Aussie market tough for wineries

GRAPE EXPECTATIONS: Hawke's Bay's chardonnays and syrahs should appeal to Australian consumers.

Near parity with the Australian dollar has presented a speed bump for Hawke's Bay wineries trying to gain traction in the Aussie market.

The Kiwi dollar jumped half a cent against the Australian dollar this week, moving above A99c and sparking renewed speculation of parity. The strength of the dollar is putting a strain on exports to Australia for some industries - among them, New Zealand winegrowers.

Hawke's Bay Winegrowers Association chairman Michael Henley said the dollar was a hindrance to breaking further into the Australian market for local wineries.

"Obviously it's not ideal. It does affect everyone's wishes to make Australia a stronger market for Hawke's Bay wine.

"Actually, the US is a more attractive proposition at the moment given the exchange rate. Australia needs to be a very strong market for Hawke's Bay wine - there is an opportunity there."

He said wines produced in Hawke's Bay such as chardonnays and syrahs were drops that should do "relatively well" in Australia.

"There's been very much an infatuation with Marlborough and other regions and it's been a hard slog for Hawke's Bay wineries."

The key to success was educating Australian consumers, and opening their eyes to Hawke's Bay wines.

In the spirit of this approach, eight of the region's wineries will travel to the Game of Rhones wine event in Sydney and Melbourne in June, "in order to spread the word that Hawke's Bay makes some great syrah".

"It actively has to be worked on or it's not going to happen."

Consultant winemaker Rod McDonald said a great harvest was "finishing with a bang" this week.

The kiwi dollar had "taken the fun out of exporting to Australia for now," but his strategy for selling overseas was built for the long-term.

"In a situation like this, as with all export relationships, when the exchange rates moves and the retail price point does not change, someone's margin gets eroded.

"It's always up and down and is not unexpected, but it adds another dimension or strain on a relationship, or at least creates another lever to pull when contemplating future negotiations."

Craggy Range global sales director Warren Adamson said Australia was an important market for the winery.

"At Craggy Range we have always applied a very long-term view to our export strategy which flows into our current exchange rate policy.

"We trade using the currency of the export markets, rather than in New Zealand dollars. This allows us to maintain our price position within the markets no matter what the exchange rate.

"Australia is, and will always remain, a key market for Craggy Range."

Wine is the sixth-biggest export from New Zealand, with the industry hitting a new record for exports last year, earning $1.37 billion, an increase of 8.2 per cent.