Neighboring Australia is letting its grapes rot on the vines and in the fields to combat an oversupply from further depressing prices in its wine industry.
But, in New Zealand some growers are bragging about a bumper harvest.
Marlborough, the industry giant that produces Grove Mill and Sanctuary wines, has reported increased after-tax profits as a result of a good harvest and the dropping value of the New Zealand dollar which helps export business, according to company CEO Rob White (seen here).
"The 2006 harvest is considerably up on the 2005 harvest and we are very comfortable with the quality. A bigger harvest produces better economies because it lowers our cost structure," White said.
The forecast was based on a continued decline in the Kiwi dollar, which had helped export sales. But while export prospects were brighter – the company exports 64 per cent of production with sales strong in the U.S. – prices at home were under pressure.
"It's quite brutal. There's increased competition out of Australia ... . There's a lot more pressure from retailers in terms of price and supplier margins. We are seeing prices squeezed."
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