Long term optimism in wine industry

By Kelly Gregor

Photo / Thinkstock
Photo / Thinkstock

Most New Zealand wineries believe they will be profitable in 10 years' time despite the "tough times ahead", a wine industry survey reveals.

The study, by the Markhams chartered accountancy group, showed the general consensus is that there is still pain to come but many wineries are seeking new export markets and implementing more efficient management strategies.

"There is no question the industry is facing some tough issues and the short-term trading environment ahead will mean there will be some who will have to exit the industry," Markhams national wine spokesperson Sam Bassett said.

"But the majority are digging in for the long-term and are confident profitability will come right in five to 10 years."

More than 500 wineries participated in the survey.

Respondents said last year was more positive in the end than they had expected in January, and 44 per cent believed that trading conditions had improved year-on-year.

Respondents also said that although they expected 2011 to be better, only 50 per cent would be profitable in a year's time.

However, the survey showed there is a jump in confidence for profitability in the mid to longer term, with 64 per cent confident of making a profit in five years' time and 67 per cent confident of making one in 10 years' time.

Scandinavia could be a potential export market for the first time in nine years, which is good news as the NZ dollar has made the US and British markets less competitive for many wineries.

The Rugby World Cup and organic certification on bottles are two areas that were identified as growth opportunities through the survey.

The majority of respondents saw themselves in the industry for the long haul, few were planning to pull out grapes and even fewer were intending to sell their land.

The Markhams survey is conducted twice a year and covers topics such as sales and distribution, capital investment and branding.

- NZ Herald

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