The New Zealand Wine Company says projected underlying net earnings for the June 2009 year will be down significantly compared to a year earlier, although sales volumes are on target.
The fall in earnings resulted from aggressive price competition in the British market, the strength of the New Zealand dollar against the pound, and with decisions taken by the company to clear excess bulk wine stocks at a loss, the company said on Wednesday.
New Zealand Wine Company chairman Alton Jamieson said tough decisions taken during the past six months were necessary.
The decisions were made in a trading environment where the global financial crisis compounded on difficulties created by a wine surplus generated from a significantly higher 2008 Marlborough grape harvest.
"While there is still a lot of uncertainty in the wine industry, directors are comfortable that the company’s cash-based underlying earnings can bounce back in 2010 when Marlborough sauvignon blanc supply and demand comes back into balance," Jamieson said.
The 2009 grape crush was completed, with the company harvesting 2,478 tonnes of grapes from its company-owned and leased vineyards and contract growers.
That was in line with the 2009 budgeted intake and represented a 24% or 765 tonne decrease over last year’s record crush of 3,243 tonnes.
CEO Rob White said the company was close to matching its 2009 harvest intake with the level of global sales demand projected for its wines.
U.S. retail sales of imported rosé wines leapt 42 percent in the 52 week period ending April 4, compared with a less-than-5-percent increases in total sales of table wines during the same period, according to Nielsen Co. data cited by the Provence Wine Council.
The French wine council, known in France as Conseil Interprofessionnel des Vins de Provence or CIVP, said Monday the steep rise in rosé consumption is consistent with an earlier study by International Wine & Spirit Record predicting that consumption of the popular pinkish wines worldwide will jump from 565 million bottles to 620 million by 2012.
Not surprisingly, the CIVP expects the growing thirst for imported rosé wines in the U.S. market will bode well for France, particularly its Provence wine region. The French produce 28 percent of worldwide rosé wines by volume, making it the leader in the category, according to the wine counsel, which represents 700 Provence wineries and 55 local trading companies. Provence produces 38 percent of France’s rosés, the group reported.
Separately, Nielsen figures revealed that 2008 U.S. sales of rosé table wines priced at $6 per bottle or more jumped 24.9 percent by price and 22.4 percent by volume, despite a weakening economy.
Wine producers from France, Italy, Spain and Switzerland held firm on Tuesday against European Union plans to allow rose wine to be made by mixing red and white wines.
Their stand in Brussels came a month ahead of an expected EU vote – by experts on either June 19 or June 26 – to allow the mixing practice, which the vintners claimed will usher in the "industrialisation" of the wine industry.
Winegrowers fear such a move could lead to thousands of job losses and endanger their traditional rose, made by the more time-consuming method of leaving crushed red wine grapes to soak with their juice.
"We are heading towards a clone product, one that is denatured and which will confuse consumers," said Fernando Prieto Riuz, president of Spain’s wine regulatory board.
Claude Bocquet-Thonney, head of the Swiss winemakers association said: "Will the next step be to add artificial colouring?"
The practice of mixing reds and whites is already done by New World wine-makers in countries such as Australia and South Africa.
In an attempt to resolve the row, the European Commission had proposed a compromise whereby wines created by the old method would be marked "traditional rose".
EU governments approved the plans in 2007 and European experts gave them a another green light in January. A new vote by experts is needed now that the World Trade Organisation has given tacit support to the idea.
France is leading the charge for a veto, and while it has the backing of the Greek and Italian governments, it would also need the backing of Germany and Spain to stand any chance of blocking the move.
Australian Prime Minister Kevin Rudd has stocked up the cellars at The Lodge and Kirribilli House with more than $23,000 worth of of taxpayer-funded bottles of spirits and wine.
While the rest of Australia has moved on to drinking Pinot Noir, Mr Rudd has stuck to the tried-and-tested Sauvignon Blanc, Semillon and Shiraz.
The total value of the liquor at Kirribilli House is estimated at $6000, with the most extravagant bottle being Dom Perignon 1985, worth around $300 on the Australian market.
According to the list tabled in Parliament, the selection at The Lodge is worth about $14,000.
With the wine stock valued at $20,000 as at December 2008, Mr Rudd and his guests have ploughed through an average 20 bottles a week since elected.
Leading wine judge James Halliday was surprised at some of the choices, calling the selection ‘boringly conventional’.
‘There are wines I would be happy to drink and there are wines I would be acutely unhappy to drink.’
‘The members of the committee responsible for the selection are clearly adherents of the ABC (Anything But Chardonnay) Club and fervent lovers of all things Sauvignon Blanc,’ he added.
US film director Jonathan Nossiter, maker of Mondovino, has released his first book – an ”anti wine guide” which, like his 2004 documentary, slams overly influential critics and outrageous prices.
Launched in Bordeaux recently, Nossiter said the book, Le Gout et le Pouvoir (Taste and Power), aimed to demystify wine and make it more democratic.
