The Country
  • The Country home
  • Latest news
  • Audio & podcasts
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Rural business
  • Rural technology
  • Rural life
  • Listen on iHeart radio

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • Coast & Country News
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Horticulture
  • Animal health
  • Rural business
  • Rural technology
  • Rural life

Media

  • Podcasts
  • Video

Weather

  • Kaitaia
  • Whāngarei
  • Dargaville
  • Auckland
  • Thames
  • Tauranga
  • Hamilton
  • Whakatāne
  • Rotorua
  • Tokoroa
  • Te Kuiti
  • Taumurunui
  • Taupō
  • Gisborne
  • New Plymouth
  • Napier
  • Hastings
  • Dannevirke
  • Whanganui
  • Palmerston North
  • Levin
  • Paraparaumu
  • Masterton
  • Wellington
  • Motueka
  • Nelson
  • Blenheim
  • Westport
  • Reefton
  • Kaikōura
  • Greymouth
  • Hokitika
  • Christchurch
  • Ashburton
  • Timaru
  • Wānaka
  • Oamaru
  • Queenstown
  • Dunedin
  • Gore
  • Invercargill

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / The Country

Wine industry hits sour note

By Anna Rushworth
Herald on Sunday·
21 Aug, 2010 05:30 PM3 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save
    Share this article
Photo / Sarah Ivey

Photo / Sarah Ivey

The perfect storm is rattling New Zealand's wine industry, once regarded as an agricultural cash cow.

Latest figures from Realestate.co.nz reveal 96 vineyards are currently for sale, with the average selling time being nine months.

But real estate agents estimate the figure could be closer to 150.

Consecutive years of
frosts in early 2000 led to lower harvests but with higher demand and top prices for sauvignon blanc grapes.

But the bubble burst in 2008 when the huge proliferation of vineyards and great weather meant a huge glut of wine, and prices tumbled.

The recession hit at the same time, wreaking havoc on growers who had borrowed heavily from banks to set up.

Hardest hit has been the Marlborough region, famous for the popular sauvignon blanc grapes and the original home of giant producer Montana.

Several vineyards went into receivership before being put on the market at mortgagee auction.

Awatere Vineyard estates, bought by Auckland businessman Barry Sutton in 2003 for $3million, has debts of $24m.

Another to fall is Gravitas Vineyard, owned by former merchant banker and Treasury staffer Martyn Nicholls.

Set up costs for a vineyard are about $45,000/ha.

The collapse of Gravitas is ironic. In the mid-80s, when working for Treasury, Nicholls was involved in planning the vine cull subsidies that knocked out a fifth of New Zealand's vineyards. He later predicted that by 2006 there would be a glut of sauvignon blanc on the market.

Marlborough-based Bayleys real estate agent John Hoare said the wine industry was paying the price for the record harvest of 2008 that resulted in a market glut.

"In hindsight it was a mistake that the New Zealand wine companies made." He said 21,000ha of vines were planted in Marlborough, not all on the most suitable land.

As wine prices fell, so did the price of land, Hoare said. Once a hectare of vineyard was worth about $250,000; now it is $150,000.

Bayleys has about 50 vineyards on their books to sell but not a lot of buyers.

NZ Wines chief executive Philip Gregan described the industry slump as the "perfect storm".

Gregan said a series of frosts between 2003 and 2007 forced the price of grapes up to around $2400 a tonne due to the reduced harvest.

"That then raised an expectation and some people based their business models around a certain price for grapes."

By 2008 there was a glut of grapes on the market and a record 285,000 tonnes were crushed. The glut gave large wineries the power to reduce their tonnage price.

However, the recession kicked in, leading to banks putting pressure on vineyards who had borrowed millions in set-up costs.

Bayleys agent Trevor MacKay is trying to sell four vineyards in the Otago pinot noir region; two of them have been on his books for the past four years.

Unlike the more recent troubles in Marlborough, MacKay said the Otago region had started struggling six or seven years ago.

"They're just hurting too much with too much debt and just not making enough."

MacKay said the price of a vineyard by the hectare used to be around $200-250,000 in Otago. Now he has vineyards that could sell for as little as $40-60,000 a hectare.

Discover more

New Zealand

Ardent as ever even after bubble bursts

21 Aug 05:30 PM
Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save
    Share this article

Latest from The Country

The Country

Ranking the banks with Federated Farmers on The Country

The Country

'Fait accompli': NorthTec staff fear cuts as Te Pūkenga restructuring continues

The Country

Northland shearer Toa Henderson wins big at Royal Welsh Show


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from The Country

Ranking the banks with Federated Farmers on The Country
The Country

Ranking the banks with Federated Farmers on The Country

Mark Hooper, Rhys Gardner, Craig Hickman, Duncan Humm, Chris Russell, and Jeremy Rookes.

24 Jul 01:39 AM
'Fait accompli': NorthTec staff fear cuts as Te Pūkenga restructuring continues
The Country

'Fait accompli': NorthTec staff fear cuts as Te Pūkenga restructuring continues

23 Jul 11:47 PM
Northland shearer Toa Henderson wins big at Royal Welsh Show
The Country

Northland shearer Toa Henderson wins big at Royal Welsh Show

23 Jul 11:39 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP