Cherie Howie
The Marlborough Express

Wine exports are up for 2010, but grape harvests have fallen as growers trim yields because of oversupply last year. Exporters are getting much less for each litre of wine, according to New Zealand Winegrowers' annual report released yesterday. It shows a 5 per cent increase in exports pushed revenues to a record $1.04 billion for the year ending June 30. But at the same time, the grape harvest fell 7 per cent to 266,000 tonnes.

Marlborough matched the national trend, with production down 5 per cent to 183,000 tonnes.

An oversupply of wine from the bumper grape harvest in 2008, the international economic downturn and the strong New Zealand dollar led grape prices to plummet last year, forcing some growers out of business.

However, New Zealand Winegrowers' Marlborough-based chairman Stuart Smith said yesterday the latest 266,000-tonne vintage matched the estimated annual demand and produced high-quality fruit. It was vital that supply and demand were balanced, Mr Smith said.

"Oversupply and the global financial crisis have tipped the scales in recent years. But the well-managed, high-quality 2010 vintage is an important step towards bringing production into alignment with market demand."

Average yields were down from 9.2 tonnes a hectare in 2009 to eight tonnes this year, Mr Smith said.

Other positives included increasing bottled wine exports, stronger average prices than competitors and new markets, he said.

"While there is still a long way to go before the sector is restored to full health, the path forward is clear. For the next two years, the focus must remain on rebalancing and recovery.

"From there, future growth prospects must target enhanced value for New Zealand's premium wines ahead of increased production capacity."

Sauvignon blanc remained the dominant variety, making up two-thirds of wine, although production fell 2 per cent to just over 174,00 tonnes.

Merlot, chardonnay and pinot noir production also dropped, although pinot gris bucked the trend with a modest increase of 12 per cent, Mr Smith said.

However, an unfavourable exchange rate, the global recession and bulk wine exports still eroded profits, with the average value of bottled wine exports falling 11 per cent to $8.77 a litre  similar to values in early 2006, he said.

Sauvignon blanc remained a favourite overseas, with exports up by just over a quarter to reach 116 million litres.

Pinot noir exports also increased, going up a third and topping an estimated $100 million for the first time.

Britain and Australia remained the leading export destinations for New Zealand wine, although shipments to Canada and the United States also grew, Mr Smith said.

The export story of 2010 was the emergence of Asia, particularly China, where shipments soared by 180 per cent to $17m, he said.

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