Smaller harvest is good news for New Zealand

The wine grape vintage in New Zealand this year is going to be smaller which is good news, according to Philip Gregan head of New Zealand Wine Growers.

The 2009/10 vintage is approximately 265 million tonnes

Exports in the year to April 2010 comprise 140 million litres total with the UK taking 47.1m, Australia 45m and the US 26.7m, Canada 7.3m, Germany 1.8m, Ireland 1.7m, the Netherlands 1.5m, China 1.4m and Denmark 1.1m. In 2008/9, it totalled 85m litres.

With a large vintage last year coinciding with the economic downturn, Gregan told Drinks International that he was relieved this year’s vintage was down and therefore more in line with world demand.

“The vintage being at the lower end of the range is, in my opinion, great news,” said Gregan. “By having a balance between supply and demand, it is positive for the market.”

New Zealand is in an enviable position in terms of the average price per bottle. An almost entirely premium producer, its wines command an impressive £6.05 in its largest export market the UK, compared to a total market average of £4.35.

The significant challenge is the exchange rates with the NZ dollar strong against a weakening pound. “It’s a hard yard for us,” said Gregan ruefully.

Asked about export markets, Gregan revealed he has been in China twice in the last month. He sees it as a “large opportunity” as it has a “unique relationship”. New Zealand was the first country in the world to recognise formally China. It promulagated a free trade agreement and trade tariffs on New Zealand imports come down in 2012.

Gregan said of Shanghai: “You could be in Paris. It is like Europe so we see it as a great opportunity.”

David Cox who looks after Europe for NZWG sees the Nordic monopolies, Sweden, Norway and Finland as good opportunities for New Zealand wine. He is also focusing on Switzerland, Austria and the hotel, restaurant, not retail, in Germany. He foresees opportunities further east in the likes of the Czech Republic, Poland and Russia, but that is longer term.

“There is also Ireland,” said Cox. “There are some who think the lights have been turned off but it is 15% up for us.”

Gregan expressed his delight at the way Australians have over a relatively short period got a taste for their nearest neighbour’s Sauvignon Blanc. Asked how come, he said it was purely a case of the Australians turning their backs on their own white wines, particularly oaky Chardonnays and preferring the lighter, more zesty world beating signature Sauvignon Blancs from New Zealand.

With its Pinot Noirs particularly from Cental Otago on South Island widely regarded as world class and its aromatic whites such as Pinot Gris and Riesling offering quality alternative to Sauvignon, New Zealand is in a strong position. The only minus note is its Cabernet, Bordeaux blends, mainly from the warm region of Hawkes Bay on North Island , are not striking a chord with consumers.