The wine industry risks slipping back into overproduction as one of the driest summers in living memory provides outstanding grape-growing conditions across the country, says an analyst.
This year's vintage is expected to be bigger than the 269,000-tonne harvest in 2012, which was 18 per cent smaller than the 2011 crop and helped to rebalance supply and demand in the sector.
A bumper vintage in 2008, when the country was also being hit by drought, resulted in a 27-million-litre glut that eroded wine, land and grape prices and led to an increase in exports of cheaper bulk wine - product shipped in giant plastic bladders.
Paul Munro, a Deloitte partner who specialises in the wine industry, said this summer's hot, dry weather meant there would be a "pretty strong harvest" and there was a risk of a return to oversupply.
"I think the industry's got to be careful that it doesn't flip-flop back into that sort of supply imbalance and produce too much for the market," Munro said. "It's a fine balance that the industry needs to manage carefully and I think New Zealand Winegrowers are doing a pretty good job in terms of keeping that message top of mind so producers don't attempt to harvest large volumes of product."
