Watch for wines in cheap bin

By SIMON HENDERY

With an international grape glut looming and strong competition between local wine producers and importers, wine quaffers can expect plenty of bargain bottles of wine on supermarket shelves.

The Wine Institute's chief executive, Philip Gregan, says projections of huge short- to medium-term increases in grape production from several countries - including Australia, the US, and Chile - will inevitably lead to price reductions for lower-priced wines.

What is less clear is how prices of higher-value wine will be affected.

Mr Gregan says that rather than reduce the price of existing brands when grape prices drop and erode hard-earned brand value, wine companies may instead introduce new brands at a cheaper price.

Nevertheless, wine buyers are increasingly getting better value for money, Mr Gregan says.

"There's no doubt that, at all price levels, the quality of wine has increased dramatically and I'm sure that is what has ultimately increased wine sales."

He puts the quality drive down to increased competition.

"We've got 400 wineries in New Zealand and there are 1200 in Australia. Not all of those Australian companies are selling into the New Zealand market, but a lot of them are," he says.

"You have also got many wineries from France, Italy and elsewhere selling here. The market's very competitive. You've got to be good to survive."