New Zealand wine producers are facing lower profits this year, not only because of the global recession but also because of downward pressure on prices for New Zealand wine on world markets.

New Zealand Winegrowers chair Stuart Smith says the industry has to confront the new reality it is now facing.

“Continued effective management of supply is fundamental to our future success. Equally, investment in marketing will be more important to the industry than ever before.”

However, Mr Smith remains positive about the future.

“While times are challenging at the moment, we have an industry that is united and understands the challenges and opportunities it faces,” he says.

“We have built New Zealand wine into a globally successful brand and that is a sound platform from which to build our future success.”

New Zealand Winegrowers' annual report shows that the New Zealand wine industry grew strongly for the year ending June 2009.

A highlight of the year was the 24 per cent lift in the value of wine exports to $992 million, up $194 million on the previous year.  Export growth was driven by the availability of wine following the record 2008 vintage and strong in-market demand for New Zealand wine in key markets - notably Australia, the UK and the USA.

Domestic sales of New Zealand wine grew 29 per cent to 60 million litres, while the number of wineries in New Zealand lifted by 58 to 643.