WELLINGTON: As the value of New Zealand wine exports has grown by 7% to reach a record $1.42 billion this year, expansion in the United States market is playing a big part, New Zealand Winegrowers say.
”This pushed wine to become New Zealand’s sixth-largest export good by value,” winegrowers chairman Steve Green said in the association’s annual report. The US had overtaken Australia to become New Zealand wine’s largest export market by value.
Now valued at $372 million, up 13%, the US market accounted for about one quarter of wine exports in the 12 months ending in June. Exports to the UK also grew by more than 10%. ”We continue to see significant potential for growth in North America, while China continues to represent a long-term market opportunity.”
Further growth was expected as the industry aimed for $2 billion of exports in 2020, he said. The export value of New Zealand wine had grown by nearly a factor of six in the past 13 years. ”We expect further growth in export value in the year ahead, but volume growth will be constrained due to the smaller 2015 harvest.”
This meant growers’ income would be down and wineries would have to draw down on vintage 2014 inventory to meet demand, he said. ”Going into vintage 2016, winery inventories are likely to be at least as low as those going into vintage 2014.”
The global market for wine was an ”unforgiving one” as powerful wine buyers sought plentiful product at even lower prices. Those conditions, plus a relatively static global area under vines, suggested that downward global-price pressure for commodity wine would continue, he said.
”Against the background of this ”race to the bottom”, New Zealand wine must maintain focus on enhancing its reputation as a distinctive, quality product.” Its reputation was its greatest asset and underlay the high average price per litre New Zealand wine commanded in global trade, second only to that of French wine, Mr Green said.
In the past two years there had been a strong trend towards new plantings and an increase in 700ha of producing area was forecast during the next two years. ”We see these plantings continuing as strong sales in growth markets will fuel demand for increased production of key export styles.”
