23 Oct 2009

Grape volumes and bulk sales seen as millstone for wine industry

11:42 am on 23 October 2009

An oversupply of grapes and sales of bulk wine are seen as a millstone around the neck of the New Zealand wine industry by the New Zealand Wine Company.

Chairman Alton Jamieson says they are distorting the market and make it hard to predict earnings for the 2010 year with any degree of confidence.

The company says oversupply of bulk wine makes it hard to predict how it will fare this financial year.

Profit fell 37% to $1.2 million in the June year.

Mr Jamieson says meeting global demand for New Zealand wine and selling bottled wine at budgeted levels this year, will continue to be a challenge.

He says 94% of the company's budgeted export sales revenue is protected by forward foreign exchange cover at favourable rates, and sales volumes are picked to increase to 210,000 cases.

Directors plan to grow the scale of the business to sell a minimum of 500,000 cases annually.