In an email to members in mid-October, New Zealand Winegrowers Chief Executive Philip Gregan noted the wider context of high inflation, high interest rates, and economic uncertainty in key markets. “Wineries are unsure how this is going to impact demand.”
Exports for July, August and September 2023 were below the corresponding months last year, and export volume for the first quarter slipped 21% on 2022, with most markets and most varieties implicated in the decline. July and August export values (per litre) were up on last year.
Philip noted that Vintage 2023 was New Zealand’s second largest vintage, and hard to compare with other recent seasons, each of which had “special features”, from the Covid-related demand boost in 2020, to the very small harvest in 2021, followed by “exceptional demand” for 2022 wines to refill pipelines.
While exports are currently tracking well below 2022, shipments month by month are in line with pre-Covid times, he adds. “Our assessment is that, in part at least, shipments this year have been constrained by the fuller supply chain consequent on vintage 2022. What is much less clear is whether the slower shipments also represent any reduced in-market demand. Given our incomplete data sets we do not have a clear view on current in-market sales, so the jury is still out on that question. The data we have, and mixed anecdotal reports from wineries, likely reflects current market uncertainty.”
Lawson’s Dry Hills General Manager Sion Barnsley says companies are facing tough times. “I am very nervous about the headwinds coming our way over the next 12-18 months, adding to the current slowdown. Hopefully, the pessimism in me is proven wrong.”
