Wine boom raises spectre of glut

Ideal weather and a good fruit-set indicate an excellent vintage for winemakers, but the industry is concerned about a national glut of of wine grapes in future harvests.

Jon Harrey, of Te Mania Wines, said this summer's settled hot weather had resulted in a good fruit set for Nelson region growers, who last year lost 50 per cent or more of their crop to wet spring weather.

"Last year the weather was shocking, and for November, December and the first half of January we hardly saw a sunny day."

The rain hampered the grapes' self-pollination process.

It was still too early to pinpoint what this year's yields would be, he said, "but from the 'set' we can see we have got a good amount of fruit".

But the industry was cautioning growers about a possible future oversupply.

Industry figures showed that the number of New Zealand wineries had doubled since 1995 and the area under grapes, about 14,000ha, was expected to rise to more than 20,000ha in 2006.

Mr Harrey said the New Zealand industry already had large stocks of wine, some of which would be used to make up shortages from vineyards hit by frost this year.

Nelson growers have so far survived the erratic weather patterns which saw large areas of grapes in Hawkes Bay and Marlborough wiped out in late spring frosts.

"The challenge for the industry is to sell that product, which will take a lot of marketing."

Mr Harrey said strong cautions were being issued about the potential for oversupply in the face of a strengthening New Zealand dollar and a worldwide glut of wine.

Only time would tell when the industry reached a balance of supply and demand.

"It could take two or three years."

New Zealand Winegrowers' deputy chairman Willie Crosse said there was some cause for concern.

An industry survey showed the country had enough land under grapes last winter to meet expected export demands in 2006.

"Anything planted since then is basically surplus."

Winemakers could possibly sell more in the future. Until now they had been restricted by a lack of volume to take to the market.

"We are cautioning winemakers and growers coming into the industry to make sure they do their homework and have markets in place before they start expanding."

Any future oversupply issues were likely to be about variety and quality, rather than across the board. The solution was for the industry to keep producing the world's best wines.

- NZPA