11 Oct 2012

Global supply drop may favour brand wines

2:01 pm on 11 October 2012

The latest quarterly outlook for the wine industry from Rabobank indicates the balance between global supply and demand is improving.

California is producing a larger grape harvest,while poor grape growing conditions in Europe indicates production there will be well down.

Rabobank senior analyst Marc Soccio says a drop in global supply means winemakers should be able to market their own product rather than have to sell it to retailer-brands.

"What we're seeing in Europe now is that bottlers who have contracts with retailers, for example, for private label supply are struggling to meet their contractual obligations.

"They just can't find the supply at the price they need to supply those contracts, so they're trying to renegotiate contracts."

There was a increase of bulk wine exports from New Zealand as the industry went through a period of over-supply, he says, but now the balance may tip back in favour of branded wine producers.