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New Zealand exports on the rise

Published:  01 September, 2023

After three testing years due to Covid-19, New Zealand wine exports achieved their largest-ever one-year growth, with an increase of 23% in value to NZ$2.4 billion, according to the New Zealand Winegrowers Annual Report.

Value growth outpaced volume which suggests consumers are prepared to pay the higher prices New Zealand wines command. 

The report also highlights the positive impact of open borders, which have seen wineries welcome the return of overseas tourists to cellar doors, and broaden the availability of seasonal workers.

However, tempering this renewed confidence was the impact of Cyclone Gabrielle, the ongoing challenges from climate change and significant inflationary pressures over the past 18 months.

The strong performance in exports in the last 12 months has made New Zealand the world’s sixth-largest exporter of wine (by value) despite producing less than 2% of global supply.

New Zealand is now arguably the most export-focused wine region in the world with close to 90% of sales occurring outside its home market. In the last 12 months, New Zealand’s export market grew by NZ$450 million, courtesy of its flagship grape Sauvignon Blanc, which accounted for 27,084ha in 2023 – the second most planted grape is Pinot Noir with 5,678ha.

This growth was led by sales into the US, which jumped 25% to NZ$870 million, with the hope that further growth may lead the US to become a billion-dollar market in its own right.

With regard to the UK, the report highlights the positive impact the NZ/UK Free Trade Agreement (FTA) might make in the next 12 months. The move, which was first announced in 2020, was lauded as one of the first post-Brexit trade victories for the UK. In early 2024, the NZ/EU FTA will also come into place in a further boost for New Zealand exports.

The UK is New Zealand’s second-largest market with 79,494 litres exported in 2023 generating NZ$ 537 million, an increase of more than NZ$100m. However, the report expressed concerns about changes to alcohol taxation, which might negatively impact consumer decision-making.

Despite widespread export growth, the overall production from the 2023 vintage was down 6% on 2022. 

Many producers in the North Island regions were hit hard by Cyclone Gabrielle – crops were lost and, in some cases, vineyards were completely destroyed. 

Production in Gisborne was down by 43%, while in Hawke’s Bay a better fruit set than the previous year helped offset the losses caused by poor weather.

Up to 800ha of vineyards lost at least some, or all, of their fruit. In addition, another 300ha of vineyards experienced significant infrastructure damage on top of the crop loss.

Combined, Hawke’s Bay and Gisborne Winegrowers received donations totalling more than NZ$400,000 to support affected grape growers and wineries.