New Zealand Wine Exports Being Driven by Demand From U.S., Asia

Source: New Zealand Winegrowers via Bloomberg

Fairhall Downs Vineyard in Marlborough. Close

Fairhall Downs Vineyard in Marlborough.

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Source: New Zealand Winegrowers via Bloomberg

Fairhall Downs Vineyard in Marlborough.

An increase in the value of New Zealand’s wine exports is being driven by demand from the U.S., Canada and Asia as traditional markets in Australia and the U.K. retrench, according to a report from the country’s winegrowers.

Exports rose 3 percent by value to a record NZ$1.21 billion ($944 million) in the 12 months through June, although dropping 5 percent in volume, New Zealand Winegrowers said in its annual report.

While the value of New Zealand’s wine exports has almost quadrupled since 2004, that period has been marked by volatile production, with the vineyard area almost doubling and jumps in output in years such as 2008 creating oversupply. Growers are now seeking to focus on premium export wines to protect margins.

“The major growth opportunities are outside our traditional markets of the U.K. and Australia,” Steven Green, chairman of New Zealand Winegrowers, said in the report. “To generate volume and value growth, producers will need to navigate complex and sometimes chaotic markets that have not been fully developed up to this point.”

Sales to the U.S. rose 13 percent to NZ$283.7 million and those to Canada increased 10 percent to NZ$78.2 million, according to the report. Exports to China gained 6 percent to NZ$26.9 million, while shipments to Hong Kong climbed 11 percent to NZ$20.5 million and those to Germany surged 25 percent to NZ$9.5 million.

Shipments to the biggest traditional markets in Australia and the U.K. fell 2 percent in value and more in volume over the past year amid pricing pressure.

“The longer-term trend towards market diversification is undeniable,” Green said.

The 2013 vintage produced a record grape crush of 345,000 metric tons, up 28 percent from the previous year’s depleted crop and 5 percent above the 2011 vintage.

To contact the reporter on this story: Guy Collins in London on guycollins@bloomberg.net

To contact the editor responsible for this story: Paul Sillitoe in London on psillitoe@bloomberg.net

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