New Zealand winemakers challenged to justify high prices

23 January, 2014

Wines of New Zealand boss Philip Gregan has challenged his nation’s winemakers to justify the expensive price tags their bottles command by producing the best wines in the world.

The average bottle of New Zealand wine sells for £7 in the UK off-trade (Nielsen, December 2013) – making it the most expensive country of origin, comfortably ahead of second-placed France, which has an average price of £6.04.

Gregan, the generic body’s global chief executive, told OLN: “Our wines in this market aren’t cheap, so we have got to make sure or wines are of a very high quality.

“That’s something we have done and we can never lose sight of the importance of delivering something very special to consumers.

“So we have got to continue to deliver a very high-quality experience and do it in a very distinctive way.”

Gregan was speaking at Wines of New Zealand’s annual trade tasting in London, where representatives from some 75 wineries poured around 450 wines.

He hailed the quality of the 2013 vintage and said there was a quiet optimism among the winemakers and export managers busy cutting deals in London.

“After the 2012 vintage was quite constrained we lost market share at lower price points,” said Gregan. “That was inevitable. From £8 up and from £6 up we expect to see good growth in the next year.

“We are not a hot climate to produce big volumes. With exchange rates and tax, chasing volume is not a viable proposition. Our focus has to be on quality.

“We had a very good 2013 vintage and sales are going well.

“The UK market is going through a lot of change and it has been for the last three-to-five years.

“Tax increases, exchange rates, the global financial crisis and recession have clearly had a big impact on the market, but we are making good progress in the price points that are of interest to our industry so we are pretty pleased with the UK market at the moment.”

New Zealand produces less than 1% of the world’s wines, but Gregan said there was no danger of looking to sell them elsewhere in the face of the challenges the UK market presents.

“The UK was our first major export market and it was on the back of success in the UK that we started to export to Australia and the US,” he said.

“From a risk management strategy just having one export market was a risky strategy, but now we are strong in the UK, the US, Australia and then Canada. We are looking to develop other markets, like China and Sweden, but the UK is always going to be important to us.

“In its own right it’s a very profitable market at the right price points.

“And the influencers – individuals and publications – in the UK have a reach far beyond this market. The UK – London in particular – is a major centre of global influence.”




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