The cup runneth over

New Zealand wine is in plentiful supply but consumers are saying when.

‘ Beer is made by men, wine by God,” believed Martin Luther. Looking at the challenges facing today’s wine producers, some must be praying for divine intervention.

The 2018 annual report from New Zealand Winegrowers has an upbeat introduction, noting that the value of the country’s wine exports rose for the 23rd year in a row, to $1.7 billion. “We’ve steadily built a reputation for consistent quality; for wine that is approachable and noteworthy; and for a comprehensive commitment to sustainability.”

But the report’s statistics give no scope for complacency. Although wine has a glamorous image, its consumption is declining in New Zealand. During the past decade, our consumption of all wines has dropped from 21.5 litres a head to 19.2 litres. Excluding imports – the sub-$10 category is particularly popular – the drop is even steeper, from 13.9 litres a head in 2009 to 10.9 litres in 2018 – a fall of more than 20%.

In the UK, the largest export market by volume for New Zealand wine, nearly 30% of people aged 16-25 now avoid all alcohol, including wine. The only age group that is drinking more wine is the oldest – those in the 65-plus category.

There are clear signs of a similar pattern in New Zealand. I meet many people in their twenties who either don’t drink at all or only at extremely moderate levels.

In the US, our largest export market for wine in dollar terms, and Canada, Rabobank believes the rise of legalised marijuana poses another threat to winegrowers, because some consumers will view the drug as a substitute for wine.

New Zealand has no more wine producers than six years ago. Two wineries have recently been placed in receivership – Vinoptima, founded by Nick Nobilo in Gisborne, and Mahana, formerly known as Woollaston, one of Nelson’s bestknown producers.

Matt Rutherford, managing director of Spencer Hill winery in Nelson, believes New Zealand is simply making too much wine.

“The sheer volume of wine available, and need to move product through the supply chain to release winery capacity and create cash flow, has driven many producers to constantly lower their prices.

We see casualties, both locally and nationally, and my bet is that we will see many more.”