16 Jun 2010

Tough times for grape growers

9:05 am on 16 June 2010

The national wine industry body is expecting more vineyards and wineries to face financial difficulties as the full force of the credit crunch hits the industry.

Over the past week a Marlborough-based vineyard has been put into receivership and the future of a Hawke's Bay hangs in the balance with creditors claiming they're owed hundreds of thousands of dollars.

Grape grower Oyster Bay Marlborough Vineyards has warned it would lose $900,000 this financial year because of low grape prices.

New Zealand Winegrowers chief executive Philip Gregan says conditions in the industry are the toughest they've been for at least two decades.

He says growers are struggling to cope with a loss of contracts and a significant fall in grape prices in an over-supplied world market.

While the banks are being very understanding and lenient with struggling vineyard owners, he says, there will inevitably be financial failures.

He expects these tough times to linger for at least another 18 months.

Prices down to 'historic lows'

Mike Spratt, owner of Destiny Bay vineyard and president of the Waiheke Wine Growers Association, says prices achieved for New Zealand wine have fallen to historic lows.

Sauvignon blanc grapes in Marlborough fetched upwards of $3000 a tonne in 2003, he says, whereas growers are now lucky to get contracts of between $600 to $1000 a tonne.

However, an international wine consultant from the Marlborough region, Matt Thomson, says sales of grapes are up a quarter for the second year running, which has finally evened out supply and demand.

He says the rock-bottom price for grapes is likely to be the 2010 vintage, but there are signs growers can look forward to an improved price for 2011.

Mr Thomson says banks are taking a long-term and responsible view of credit lending.