Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Record 2004 vintage but hard marketing lies ahead

Record 2004 vintage but hard marketing lies ahead

The Ministry of Agriculture and Forestry’s (MAF) latest forecasting report on wine production shows a record grape vintage for the year ended June 2004.

The Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF) report finds that the 2003/04 grape harvest produced a record 166,000 tonnes – 40 percent larger than any previous vintage and more than double the frost-affected vintage of 2002/03.

“However, while grape production is on the up and up, there are challenges ahead, and the wine industry will have to put serious investment into marketing and research to find markets for the increased product,” says the report’s author, Policy Analyst Rachel Monk.

SONZAF is an annual roundup of New Zealand’s main agriculture and forestry industries, covering the major issues and trends, the current situation and the medium-term outlook. Each article is written by an industry specialist, and incorporates both modelled price, production and export projections with industry intelligence. One particular feature of SONZAF is that it includes projections based on two alternative exchange rate tracks as well as the main projections. This enables readers to better understand the prices that could result should exchange rates differ from those used in the main projections.

Rachel Monk says export wine sales outperformed expectations in 2004, particularly considering the much reduced 2003 vintage due to frosts. Thirty-one million litres headed offshore. This latest record vintage should see 2005 export sales continue to perform with strength.

But Ms Monk cautions the future’s not all rosy. “Our figures project that by June 2005, the New Zealand FOB wine price is likely to fall by 11 percent.”

Ms Monk explains that this is largely because of the strength of the New Zealand dollar (NZD) against the currencies of our major trading partners. In the medium term the wine export price is expected to rise again on the back of a weaker NZD (assuming favourable exchange rate movements out to 2008).”

The SONZAF wine production report, which makes projections out to 2007/08, says with production expected to continue to expand as new plantings mature, the industry will be reliant on growth in export sales matching growth in production volumes.

“The increasing production volumes of wine for both the domestic and international markets could potentially affect New Zealand’s export returns. New Zealand is going to need to protect and enhance its position as a niche wine producer in order to maintain current export prices.”

Ms Monk says the global wine market is becoming increasingly competitive with industry commentators predicting a world glut. Competition is growing from new world wine producers such as Australia and South America, as well as from old world producers in Europe and the report says it will be vital that New Zealand wine continues to command the high prices in the premium and super-premium wine segments.

“Enhancing our niche status may mean further investing in wine varieties other than the popular Sauvignon Blanc which is under threat of being replicated by competitors from Chile and South Africa.”

The report says the wine industry will need to introduce customers to the new tastes of different varieties and attempt to work collectively to market the New Zealand brand as a point of difference.


Key Facts from the SONZAF 2004 Wine Production Report

The key varieties Sauvignon Blanc, Pinot Noir and Chardonnay made up 76 percent of production this past year, with the country’s key export variety Sauvignon Blanc forming 42 percent of total production. Sauvignon Blanc comprised 63 percent of total wine exports.

The area planted in grapes was up 14 percent over the previous season.

New Zealand wine is exported to nine major markets that take 95 percent of our exports. The three largest markets are the United Kingdom, United States and Australia.

The average price for all varieties of grapes in the year ended June 2004 was $1,876 per tonne – a decrease of two percent on the previous year. Many in the industry were aware the price fall was coming and some believe prices are still at high levels.

The combination of a record vintage this year and strong prices should see a considerable pick-up in growers’ incomes as they recover from the reduced 2003 vintage.

New Zealand’s domestic market is small and offers little opportunity for growth.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Supreme Court: Worksafe Decision On Whittall Pike River Prosecution Unlawful

The question in issue on the appeal was whether WorkSafe New Zealand acted to give effect to an unlawful agreement of this nature when it offered no evidence on charges against Peter William Whittall for breaches of the Health and Safety in Employment Act 1992...

The Supreme Court... has found that the decision to offer no evidence was made under an unlawful agreement to stifle prosecution. It has granted a declaration to that effect. More>>

 

Cullen To Chair: Tax Working Group Terms Of Reference Announced

Finance Minister Grant Robertson and Revenue Minister Stuart Nash today announced the Terms of Reference for the Tax Working Group and that the Group will be chaired by Sir Michael Cullen. More>>

ALSO:

Gordon Campbell: On The New Pike River Agency (And The Air Strike Wing)

Much of the sympathy the public still feels for the families of the Pike River miners has been sustained by the sense that the previous government – let alone the mining company and the processes of receivership and litigation – has never dealt honestly, or fairly, with them. More>>

ALSO:

Not Going Swimmingly: Contractor Cut, New Dates For Christchurch Sports Centre

“As an incoming Minister, I have been conducting a thorough review of progress on the Anchor projects and to learn of a $75 million budget blowout on this project was very disappointing..." More>>

ALSO:

Tertiary: Allowances, Loan Living Costs To Get Boost

“From 1 January, student allowance base rates and the maximum amount students can borrow for living costs will rise by a net $50 a week,” says Education Minister Chris Hipkins... further adjusted from 1 April 2018 in line with any increase in the CPI. More>>

ALSO:

Foreign Affairs: Patrick Gower Interviews Jacinda Ardern

Prime Minister Jacinda Ardern says discussions have already begun on how to bring climate change refugees into New Zealand under a Pacific seasonal employment plan... More>>

ALSO:

Gordon Campbell: On The Centre Right’s Love Of ‘Nanny State’

You’d almost think it was 2005 again. That was a time when the rugged individualists of the centre-right were being beset by government regulations on the nature of light-bulbs, the size of shower heads, the junk food available at school tuck shops and other such essentials... More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election