Bumper harvest and more vines send grape prices tumbling

Spot market prices for wine grapes have plunged from last year's frost-affected high of $3800 a tonne.

Most contract prices have stabilised below last year's average of $2559 a tonne, and the big prices paid on the spot market have slumped as much as 40 per cent.

This year's harvest is up to 90,000 tonnes above last year, and the high dollar has hit exporters.

Most companies are reported to be paying less than $2500 a tonne this year.

Frost in late 2002 resulted in a 76,400-tonne national vintage last year, compared to 120,000 tonnes the previous year.

New Zealand Winegrowers executive officer Philip Gregan said last month that a national vintage of between 150,000 and 170,000 tonnes was likely this year, about a third higher than any previous harvest.

"The area of producing vines is now about 30 per cent higher than in 2002, when the previous vintage record of 118,700 tonnes was achieved."

Marlborough's crop is expected to be as high as 80,000 tonnes this year.

Mr Gregan said grape prices had weakened slightly, and the sport market had "certainly" softened.


Marlborough Winegrowers spokesman Stuart Smith said he doubted people had budgeted on last year's grape price highs and the drop in price was because of a simple supply and demand equation.

"We are not looking at anything serious at all," he said. "What we are looking at is the other side of a fantastic year for growers."

Marlborough Regional Development Trust chief executive Tony Smale said he understood most people had budgeted for between $2200 and $2400 a tonne.

Bankers to whom he had spoken were "very comfortable" with this year's prices, he said.

Retailers would not suffer, because the increased production meant more money would come into Marlborough this year despite the lower prices.

But real estate company Bayley's Marlborough principal, John Hoare, said the lower grape prices could result in the viticulture property market slowing after the frenzy of buying in recent years.

He said smaller growers might use the opportunity to sell out to big companies.

Last year, the spot market for top grade sauvignon blanc peaked at $3800 a tonne.

Grower Peter Yealand received that price, but he says it was a "oncer".

"It was a colossal amount ... I knew it was an unsustainable thing."

- NZPA