Winegrowers: Savvy could sell out

Despite talk of a wine glut in Marlborough, some winegrowers are predicting the region could sell out of 2011 sauvignon blanc within a year.

Yealands Estate director Peter Yealands believes demand for the wine will outstrip supply by January.

''Even though we are going to have a small increase in yields this vintage, the market momentum will be greater than that.''

Following the bumper crop of 2008 and 2009, many wine companies stepped up their marketing to find new markets and expand existing ones.

Yealands is predicting grape prices will rebound to $1800 or $2000 a tonne by 2013.

During the last two years, many growers had been getting as little as $1000 a tonne and even less for bulk wine, which barely paid the bills, let alone the interest, he said.

''I think it will get back up to its previous level; it might take a few years.''

He also expects wine companies will return to preferring a contract with growers to secure their grape supply and said consumers will notice the change.

''In a year's time you won't see sauvignon blanc under $10 and that will be a good thing.''

While some growers do not agree with Yealands' timeline, others believe the future is positive for the industry that has struggled since a bumper crop coincided with the economic downturn in 2008.

New Zealand Winegrowers chairman Stuart Smith said 2011 Marlborough wines could be in short supply as a 16 per cent growth in wine exports by February would clear the 2010 vintage and any surplus from earlier years.

The projected harvest of 310,000 tonnes this season would make 220 million litres of wine the equivalent of what would be sold in 2010-11.

''We can't grow sales next year because we don't have more supply,'' Smith said.

Some companies planned to release 2011 wines two months early because they had sold all their 2010 production.

However, the shift in supply and demand had not lifted spot prices, Smith said.

Despite oversupply in 2008, market lag meant bulk wine values did not drop appreciably until several months after vintage.

This year the opposite was happening, with static prices on the bulk market despite empty tanks.

Saint Clair winery owner Neal Ibbotson said he believed there was a light at the end of the wine industry tunnel.

His winery was selling into new markets in eastern Europe and demand in established European markets had increased.

''Sales are increasing in growing and existing markets and [the future] looks strong, but to date we haven't seen any real increase in the bulk wine price.''

Ad Feedback   Spy Valley Wines general manager Blair Gibb said he believed the low prices would linger longer than Yealands predicted.

''Drive round the valley and you still see some vines with grapes on them and I'd say there's still a good few years of hard toil ahead of us.''

Meanwhile, Canterbury's oldest commercial winery is up for mortgagee sale after the company was placed into liquidation last month.

St Helena Vineyard in Belfast was established by the Mundy family in 1978. It won Canterbury's first gold medal at a wine competition in 1982.

The 41.6 hectare winery operation produces a range of styles and features a shop for public tastings and off-premise sales to visitors.

Now the land and operation, is being marketed by Bayleys Canterbury, after the property's owner, MJ Mundy Ltd, was placed into liquidation in March.

Bayleys Canterbury director Bill Whalan said that at its peak, St Helena was the region's second biggest wine producer, after Giesen Estate.

"The opportunity is there for existing wineries to purchase the land for its vine plantings, or to access the production plant in conjunction with existing production operations which could deliver sauvignon blanc harvests from Marlborough for example."

Whalen said recent sales figures shows there is still strong support for New Zealand wine production.

The brand and company which owns the land and plant is not included in the sale. Offers close on May 31.