan yesterday said wine sales for the year ending June would be 15million litres higher than expected.

This was caused by strong overseas sales of bottled wine.

"Bottled wine exports are continuing to grow at 10 per cent annually, and our performance in key markets, such as the UK, the US, Australia, and emerging Asian markets is very encouraging," he said.

"The good news for the Central Otago region is that pinot noir is the fastest-growing export variety, with a growth of 26 per cent in the past year. As a result of overall export growth, we now estimate total sales for the year ending June 2011 will be 220 million litres, compared to earlier forecasts of 205 million litres."

This meant the yield from the 2010 vintage would probably exceed that of the previous year by 30 million litres.

Any vintage could contain wine several years old that was not sold, and was put into the national reserve, Mr Gregan said.

Essentially, this stabilises the industry because it brings the reserve total down to about the same amount, Mr Gregan said.

"You've got to have a certain level of stock to sell.

"The simple fact is this year there will be the same quantity of wine produced as was sold in the previous year bringing a good level of equilibrium and balance."

Some of the export growth had been driven by lower prices.

Retailers who had started their own in-house "home" brands had helped drive lower price exports, but provided good balance to premium brands in the total export market, Mr Gregan said.

"The big point is the sales are being made."