The amount of New Zealand wine being exported in bulk is lowering demand for premium bottled wine, according to the Ministry of Agriculture and Forestry.
The report, released on Tuesday, looks at issues currently faced by the primary sectors and forecasts trends for the next few years.
MAF director general Murray Sherwin says the amount of New Zealand wine exported in bulk has increased from 4% in recent years to 30% in May this year.
Mr Sherwin says the wine industry risks undercutting the considerable price premium of high quality wines, such as the Marlborough sauvignon blanc brand.
He says the industry needs to address the problem by reducing bulk exports and focusing on developing markets in Asia.