Moderation proves a tough call

Wineries say this year's grape harvest is looking bountiful, but there are mixed feelings about the industry's ability to keep within volumes that will help lift the price.

The industry is in survival mode after a glut in 2008 and 2009, which has left many indebted wineries struggling to compete with discounted prices locally and a strong New Zealand dollar.

Grape prices more than halved, prompting the industry to call on its members to keep this year's harvest down to last year's level of 265,000 tonnes. That target was lifted to 310,000 tonnes last month when export sales came in higher than predicted.

Marlborough winemaker Allan Scott last week said he thought the harvest could soar as high as 350,000 tonnes. But after visiting Central Otago, he said yields in other regions were looking more moderate, and that hitting the target was more likely.

"I think the sauvignon blanc harvest is going to be big, but certainly everything else is really coming in rather modestly, which is a good sign. I don't think we'll hit the big tonnes.

"It's super-ripe and really fantastic fruit. It's amazing.

"We've had a glorious late summer and autumn, so the fruit is of incredible quality."

Renwick grower Willie Crosse said "long-term players" were showing a lot of discipline, but the current harvest, even though it would be sold, would do little to curb the growing bulk wine trade.

"You have to remember a very significant percentage of [last year's vintage] was sold as bulk.

"They weren't all premium-branded bottle wine sales. That needed to happen to get rid of the surplus, but it's happened with much reduced winery profitability and severe erosion of the value of the Marlborough wine brand."

About 30 per cent of New Zealand's wine exports are believed to be sold for low-priced bulk wine.

Blenheim-based Stuart Smith, president of the Grape Growers Council, said prices were low but the glut that had haunted the industry had gone.

"Things are definitely on the up . We've gone through what inventory we had hanging over, so the cupboard's bare, essentially."