Wine industry told glut will hit it hard

New Zealand's wine industry is heading for a fall, according to the man who helped devise the Government's vine-pulling subsidies in the mid-1980s.

After 20 years as an international merchant banker, Martyn Nicholls has returned from London with a warning that the country is entering the global wine glut and will be hit hard.

This follows a warning from Jon Harrey, of Te Mania Wines, published in yesterday's Herald.

But Marlborough winery owner Allan Scott said such "messages of doom and gloom" had been circulating for the past 10 or 15 years and the region's wines had yet to take a hit.

"It is hard to know, but our experience has been that the market for sauvignon blanc is insatiable."

Mr Nicholls, a Marlborough vineyard owner, has just completed the International Wine MBA, a wine industry course run across five universities in five countries.

It gave "an absolutely brilliant view of the whole global industry region by region", Mr Nicholls said. But it has left him pessimistic about the industry.

"To meet the upcoming oversupply we will need to quadruple our exports in the next four or five years in some varieties. I challenge anyone to explain how that is going to happen."

The pain had been postponed in Marlborough this year because at least 20 per cent of Marlborough's grapes were lost to frost, he said.

But by 2006 he expected the region's vineyards to be selling at a fraction of their present price.

While working for the Treasury in the mid-eighties, Mr Nicholls helped design the vine cull subsidies that knocked out a fifth of New Zealand's vineyards.

- NZPA