South Americans form double threat on wine

New Zealand wine producers can expect tough competition from South American growers as they improve the quality of their wines, a visiting trade expert says.

William Wattie, New Zealand's trade commissioner to Brazil, said in a stable world market for premium wines, the effect of Chile and Argentina producing more and better wine was clear.

"It's inevitable that in a market with limited growth that they are going to eventually start squeezing us," he said.

Argentina is now the world's fifth largest wine producer with 26,000 vineyards covering 280,000ha. That compares to 463 vineyards in New Zealand covering almost 20,000ha.

Between 1990 and 2003, Argentina's fine wine exports increased from five million litres to 80 million litres.

Argentina and Chile also have ideal growing conditions and low production costs. Since 1990, Chile has increased wine production by 60 per cent to become one of the largest exporters in the world. Wattie said New Zealand needed to "look again" at ways to innovate and to find and develop new markets.

There were also emerging threats from South America in horticulture, aquaculture and forestry.

- NZPA

Puma Patch

* Argentina is the world's fifth largest wine producer.
* It has 26,000 vineyards covering 280,000ha.
* Between 1990 and 2003, wine exports increased from five million litres to 80 million litres.
* Ideal growing conditions are coupled with low production costs.