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US thirst for Marlborough Sauvignon fuels NZ wine exports

Rising sales of Marlborough Sauvignon Blanc in the US have made the country the most lucrative market for New Zealand wine, overtaking Australia.

Total exports of New Zealand wine rose 7% to reach NZ$1.42bn in the 12 months ending 30 June, fuelled by Marlborough Sauvignon Blanc sales to the US, according to the 2015 Annual Report of New Zealand Winegrowers.

US and UK demand rises

Exports to the US and the UK both posted strong increases, up 13% and 11% to NZ$372.2m and NZ$353.9m respectively – but shipments to Australia fell 5% to NZ$362.2m.

The changes mean that New Zealand’s three main markets now each account for about 25% of total exports.

Exports to the US have been driven by Marlborough Sauvignon Blanc, alongside other styles such as Chardonnay, Pinot Noir and red blends from Hawke’s Bay, and are especially strong on the west coast.

Small 2015 harvest

However, the small 2015 harvest is likely to hit exports over the next year, New Zealand Winegrowers chair Steve Green warned.

‘Export volume growth will be constrained in the year ahead, and wineries will draw down on vintage 2014 inventory to meet demand,’ he said.

‘With the supply of 2015 wines tight, wineries will be seeking value growth, rather than volume growth, over 2015/16.’

New vineyards

Some 700 hectares of new vines are expected to come on stream in the next two years to try to meet future demand.

Bulk wine prices, which fell after 2014’s bumper crop, are already rising again, leading to likely price increases for cheaper wines over the coming months.

Sauvignon Blanc dominates

Sauvignon Blanc continues to dominate the export picture, accounting for 86.5% of international volumes, and bulk wine exports are rising fast – up 34% over the year, compared to a 2% increase for bottled wines.

Beyond New Zealand’s big three markets, both Canada and the Netherlands posted strong increases, up 20% and 24% respectively, while exports to China were up 9%.

However, shipments to Germany slumped, falling 31% in value terms to just NZ$10m.

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