Wine glut over, but will consumers pay more?

· Blog
Oct 23rd, 2012 | By | Category: Blog

Wine glut over, but will consumers pay more?NZ wine lovers drinking beer

Whilst the wine glut is said to be over, will the consumer be willing to pay more for their bottle of wine? Whilst most will be prepared to pay a little extra, I fear most will trade down or away from wine all together.

France, Spain, and Italy have recorded their lowest harvest of fruit in decades, and New Zealand wine also managing to harvest less fruit than previous vintages. New Zealand’s exchange rate may see consumers for to drink imported wine rather than their own. Other consumers will be forced away from wine and start buying beer and spirits.

The wine industry has also been crippled with a rise in excise tax, a higher than usual exchange rate, and consumer confidence at an all time low. This tri-factor dealt a severe blow to an industry already weakened by Marlborough’s poor 2008 massive vintage.

With retail shelf space at a premium, in both boutique and supermarkets, companies will be looking for wines that give them a better gross margin. The wines that return these margins may come from overseas, as our exchange rate continues to rise.

So with the smaller harvest, more New Zealand wine being consumed in China, and higher excise tax, reduced retail outlets, will the New Zealand wine buyer simply have their hand forced to pay more for their wine, or will they simply trade down, buy imported wine, or just switch back to beer and spirits?

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Written by Jayson Bryant

Jayson’s roots in wine began when his father literally dragged him round France and injected his passion into him. From the age of 8 his family took month long holidays in France travelling through all regions and sampling their wine.
UnScrewed has reinvented the concept of wine tasting in New Zealand and along the way found a new and willing audience. In addition to encouraging straightforward wine tasting, Jayson educates viewers about the effects of regional factors (soil, sun, wind) on wine flavours, and how to buy wine.