Warren Adamson of Craggy Range on NZ vintage

Warren Adamson, market director for New Zealand winery Craggy Range, gives his views on the country's latest vintage report, which shows yields down 18%.

Harpers Gemma McKenna: New Zealand Winegrowers has put a very positive spin on news that the 2012 harvest is down 18% - do you reckon there are any negative consequences?
Warren Adamson: The vintage is smaller but still about the size of 2010 so the impact will be for specific producers and price points. I have heard of some producers being down 30% on 2011. There will be highlights from the vintage for sure and it's still early days but it's looking likely that our top end wines will be pretty limited when we get to the 2012 releases. In an odd way, it make the other single vineyard wines shine more. It's also an indication of the high bar we set for our prestige wines.

GMcK: It seems inevitable that prices will go up, can you hazard a guess by how much?
WA: The 'open market' pricing for purchasing Sauvignon Blanc grapes has been seeing increases over the past months due to the reduced volume. As I mentioned in some cases people were indicating being down 30% so that has to have an impact on the overall price. I sense this will be more at the entry level of the market and maybe some of those wines will be harder to fulfil. It's fair to say that we are not just talking about Sauvignon Blanc here though, the global demand for Pinot Noir is constantly increasing as are other varieties like Merlot and Syrah. The reduced harvest for Pinot Noir and high quality of the fruit will keep those prices up too.

GMcK: Do you reckon UK will be less attractive to New Zealand producers if they can sell at higher prices elsewhere?
WA: Wineries have been looking at their export strategy for some time now due to the currency exchange rates alone, so I can't see this trend changing. We need to make sure we are growing our business profitability but New Zealand wineries, especially Craggy Range, will never turn their back on the UK. It is too important to the export landscape for the wine industry, let alone New Zealand. Having said this, we need everyone to understand that quality comes at a price. We are positioned where we are for a very good reason; it's where we need to be to survive.

GMcK: Overall, what's your impression - big deal or not?
WA: For Craggy Range we are lucky in that we have total control over our vineyards, they are set for high quality/low production. We had budgeted a pretty dramatic drop in volume this year but have been pleasantly surprised by the final numbers; down but not too bad. In the case of our negociant business, non-Craggy Range, we managed to secure enough Sauvignon Blanc but Pinot Noir is proving to be a constant challenge. That's going to be fun next year but if it wasn't for nature, it would be a simple game to play.

• Cost Controls
• Harpers Says...
• Currency & Finance