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Wine prices slashed amid oversupply

Published: 7:34PM Thursday February 12, 2009 Source: ONE News

It's a good time for wine drinkers to stock up their cellars as an oversupply of Sauvignon Blanc forces producers to slash prices.

The average price of a bottle is down by a third on last year, with some brands discounted even further.

Quality Marlborough Sauvignon Blanc is now a whole lot cheaper.

A bumper harvest last year means there's now an oversupply of wine, leaving winemakers with a 2008 hangover.

"There has been so much development in the industry, especially in Marlborough, that it was inevitable it was going to catch up with supply and demand," says Blair Gibbs, of Wine Marlborough.

The oversupply coupled with weakening international demand is forcing winemakers to slash prices, some quality bottles going for half the price they were last year.

"This is wine that in other years when the vintage wasn't as high yielding would have gone into the winery's own label and sold at top quality, top price under their corporate label. With the excess juice, we are able to buy that juice in bulk and put it into our own labels and sell it at greatly reduced pricing," says Simon Templeton, Mill Liquorsave buyer.

The increasing cost of producing Sauvignon Blanc is making winegrowers in Marlborough think twice about harvesting all their grapes this year and as the market gets more competitive it's quality rather than quantity that is preferred.

But a newcomer to the industry, Peter Yealands, thinks he can achieve both. He has the biggest vineyard in New Zealand, and a new wine label which has only been on the market six months.

"If the industry works together, we will get over this and think we don't want to see another one of those," says Yealands, of Yealands Wine.

But it's the bargain prices now that will have drinkers partying at the Marlborough Wine Festival this weekend.