Higher consumer demand for New Zealand wines has continued to put pressure on land space and some producers believe Marlborough will be fully planted in as little as five years.

Yealands Estate in Marlborough

Winemakers and grape growers are running out of space in Marlborough, famous for Sauvignon Blanc and which constitutes around three quarters of New Zealand’s wine production.

Vineyard prices in the region were last year rising at more than 10% year-on-year, according to estate agency Knight Frank.

Demand for vineyard space is being fuelled by rising exports of New Zealand wine, which hit NZ$1.3bn annually last year and could rise to $1.5bn in 2015 buoyed by a record 2014 harvest, according to trade body New Zealand Winegrowers (NZWG).

‘In five to 10 years, Marlborough will be fully planted,’ said Philip Gregan, chief executive of NZWG. ‘It’s something we are going to have to live with,’ he told Decanter.com at a tasting in London.

‘We think it will be sooner than that,’ said Simon Kelly, head of European sales for Yealands, which announced before Christmas that was seeking outside funding to buy more land.

‘There’s not a lot of suitable land left in Marlborough. People are planting on the borders [of the region], but they’re places where they risk getting frost problems.’

Marlborough had around 23,200 hectares of vineyard in 2013. Pernod Ricard’s chief winemaker for Brancott Estate, Patrick Materman, previously estimated the region could accommodate a maximum 26,000ha.

Marlborough is the not the only region set to get more vineyards, according to Gregan. He said there are set to be ‘significant’ plantings in Hawke’s Bay in the next few years.

Hawke’s Bay, which had 5,100ha planted in 2013, saw the second highest vineyard estate price rises in the world on the Knight Frank index, which tracked year-on-year prices up to June 2014. Prices were up by almost 18% on average.

Gregan said that the US on course to become New Zealand’s biggest export market in 2015, ahead of nearby Australia and the UK.

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Written by Chris Mercer