Wine industry nudges vintage down, says quality up

The rise and rise of New Zealand's wine sector has levelled off, with a 2010 vintage totalling 266,000 tonnes, 19,000 tonnes (7 percent) smaller than 2009, and at the lower end of the industry's desired grape intake.

"A reduced harvest was planned for by many growers and wineries as supply imbalances over the past two years, combined with the global recession, have created some real challenges for producers," Winegrowers New Zealand chief executive Philip Gregan said.

Growers and wineries would welcome the smaller vintage because it would help in the re-balancing and recovery of the sector over the next year or so, he said. The vintage represented a step forward for grape growers and wineries as they responded to market challenges.

The Commerce Commission recently sent Winegrowers NZ a letter offering an amnesty for growers who own up to colluding over grape prices and harvest yields, after it received complaints about the way the group advised members to restrict harvests to meet production targets for the 2010 vintage.

A bumper harvest of 285,000 tonnes and a similar crop in 2008 left the industry with an oversupply of wine as the international economic crisis hit, and the commission told NZ Winegrowers that it went beyond reasonable bounds by telling its members to limit the amount of grapes they harvested.

The commission said advice to growers had become progressively more "prescriptive" in recent years and that recently eight tonnes per hectare was proposed as an overall target, with growers asked to reduce their output to keep their output at previous levels.

But NZ Winegrowers chairman Stuart Smith has said growers were only advising growers of ways to help the industry succeed after two bumper harvests flooded the market, and the commission had cleared the group of any wrongdoing.

It is allowed to recommend prices and volume because it is a professional association with more than 50 members, but is not allowed to pressure members to follow its advice.

Ministry of Agriculture and Forestry analysts said this week that big vintages and the impact of global recession in northern hemisphere markets had led to falls in prices for branded NZ wines, and that wineries are selling large volumes of wine into the bulk market to clear inventory.

"The industry has done extremely well to hold volumes through targeted crop management strategies," MAF said in its Situation and Outlook for agriculture and forestry. It said the industry was expected to continue the strategy of managing supply over the next two to three years.

Winegrowers NZ said today the 2010 harvest was lower in most key winegrowing regions after a pre-harvest forecast suggested a grape intake of between 265,000 and 285,000 tonnes from production vines estimated to cover 33,200 ha, up 2000 ha on 2009.

In Marlborough, the vintage fell 5 percent, with production of the signature variety sauvignon blanc 4 percent lower than in 2009. The region has 60 percent of the nation's vineyards, and sauvignon blanc makes up 80 percent of the nation's export sales, by volume.

The Hawke's Bay crop was also down 5 percent, while the harvest in Gisborne was slashed 21 percent from 2009.

Central Otago production was unchanged on 2009, but in Waipara, Canterbury and Northland the harvest was larger this year, and smaller vintages were recorded in Auckland, Waikato, Wairarapa and Nelson.

"Most importantly, this year's vintage quality should be excellent," Mr Gregan said. "Though the harvest was slightly later than last year, wonderful weather in March and April, combined with lower yields ensure superb fruit was delivered to wineries."



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