By Simon Shepard
Tough times in the wine industry mean drinkers will continue to enjoy a top drop at lower prices.
After two years of recession and over-supply, the 2010 grape harvest has fallen, but there is still too much bulk wine to be soaked up before prices can rise.
The sun shone, the vines produced, now the winemakers say they have the ingredients for an outstanding vintage.
Winegrower Phillip Gregan says “the weather during the vintage in March and April was superb the winemakers were able to pick when they wanted to pick and the outlook is vey exciting for the 2010 wines”.
The industry has been forced to reduce its harvest.
Over-supply for the past 2 years combined with the recession has meant an excess of bulk wine has driven prices down.
“The consumers are getting a fantastic deal on New Zealand wine here at the moment and overseas,” says Mr Gregan.
Sauvignon blanc is still the mainstay of the market, followed by chardonnay and pinot noir, with other varieties making up the difference.
With the industry in recession mode, wineries are concentrating on what they know best - experimenting with new varieties is costly.
Mr Gregan says new markets are difficult to open up for the wine industry as there are no big profits to be had.
Commentator Jayson Bryant predicts the market will improve in two to three years.
"For the lesser brands who have reduced their price considerably then it is gong to be difficult. Once all this excess is soaked up - it is going to be difficult to command the prices they charged before."
In the short term, there are two more hurdles for winemakers, a new excise tax from July plus the GST rise in October.
Wineries say they will have to absorb the extra costs rather than the consumer. But with many struggling to make a profit, the industry will not be surprised to see some more vines ripped out and companies closing.
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