Smaller grape harvest is a relief for some

Vintage 2005 has officially begun and early predictions by New Zealand Winegrowers are that it will be the country's second-largest grape harvest - meaning less wine for domestic and export markets over the next year.

The vintage began in Gisborne late last month and will end in Central Otago and other South Island wine regions in June.

The amount of grapes harvested this year is expected to be between 140,000 and 160,000 tonnes, down from 167,000 tonnes last year. This is despite an increase in the area of land producing grapes - now 20,500ha, up 12 per cent on last year.

The economic implications of this mean that while wineries have spent the last 12 months gearing up for bigger marketing and production and sales plans, mostly internationally, there will be less wine than expected.

Cool December weather is responsible for the lower quantity of grapes, though not for lower quality, says Philip Gregan, chief executive of New Zealand Winegrowers.

Grape grower and Fairhall Downs Estate Winery owner Stuart Smith, from Marlborough, says there has been a strong emphasis on quality this year, notably in his part of the country, the country's largest wine region.

Mr Smith said many grape growers had been willing to take a smaller crop in order to ensure high-quality grapes.

The biggest impact of the smaller harvest would be the reduced quantity of wine available for sale, said Mr Smith.

This could be an advantage for some in the wine industry, he said.

Most investment in the industry had been in the country's ever-expanding vineyards and in the bricks and mortar of the fast growing number of wineries. Now money needed to be spent on marketing the wines being produced.

"This is a less tangible investment, and not something you can go to the bank and get security on, but it is essential."

To date, the industry had been fortunate that global markets wanted the wine which was available, but with present growth rates more defined marketing was needed.

Mr Gregan said two scenarios could affect wineries with a reduced harvest this year.

"If people are overstocked from last vintage, and I'm sure some wineries are, this will probably give them some breathing space," he said. "And for those who have performed well with their supplies, then they will have to stretch out over the next year to meet the demands of the market."

It was imperative for many small New Zealand wineries to make strategic plans for their future sales and marketing.

"Numbers are down a little bit but we're not talking about a halving of production, so this is a different order from previous years when there has been a far greater drop in production.

"This current drop is going to give much-needed breathing space."

The 2006 harvest is predicted to be the biggest-ever crop of grapes, with an expected 180,000 to 200,000 tonnes from a record 22,000ha of vineyards.