Wine prices to rise as international sales sparkle

The days of cheap Kiwi wine may soon be over.

Recent years have seen the industry beset by recession and too much wine, and that meant cut-throat prices.

But the signs are that surplus is now going down as international sales go back up, and that suggests the price of a bottle at home could go up too.

The vines are laden, the harvest will be big and for the first time in years, that's not a bad thing.

"The difference this year is that wineries have demand for their products," says winemaker Nikolai St George.

"They are not just producing something and hoping it sells. They are a lot smarter now, and we are not going to see the problems that we had in 2008."

Then grapegrowers were told to cut back - too much wine, combined with the recession, saw several vineyards close.

Now international sales have picked up again, those who survived are selling off their oversupply.

"We have reduced stock holding in the industry by about 40 million bottles of wine," says Philip Gregan, Winegrowers NZ. "That has improved cash flow, lowered stock levels and provides opportunity for bigger vintage."

If international drinkers have re-discovered New Zealand wine, it's too early for the profits to be pouring in.

"I think a lot of people can see light at the end of the tunnel and that is very postive going forward," says Mr Gregan.

But what's good for the industry could be bad for New Zealander's wallets.

"They will have to expect that prices will rise eventually," says Andy Goulden of The Wine Vault. "A lot of producers can't afford to keep selling the products at the price that they are."

When will that happen?

"I don't know that we are going to see a lot of differences in wine prices in year ahead," says Mr Goulden, "but we would like to think in about 12 months or more we would see a lift in wine prices, and hopefully grape prices, for the benefit of our growers."

Growers will certainly toast that.