Expert warns wine industry to control supply level

New Zealand has a reputation for producing distinctive sauvignon blanc, and increasingly, pinot noir. Photo / Supplied

The head of Australia's Wine Research Institute says New Zealand winemakers are on the right track technologically, but need to manage their growth.

Professor Sakkie Pretorius addressed the annual Romeo Bragato wine technology conference in Napier at the weekend.

The theme of the conference was Where to from here? as the New Zealand sector faces the issue of oversupply for the first time in its history.

Pretorius said he agreed with industry body New Zealand Winegrowers' strategy of keeping a lid on production to preserve our product's premium status.

New Zealand suffered from a surplus grape supply in 2008, with criticism that excess inferior quality wine had made it to market and depressed prices. As a result the industry reined itself in during the latest season and managed to keep the 2009 harvest to 285,000 tonnes, the same as last year.

But problems from oversupply continue - website decanter.com reported last week that Marlborough sauvignon blanc is available in the UK for the first time at £3.99 ($9.72).

David Cox, European director for New Zealand Winegrowers, told the website that the oversupply issue should be resolved by next year, and that price level was an aberration. "I don't think the consumer will ever get to the stage where they think they can get New Zealand wine for under £4."

Pretorius said there had been huge growth in wine supply worldwide over a short period, and between 15 and 20 per cent of global production each year did not have a ready market.

Technically New Zealand and Australia were up with the play. "The skills base and expertise in these two industries are at such a high level that the smartest technologies are being applied and the quality assurance systems are in place."

However, New Zealand was right to step back and consider whether its growth was running at the same level as expansion of its export markets.

This country was seen as exotic because of its distinct style of sauvignon blanc, and increasingly, pinot noir.

"We should not be driven by growth, we should be driven by how much the market wants from us so that we keep that point of differentiation."