Prices rising after lighter vintage

Aug 16, 2012

Marlborough grape growers can expect a pay rise next year as wineries compete to secure fruit for 2013 and beyond.

Mud House, Toi Toi, Yealands Estate and Matua Valley are among wineries advertising for Sauvignon Blanc grapes to supply their growing markets and rebuild stocks after vintage 2012 was down 25 per cent on the previous year.

Yields from the 2012 harvest showed 60,000 tonnes less grapes were harvested than in 2011, equating to 46 million litres less wine to sell, affecting the bottom line of growers and wineries, who will be looking to regain profitability next year.

New Zealand Winegrowers chairman Stuart Smith said bottled exports were steadily increasing, while bulk wine exports had noticeably decreased during the past few months, a trend he expected would continue.

"In the past, wineries may have been making sales that are not profitable or with very low margins, but the shortage has put tension on the supply side of the market, so they will be looking to rebuild those margins," he said.

The lower-priced wine labels would be the ones to miss out if wineries were short on supply, he said.

Toi Toi Wines have advertised for 500 tonnes of Sauvignon Blanc grapes for the 2013 vintage and beyond.

Winemaker and vineyard liaison Chris Young said they were securing fruit for increasing export markets and re-stocking after the shortfall this year.

He had received plenty of interest from growers in response to the advertising, but people were doing their homework before signing contracts, he said.

"The supply and demand has swung back the other way and growers now have the upper hand."

While he did not want to talk about grape prices, he said he expected then to increase to a "more realistic level".

Grower Mike Veal is approaching his 23rd vintage in Marlborough and said it was "a lovely feeling" to have wineries calling again.

"For three or four years no-one wanted to know you, but that's the nature of the market," he said.

"Several growers have rung me, dangling a big carrot of security with a contract, which is everything except the price."

Contracts to supply may be signed, but prices would not be firmed up until January and changed annually depending on flowering, when there was a better idea on what the vintage would deliver, he said.
Wine Brokers New Zealand director George Elworthy said the bulk wine price had risen quickly.

Anything available from 2012 harvest had been snapped up quickly as wineries tried to meet commitments, he said. Prices were sitting about $4 a litre.

PRICES

Marlborough average grape price (per tonne)

2012: NZ Winegrowers estimate $1282
2011: $1172
2010: $1293
2008: $2363
2003: $3300 (last major shortage)