New Zealand’s grape glut

Grape growers in New Zealand’s Gisborne region are facing a possibly difficult future after the country’s largest wine producer, Pernod-Ricard, recently announced it will significantly cut back the amount of grapes it buys from the region next year. Gisborne growers fear they are bearing the brunt of New Zealand’s nationwide problem of an oversupply of grapes. How they deal with the impending crisis could be crucial for the country’s wine future.

After more than a decade of rapid growth, New Zealand is starting to feel the effects of planting too many vines. In just the past six years, the country’s wine exports have risen an average of 27 percent a year, according to an industry analysis by Citigroup. But all the new vineyards, combined with record crops in the past two vintages, have created too much wine. There is now a 70 million litre gap between how much wine New Zealand produces and how much it sells, according to the New Zealand Winegrowers, an industry trade group. In Central Otago this past harvest, some growers left grapes on the vines to rot.

Gisborne, which lies on the North Island, doesn’t have the glamour of other New Zealand appellations such as Marlborough and Central Otago, but has long been a source of low-cost Chardonnay. Most of the local growers sell their grapes to wineries. Pernod-Ricard’s New Zealand division is the biggest buyer.