NZ wine exports hit record high driven by strong US sales
New Zealand's wine export values continue to rise thanks to strong United States demand, reaching $1.66 billion for the year, up 6 per cent on the year before.
While the percentage increase is lower than the average yearly growth of 17 per cent for the last 20 years, the industry was still on track to reach $2b worth of exports by 2020, chairman of New Zealand Winegrowers Steve Green said.
The latest NZ Winegrowers annual report shows to the end of June this year, the US market is worth $517 million, up 12 per cent. New Zealand wine became the third most valuable wine import into the US, behind only France and Italy.
Green forecast next year's export volumes would be "more muted" because of the smaller harvest of 396,000 tonnes, down 9 per cent on 2016, but wineries were confident quality would remain high.
While the US provided the best returns, more litres of wine (74 million) were exported to the United Kingdom for a much smaller return of $389m. Traditionally more bulk wine has been sent into the UK market. Behind the US and the UK came Australia, Canada, the Netherlands and China.
The most exported variety was sauvignon blanc, followed by pinot noir and chardonnay.
The recently passed Geographical Indications (Wine and Spirits) Registration Act would offer improved protection of New Zealand's regional identities. The industry had also launched the sustainable winegrowing New Zealand continuous improvement extension programme to enhance the reputation of wines.
Of a total growing area of 37,129 hectares, sauvignon dominates at 22,085 ha, an increase of 685 ha from the year before. The second most popular variety was pinot noir, with 5653 ha, followed by chardonnay at 3203 ha and pinot gris (2469 ha).
Marlborough is overwhelmingly the largest region with 25,135 ha planted in vines, followed by Hawke's Bay (4694 ha), Central Otago (1896 ha) and Canterbury/Waipara (1425 ha).
The number of wineries was 677; they reached a peak of 703 in 2012.
New Zealanders drank 40 million litres of imported wine during the past year, most of it Australian (29m litres), with the next two most popular French and Chilean.
The November Kaikoura earthquake damaged an estimated 20 per cent of Marlborough's tank capacity, but by harvest time all of the lost capacity had been restored or replaced.
Green said the industry consulted with members on possible changes to export tasting requirements, with responses suggesting a rethink of export requirements was needed.
"We continue to believe more needs to be done in our export legislation to ensure that the same standards apply to every bottle of New Zealand wine, no matter where it is bottled," Green said.
NZ Winegrowers were concerned at the Ministry for Primary Industries' plan to take part of New Zealand Winegrowers' wine export certification service contract in-house.
"We fought hard to retain the status quo, which has served our members well, and are disappointed with the level of industry consultation in MPI's decision making process. If the service changes, we will be seeking guarantees from the government that the current speedy issuance of export eligibility statements will be protected, at no additional cost to members," Green said.
In June the New Zealand Grape Growers Council and the Wine Institute of New Zealand finished as entities, replaced by a unified New Zealand Winegrowers.
New Zealand is now the only major wine producing nation with a single industry body, representing and advocating for the interests of its entire grape and wine industry.
The industry and the Government are working through a Primary Growth Partnership on research into lighter wine production and marketing. Last year retail sales reached $33.5m. The programme runs through to 2021, by which time $16.97m would have been spent on the partnership.
Organic wine production continues to flourish with more than 60 New Zealand wineries now making fully certified organic wines, and more still in the organic conversion process.
Wine is New Zealand's fifth largest goods export.