New Zealand Winegrowers chief executive Philip Gregan says a 19% drop in the tonnage of sauvignon blanc grapes produced this year is good for the wine industry.
The organisation's annual survey puts the 2012 harvest of the variety at 181,000 tonnes, a reduction of 43,000 tonnes compared to last year.
Mr Gregan says many people in the wine industry will welcome the drop in sauvignon blanc production.
He says the supply imbalance that the industry has struggled with in the past few years has now disappeared.
However, Mr Gregan says there may be concern about reduced red wine production, with a 3% drop in the tonnage of cabernet sauvignon grapes, a 25% downturn in the pinot noir harvest and a 12% drop in merlot.
He says the reduction will have an impact on the industry's ability to grow in markets which are taking this New Zealand red wine, such as China.
But Mr Gregan says it's hoped that the low production is for this year only and that production levels will bounce back next year and help growth.