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Demand for New Zealand wine continues to grow

International demand for New Zealand wine saw exports rise by 9% to NZ$599m in the first quarter of the new export year, from July until September 2021, according to the most recent data from the trade body New Zealand Winegrowers (NZW).

A higher price per litre saw the average value of export wines rise by 4% compared to the same period last year, but NZW emphasised that managing restricted supplies was a key issue for wineries.

‘The ongoing demand for New Zealand wine has proven that the distinctive flavours, quality and sustainability of our wines increasingly resonate with consumers around the world,’ said Philip Gregan, CEO of NZW.

Exports of New Zealand wine fell by 3% in volume year to date because the 2021 harvest was considerably smaller. A total of 370,000 tonnes of grapes were harvested for the vintage, which represents a 19% fall on the 2020 crop.

‘Successfully managing the market impacts of the resulting supply constraints is a key focus for many in the New Zealand wine industry,’ said Gregan. ‘Wineries are having to make tough decisions over who they can supply in their key markets.’

Higher production costs, the ongoing economic impact of Covid and strained supply chains were affecting growers and wineries, NZW said.

It was also concerned about a predicted labour shortage and the unavailability of skilled workers to meet critical seasonal work peaks due to New Zealand’s closed borders.

‘The recent decision to allow quarantine free travel for RSE workers is positive, and we continue to work with government to ensure that they are aware of the impact labour shortages will have on our members if they are not able to attract the workforce they need,’ Gregan said.

NZW also stated that wine businesses that sell mainly through the hospitality and tourism sector have been hammered by the impact of Covid restrictions and the dearth of international tourism.

Covid has also significantly disrupted the supply chain and increased shipping concerns, Decanter reports.

‘Like every industry dependent on sea-freight, the ability for New Zealand wineries to ship products to market has been greatly impacted, as transport costs more than double and shipping reliability plunges,’ said Gregan. ‘Unfortunately, this is a worldwide problem without any quick fix.’

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