By Andrew Starke

The 2010 year has been the most challenging faced by The New Zealand Wine Company Limited (NZWC) in two decades as the New Zealand wine industry faces a number of ongoing problems.

Reporting its results earlier this week, the producer of brands such as Grove Mill, Sanctuary, Frog Haven, Blackbirch and Lansdown said it would declare a loss of NZ$1.898 million (A$1.5 million) for the year to June 30.

The company attributed the loss to a ‘perfect storm’ created by the oversupply of wine from vintage 2008 and 2009, the Global Financial Crisis and the strength of the New Zealand dollar.

NZWC CEO, Rob White, said the company’s goal was to work through this difficult period for the New Zealand wine industry and come out in a stronger position to compete effectively in the global market.

“We will continue to position the company as a producer of premium NZ branded wines with an overriding focus of delivering quality in the bottle, with our key point of difference being built on excellent environmentally sustainable and quality programmes,” he said.

“We intend to maintain a disciplined approach to control our 2011 grape harvest. It is important for the reputation of Brand NZ and in particular, Brand Marlborough, that this is an industry wide approach.”

The New Zealand bulk wine surplus peaked at 43 million litres in 2009 and sales rose from 20 percent of total New Zealand export sales volume in the June 2009 financial year to 27 percent in the June 2010 financial year, which is severely testing the financial sustainability of the wine industry.

“NZ’s Bulk wine surplus created opportunities for substantial global competitors to bottle NZ wine and create new labels with no history or brand equity that have significantly undercut the branded wine export prices of NZ wine companies,” said NZWC chairman, Alton Jamieson.

“The only financially sustainable solution for the NZ wine industry is to rebalance the supply of grapes harvested with the sales demand for NZ branded wine.”

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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