Wine imports reflected the trend, as the lion's share of the growth was driven by more expensive wines and lower-priced wine imports continued to fall.
New Zealand wine exports followed a steady upward trajectory, as volumes from the 2016 harvest became available to meet demand (particularly from North American markets).
Total export volumes increased by 10% in 2016 and in value by 5% to $NZ1.6billion.
Within that total, bottled wine exports increased by 5%, and value increased by 2.6% to $NZ1.3billion.
Average export prices fell over the past six months, from what were elevated levels, especially to the UK market.
Annual export volumes to the UK market grew by 14% in 2016, however the depreciation of the British pound significantly impacted returns from an important market, which continued to receive over a quarter of New Zealand wine exports.
The UK was a critical export market for nearly every major wine producing country in the world.
In Europe, 20%-25% of all exports in any given year went to the UK market.
After four years of steady consumption declines (from 2011 to 2014), the UK market switched into growth mode.
This growth was sustained for the next two years, and was driven almost exclusively by Prosecco.
Still wines had been declining since 2010, although the rate of decline had slowed notably over the past two years.
Increasing headwinds in the UK market were expected from exchange rates and excise taxes towards the remainder of 2017.
This would likely result in negative consumption trends.
In New Zealand, recent heavy rains across much of the North Island presented some challenges in the major wine-producing regions of Gisborne and Hawkes Bay.
While South Island regions largely avoided that storm front, they had other, less extreme, rainfall events to contend with.
With the Marlborough harvest in full swing by the end of March, the expectation was for lower production than last year, as this would be more in line with long-term average yields.
In Australia, following an unusually wet and slow start to the 2016-17 growing season, the 2017 vintage began to show promise as warmer and more settled weather eventually set in during summer.
In autumn, most production regions praised the quality, as crops benefited from a milder and extended season, and the harvest size still looked set to test last year's level.
Initial estimates from Argentina suggested the incoming 2017 wine grape crop would be about 15 per cent larger than the disastrous 2016 crop.
Despite this, it would still be more than 20% below the average crop size of the previous five years.
At the end of 2016, inventories in Argentina were already 25% below levels of the prior year, and the incoming crop would do little to change that situation.
