Wineries fail as chardonnay regains favour

Fairfax Media

COMEBACK KID: As some New Zealand wineries struggle due to the high dollar and oversupply of sauvignon blanc, there are early signs of a chardonnay resurgence in Australia.

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As several wineries in Marlborough have gone into receivership with more expected to follow due to the high kiwi dollar and oversupply of sauvignon blanc, there are early signs of a chardonnay resurgence in Australia.

Australian winemakers and retailers have started to detect a rebound by chardonnay after years of massive decline in consumption of the once-champion white wine style.

"It's probably very early days, we are not noticing a big bounce in cellar door sales but chardonnay seems to be talked about a little bit more," said Richard Howden, general manager of the Yarra Valley Wine Growers Association.

"We have seen a few more listings on wine lists at restaurants and interest back to chardonnay from some of the wine writers and sommelliers.

"Sauvignon blanc has had its boom, but wine is a fashion industry."

A cool-climate crisp style, the sauvignon blanc proved such a hit at Australian parties, barbecues and social gatherings that national liquor retailer Dan Murphy's found during its Christmas trading period that four of its six biggest-selling wines were Marlborough sauvignon blanc.

Its popularity proved costly to chardonnay with sales at bottle shops collapsing from A$420 million in 2004 to $312m by 2009, while during the same period sales of sauvignon blanc exploded from $54m to $345m.

But the party for sauvignon blanc could finally be starting to wind down. Marlborough has seen several wineries collapse during the last month including Cape Campbell Wines, Awatere Vineyard Estates and Gravitas Wines.

Banks are tightening their lending to New Zealand wineries while at the same time interest bills to existing customers are starting to grow.

Industry executives believe more wineries could soon collapse, as the high New Zealand dollar crimps export earnings and an overplanting of sauvignon blanc forces prices lower.

- © Fairfax NZ News