The New Zealand wine industry is making progress despite the tough economic times according to the June year-end 2011 Annual Report of New Zealand Winegrowers.

‘Three years ago, the New Zealand wine sector was reeling from the combined effects of the 2008 supply shock and the global financial crisis,” says Stuart Smith, chair of New Zealand Winegrowers.

Today excess inventory has been sold through and we have the confidence to take in a record harvest based on anticipated demand.”

Mr Smith says total New Zealand sales (export and domestic market) rose 11 per cent to 221 million litres for the June year end 2011, while export value rose 5 per cent to $1.1 billion.

“These achievements represent real progress against a background of increased uncertainty in the global economy.”

Mr Smith is clear, however, that significant challenges still remain for the sector.

“Profitability is a key concern for wineries and growers, as many still struggle with the legacy effects of the past three years. The wild gyrations of the New Zealand dollar are a major problem for wine exporters, and threaten to de-rail the recovery that we are starting to see.

“Domestically, annual excise increases impact winery financial returns because those increases cannot be passed onto consumers.”

Mr Smith says that in a rapidly changing environment there is a need for a clear path forward for the sector and the industry organisation, New Zealand Winegrowers.

‘For this reason we have commissioned a major independent strategic review of the sector and our own activities. Consultants PWC have been appointed to conduct the review, which we believe represents an exciting opportunity to build on the progress of the industry to date, and to position New Zealand wine for greater success in the future.”