Designing the future New Zealand Winegrowers
In late 2022 the New Zealand Winegrowers Board appointed a Governance Review Working Group to conduct a review of NZW governance, representation, and the design of the commodity levies that fund NZW.
In export markets, 2014 ended with positive signs in many markets. Looking ahead it almost seems certain that 2015 will be the year in which the USA becomes the single largest export market for our wine. Export value to USA rose over $50 million in the past year. A similar performance in the year ahead would push USA exports up to $400 million, and with Canada exports also growing strongly, this would mean North American exports will come very close to $500 million. This growth reflects continuing strong demand for our wines in these markets plus the benefits of a slightly weaker New Zealand currency compared with the $US.
On the other hand, exports to Australia are under some real currency pressure at the moment. As has been noted in the media in recent weeks, the $NZ is at post-float highs against the Australian dollar, with some pundits predicting currency parity in the year ahead. The high dollar will be affecting returns to wineries in what has been our most valuable wine market since 2008. Let's hope the forecasts of parity are off the mark!
There were a couple of other interesting developments in export markets in 2014 that portend well for 2015. To the UK, export value rose 19% to over $330 million, a record level, while in market prices were firm with New Zealand still having, by a very comfortable margin, the highest average price in that market. In China growth has returned to the market with export value up over 20% in the most recent 12 months, a solid turnaround from a decline of over 30% in the previous year.
Domestically sales of New Zealand wine in our home market lifted in 2014 on the back of increased supply from the 2014 vintage. With the New Zealand economy still performing well there are clearly some opportunities here at home, but as always wineries will be wary of inflation-indexed excise increases and other regulatory impositions that governments dream up from time to time.
On the policy front, 2015 looks set to be an important year. Customs is working on a Customs and Excise review, while we are hopeful that there will finally be some movement on GIs and improved bulk wine controls. The long awaited TPP negotiations may come to a conclusion, but just how important that may be will entirely depend on the deal New Zealand has been able to extract from the USA, Canada, Japan and the other negotiating nations.
Vintage, of course, is now not that far away. 2014 was, of course, marked by the record harvest of 445,000 tonnes of grapes. All the signs to date are that the harvest will be down on that level, but as I keep telling the journalists who enquire about vintage progress at this time of the year, there is a long, long way to go before 2015 is safely housed in wineries. May the recent warm weather continue!
Finally, and perhaps most importantly, 2015 will be the year the industry makes a final decision about the future shape of the organisation that represents it.
As members will be well aware, NZ Winegrowers consulted with growers and wineries post-Bragato on future structure and governance options for the organisation. Following feedback from members, at its December meeting the Board decided on a final proposal to be placed before members.
The final proposal that has been agreed by the Board to put to members contains a number of significant changes to the options presented to growers and wineries in 2014.
These changes reflect the Boards consideration of the feedback from members. We are confident the final proposal represents a positive synthesis of the comments received from members.
However, the final decision on the proposal is one for members, not the Board, to make. To that end, votes will be held among growers and wineries (post-vintage) on the proposal. The votes for growers and wineries will be held separately and will be conducted on the same basis as the six yearly levy votes.
That means for the proposal to succeed, it will need to be supported by both a majority of members (who vote) and a majority of the levies paid by voting members.
So watch out for details about the structure and governance proposal. Your vote will decide the future shape of your organisation, so make sure you understand the proposal details and then exercise your democratic right by voting!
All the best for vintage 2015 and what promises to be a most interesting year ahead.
