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Price-drop fears played down

Published:  23 July, 2008

New Zealand's top winemaking talent has dismissed talk of the price of Sauvignon Blanc being forced down.
The country's wines enjoy the highest average bottle price in the UK off-trade (5.68, MAT to December '05), but this has slipped from above the 6 mark, and there has been speculation that as more and more Kiwi Sauvignon is produced - UK exports leapt 50% last year - there will be an inevitable drop in price.

However, at the annual New Zealand tasting in London, a number of producers dismissed the claims and said that demand for Sauvignon was as high as ever. Neil Culley of Cable Bay Vineyards said: So far, the demand is there. The focus is on quality at the moment. The grape price is holding up, and I can't see any sign of that changing. For a long time, there was never enough wine to allow us to go out and promote new markets; now we're looking at countries like China, which we never would have contemplated before. Our strategy is to have a number of smaller markets, rather than one big market.'

Wither Hills MD Brent Marris admitted he had seen downward pressure' on some of the bigger brands, while smaller companies were feeling the effects of the exchange rate between the NZ dollar and the pound.

But Adrian Atkinson, wine development director for Pernod Ricard, which owns Montana, the UK's biggest-selling New Zealand brand, said he could not envisage a scenario where a clutch of 5 Sauvignon Blancs would grace our supermarket shelves. He said: The bulk price for Sauvignon Blanc for the 2004 vintage was NZ$4/litre; now it's about NZ$6. People are turning wine away because the quality's not right and the price is too high, so we don't see where the pressure is going to come from for the prices to come down.'

He added that the growth in plantings could not be sustained, and that the situation in Marlborough can be likened to Champagne, in that actual space for vineyards is becoming scarce.'

Despite Atkinson's views, Rufus Weston, business manager (grocery) for FGL Wine Estates, which produces Matua Valley, conceded: I'm sure we'll see the day when we see a half-price Sauvignon Blanc.'