Wine recovery bubbling
The pendulum of grapes is swinging from oversupply to undersupply and the outlook for Marlborough is rosy, wine industry leaders say.
Although there will be further pain for growers until the next vintage, the light at the end of the tunnel is getting brighter.
Saint Clair Family Estate owner Neal Ibbotson said he had noticed the first signs of recovery since the glut of grapes that caused the bulk wine price to drop after the bumper harvest of 2008.
"We are starting to see the first signs of recovery already, the first being the increase of the bulk wine price, and the second are all the advertisements starting to appear from wineries looking for grapes in 2013. We haven't seen those advertisements since the oversupply of 2008."
Before 2008, the average price of bulk wine was $6.50 a litre. Following the 2008 harvest the price fell to under $2 per litre, and recovered to $3 per litre last year, he said.
"We are seeing a huge improvement already in the price of bulk wine, which is currently sitting at about $4.50 per litre.
"The pendulum is swinging from oversupply to undersupply. Already Saint Clair is lifting prices in some markets, where previously we've had to discount."
New Zealand Winegrowers chairman Stuart Smith said there were other subtle signs the industry was improving.
The bulk wine import and export figures for May showed imports of bulk wine increased slightly to cover the shortfall of cheap wine available within the country.
"Ironically, we saw a slight move upwards of bulk wine imported into the New Zealand markets and the export wine figures for May stopped below average, signalling wineries are running out of their supply of wine."
Rumours of an increase in grape prices for the 2013 vintage were already circulating, with one Marlborough winery setting its price 30 per cent higher than 2012, Mr Smith said.
"Everyone in Marlborough should be very happy. If anyone doubted the power and influence of the industry on the region's economy, they only need look back to how the recession hit us much later than other places, on the back to a strong performance following the 2008 vintage."
The situation of oversupply in recent years was a result of the rapidly expanding industry and warmer-than-average weather.
This was unlikely to happen again because no grapes had been planted for many years and wineries had been working hard increasing their markets, he said.
"If mother nature doesn't play ball and we have another cool flowering, we'll have another small vintage. But the good thing about Marlborough is the weather is pretty consistent, it's always a risk, but a risk we all know well and can manage."
Although the positive outlook was something the whole region could look forward to, Wine Marlborough general manager Marcus Pickens said consumers could expect to pay more for a bottle of their favourite wine.
- The Marlborough Express