Labour shortage hits Marlborough wine industry

Marlborough vineyards still require some 1200 new hires to have the 3700 workers needed through the months of winter pruning. Photo / File

New Zealand's most valuable winemaking region is short roughly a third of its workforce heading into the labour intensive pruning season. Pruning will start imminently and Marlborough vineyards still require some 1200 new hires to make up the total 3700 workers needed through the winter months.

The figures, generated on April 1, come from NZ Ethical Employers (formerly Master Contractors), an industry group for labour contractors in horticulture and winemaking. Labour contractors supply more than 95 per cent of Marlborough pruning hands.

Chairwoman of the body, Tanya Pouwhare, said the labour situation remains dynamic but she doesn't think the gap can be filled by New Zealanders: "I'd say we won't have the labour unless we get another border exception [for Recognised Seasonal Employer scheme workers]."

Pouwhare said despite the still leafy vines that make cutting difficult, pruning will begin as early as this week in an extraordinary effort to stretch the work across as many months as possible and make the most of the limited workforce. Traditionally pruning runs from June to August.

Pruning must be complete before spring growth on the canes begins, typically in September, and despite the early start there is still a strong likelihood machine pruning will be deployed due to the dearth of workers.

"That's a very poor option. Basically they run a barrel pruner through the vines and it just cuts everything in its path right down to the wire. Essentially, it turns the vines into a hedge," Pouwhare said.

"It creates a much greater risk of pests and diseases. Those vineyards would require a whole new management system and there is a lot of labour required later on to open the canopy up."

Pruning is more labour-intensive than harvesting in the wine industry, where machinery is used extensively to pick the crop.

Philip Gregan, CEO of wine industry advocacy group New Zealand Wine, said the labour shortage and the consequences are "very significant" but it is too early to put a dollar figure on the cost.

"The risk is the serious compromise of next year's crop," he said.

Gregan expects labour shortages in other winegrowing areas including Nelson, Hawke's Bay and Otago. However, he said the situation in Marlborough will be the most acute because it is by far the most extensively cultivated of the growing regions and has a relatively small local population.

Marlborough produces some three-quarters of both New Zealand's wine and its wine export revenue; last year total exports topped $2 billion.

Unemployment in Marlborough sat at just 2.4 per cent in the Stats NZ reading for the December quarter, 2020, well below the national rate of 4.6 per cent - a figure so low that economists generally consider that it represents full employment.

Vineyard wages are higher this year, typically starting at $22.10 per hour, and the Government is offering extra payments to help defray costs like accommodation for New Zealanders who take up the work. Despite that, contractors say persuading Kiwis to relocate to Marlborough, where accommodation is typically limited to shared rooms and facilities, has been an uphill battle.

Widespread labour shortage

Vineyards are among a wide range of primary producers that have suffered from a chronic shortage of labour, especially acute since early harvests began in September. Last month, the apple and pear industry warned the labour shortfall would result in a 14 per cent reduction - worth $95m to $100m - in its exports this year.

Before the pandemic, Immigration NZ anticipated that 14,500 Recognised Seasonal Employer (RSE) scheme workers from the Pacific Islands and some 50,000 backpackers on flexible working holiday visas would help to make up the estimated 40,000 temporary workers needed for harvesting and other work through the current 2020/21 horticulture season.

The wine industry is the latest sector to struggle due to a lack of foreign workers. Photo / 123RF

However, that plan was derailed when the Government closed the border in March, 2020. A rump of fewer than 6000 RSEs who arrived before the border closed last year remain stranded in New Zealand, and fewer than 14,000 backpackers are in the country. In January, the Government allowed just 2000 new RSE workers in, well short of the additional 5000 to 10,000 Horticulture New Zealand said were needed.

Government ministers have said more foreign workers can't be allowed into New Zealand because of the very limited capacity in Managed Isolation and Quarantine (MIQ) facilities at the border.

However, foreign workers hail from essentially Covid-free Pacific Islands, and in the last 10 months horticulture industry bodies have repeatedly tried to advance plans to bring workers to New Zealand outside the logjammed MIQ system. Horticulture New Zealand head Mike Chapman said the industry is also prepared to manage isolation for workers returning to the islands. To date, the Government has rebuffed those plans.

Both National and the Act Party have repeatedly called on the Government to quickly plug the gap in the horticulture sector's workforce by boosting the number of foreign workers and dispensing with quarantine for travellers from Covid-free countries, including Samoa, Tonga and Fiji.