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NZ producers feeling optimistic as 2011 vintage begins

Published:  14 March, 2011

The 2011 New Zealand grape harvest is underway with producers feeling buoyed by a stronger than expected sales performance, however profitability remains an on-going concern.

Philip Gregan New Zealand Winegrowers' chief executive officer, said a warm summer and favourable weather in the last few weeks has ensured many regions are experiencing a slightly earlier vintage with producers having high expectations for quality.

He added industry optimism has also been boosted by the stronger than expected sales performance in the current year. "Our performance in key export markets is encouraging. As a result, we now estimate total sales for June year end 2011 will be 220 million litres compared to earlier forecasts of 205 million litres.

"This new forecast suggests that 2011 sales will exceed production from the 2010 vintage by 30 million litres, meaning lower stock levels for many wineries going into the current harvest. This stock reduction is an important step in rebalancing the sector."

However, Philip Gregan accepts challenges still remain for the industry. "Profitability for both growers and wineries is an on-going concern for all participants in the sector.

"Lower prices and retailer-owned brands have been part of the export growth in the past year.

"As an industry we need to remain focused on recovery of winery and grower profitability as a pre-requisite to sustainable growth."