28 Jul 2010

High dollar hurting recovery prospects - winegrowers

6:45 am on 28 July 2010

New Zealand Winegrowers says the high New Zealand dollar is hurting the country's prospects of an export-led recovery.

Chairman Stuart Smith, who is also president of the New Zealand Grape Growers Council, says exporters, particularly wine and grape producers, are facing extremely tough times.

He says some of that is due to a supply imbalance that the industry is addressing, but he says the strong New Zealand dollar is also eating away at the industry's profitability.

He says the dollar is really strangling the economy.

Mr Smith says monetary policy needs to address the overvalued dollar, to ensure that it does not harm prospects for an export-led recovery.

Industry statistics show that the average price per litre of exported wine was$7.80 in in the 11 months to May, down from $8.84 per litre a year ago.

Wine exports total more than $1 billion, just ahead of kiwifruit.