New Zealand wine exports see significant drop

If there’s one country whose wine sales have been untouchable in recent years it’s New Zealand. However, exports declined by 22% in the last half of 2023, kickstarting a “rollercoaster ride” for Kiwi winemakers, says new report.

Between July 2023 and January 2024, New Zealand wine exports dropped by 24% volume and 22% value, reveals the latest annual report by New Zealand Winegrowers.

For any other country right now these figures, while hardly cause to jump for joy, would neither be entirely shocking given the current state of global wine consumption. But for New Zealand, which has so far proved itself to be more or less immune to changing consumer habits, it will no doubt have come as a slap in the face.

By June 2024 exports had recovered slightly, growing by 6%. But has the impenetrable shield of New Zealand winemakers been dented?

Undermined profitability

Overall to the year ending June 2024, New Zealand wine exports were down 11% compared with the previous year, which New Zealand Winegrowers has attributed to “reduced replenishment orders from importers, distributors and retailers”. Compounding the sliding numbers is the fact that vintage 2024 looks likely to be a small harvest (only 395,000 tonnes of grapes crushed compared with 501,000 tonnes in 2023), and the report predicts that many New Zealand wineries will need to “draw down on any inventory they may have carried over from previous vintages to support both international and domestic sales.”

According to New Zealand Winegrowers chair Clive Jones, consecutive excise hikes imposed by New Zealand government two years in a row have been “galling” for wine producers, and he points out that “wineries now face a 47% increase in the Alcohol Health Levy”, which has “undermined profitability”. An independent review of the levy, released in March 2024, details that it must be used for a specific purpose – “to enable the Ministry of Health to recover costs it incurs in addressing alcohol-related harm and in its other alcohol-related activities.”

Jones said he is requesting “greater transparency in the spending of this health levy” and emphasised that while New Zealand Winegrowers “welcome any reduction in harmful consumption” it must be done in an “evidence-based way”.

Plantings continue to grow

Despite these dispiriting findings, it’s worth highlighting that the 276.2 million litres of New Zealand wine exported during the financial year of 2023-2024 generated an impressive $2.1 billion, and plantings in New Zealand continue to grow, with the nation now home to a 42,519ha vineyard (up from 41,991 in 2023).

Sauvignon Blanc maintains its position at the very top of the New Zealand wine tree, accounting for 28,109 planted hectares. When sized up against the country’s second most popular variety, Pinot Noir, (5,613ha), Sauvignon remains strides ahead.

The US, UK and Australia are the top three export markets by both volume and value for New Zealand wine, but each of these bought less New Zealand wine this year compared with last.

New Zealand wine producers did see growth in some markets, including Singapore, Finland, Ireland and The Netherlands.

 

 

 

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