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Aug 21, 2012

New Zealand Winegrowers, the industry body representing about 1,000 growers and 700 wineries, said annual exports rose by 8% even as the high kiwi dollar reduced profits.

Exports rose to $1.12 billion in the 12 months ended June 30, according to NZ Winegrowers annual report. Sales (export and domestic) increased 10% to a record 242 million litres. International wine sales have increased by 79% since 2007.

New Zealand's overall freight-on-board price per litre fell 7% to $6.58.

Wine is New Zealand 8th biggest export. Globally, New Zealand is the 10th largest exporter of wine by value and the 11th largest for volume. New Zealand is second, behind France in terms of the average price at which wine is sold.

"Profitability is a key concern," chairman Stuart Smith said. "Lower yields this year have restricted grower incomes while for wineries the challenge will be to maintain shelf space and grow key development markets in a time of tight supply."

"Returns have also been impacted by the high New Zealand dollar and domestic tax increases," he said.

Bottle wine continued to make up the bulk of wine exports, with package shipments accounting for about $1 billion of export earnings.

Australia remains New Zealand largest export market, with exports across the Tasman totaling $380 million. Exports to the UK were $284 million, while the US market continued to "perform strongly" on $250 million.

"The UK imports a greater volume of New Zealand wine than Australia but the value is lower due to the weak pound and large proportion of bulk wine exports," Smith said. "Bulk wine has now become the norm for popular premium wine imports for all counties into the UK."

Exports to Canada lifted 20% to $70 million, while China rose 50% to $25 million.