In a veiled attack on powerful critics such as American Robert Parker, Nossiter says it is ‘treason’ to taste 300 wines and then issue mathematical calculations.
”If there were 40 people in the room tasting we would have 40 different experiences,” Nossiter said.
”This book is an anti-guide,” he said, not aimed at imposing one person’s tastes but instead at championing the taste of the individual over that of well known critics.
The book, which will be available in English late next year, “is a call to find another way to talk about wine, to find words that include people, not exclude them,” he said.
It follows hot on the heels of another recently launched book that also criticises Parker, accusing him of ‘croneyism and lack of independence’.
Aside from slamming wine buffs and their snobby talk, Nossiter also takes on outrageously priced restaurants as a barrier to enjoying wines.
Nossiter, who chose to wrote his book in French, made waves at the Cannes filmfest in 2004 with Mondovino, a documentary about the good, the bad and the ugly in world wine.
A British wine importer has moved to allay concerns over the quality of wines sold in aluminium cans after launching an award-winning sauvignon blanc in a Rexam can.
Guy Anderson Wines, based in Somerset, used this week’s London International Wine Fair to unveil Cancan, a French white wine that has been named among the top new products of 2008 and is to be sold in a 250ml can.
Guy Anderson Wines associate marketing director Howard Price said that the can’s design showed that the company was marketing Cancan as a serious wine rather than a cheap alternative.
"The can resembles a traditional wine label – it shows the vintage, the type, the food it can be eaten with on the back, a photo. It’s being presented as a proper wine."
Price said that the can was ideal for young and fresh white and rosé wines that were fermented in steel vats, as well as for sparkling wines. However, he said that they would not be suitable for wines that were treated in, for instance, oak barrels.
He also said that there were advantages in terms of serving sizes and wastage as the can holds a quantity of around two small glasses of wine.
The launch came as Rexam focuses its wine-in-can efforts on the UK. The company is expecting to sell 40m-50m cans to the wine business in Austria and Germany and it is hoping to recreate that market in the UK.
Rexam category development manager Irene Martinez, who is responsible for selling cans to categories outside of the standard soft drink and beer categories, said that talks are being held with both retailers and wine companies with a view to developing the market in the UK.
"This is not a competition with bottles – it is creating a new market," she said. "Cans work for younger consumers, or for drinking on picnics, at festivals and so on."
Martinez added that the growth in drinking occasions outside of pubs and bars also favoured the introduction of the can as a wine container.
"Consumers are making the choice to consume at home or on-the-go and packaging wine in cans targets these occasions perfectly," she said.
Marlborough’s wine industry contributes $1.3 billion to the region’s economy and accounts for 4000 jobs.
A report on the economic impact of the New Zealand wine industry by the New Zealand Institute of Economic Research clearly defines just how important the sector is to Marlborough’s economy.
The report, commissioned by New Zealand Winegrowers, found that $1 of every $5 of economic activity generated in the region could be attributed to the wine sector.
One of the report’s authors, John Ballingall, said the report showed the economic benefits flow out to the entire regional economy, generating a lot of additional jobs outside the immediate wine industry.
"It’s not the planting of the vineyards that generates the spill over effect, it’s the revenue that is generated by them."
For every dollar earned by vineyards or wineries, the return to Marlborough’s economy was $1.71, the report said.
The number of wineries in Marlborough had doubled in the past 10 years and grape growers had more than doubled in the past five years.
With 109 wineries and 524 grape growers, Marlborough was now home to the largest proportion of the New Zealand wine industry.
The sector directly employed 2500 full-time equivalent jobs and was indirectly responsible for an additional 1500 jobs in Marlborough.
This is the first time in 13 years that detailed analysis has been done on the financial impact of the wine industry in Marlborough.
A 1996 study by Lincoln University showed the wine industry contributed $70 million to the local economy and provided 448 full-time jobs.
Mr Ballingall said the rate of growth since that report was nothing short of spectacular, and despite tough economic times, he expected the growth would continue.
Nationally, the wine industry contributed more than $3.5b to the economy and directly employed 5900 fulltime-equivalent workers, with a further 10,600 employed elsewhere because of the activity within the wine industry.
Tesco has launched its new Virtual Wine Advisor, giving customers the chance to get expert wine advice when they’re choosing wine in-store.
The Virtual Wine Advisor acts like an electronic sommelier, offering customers free, expert advice on which bottle of wine to buy.
Located in the wine aisle, the touch screen application gives customers expert recommendations on which wine to choose to go with the meal they are planning – taking the mystery out of wine and food matching.
Customers will also be able to search for wine by country, colour, style and price, and can get access to further information on a bottle of wine simply by scanning the bottle’s bar code.
At home, customers can also print off any relevant information on their chosen wine.
The Virtual Wine Advisor is being trialled in six stores across the UK, and if it proves popular with customers, it will be rolled out to 150 Tesco stores later this year.
Andrew Gale, Tesco BWS Category Technical Manager, said: "We know our customers are really interested in exploring new types of wine, but they want to make sure they’re getting a wine that will suit them, at the right price.
The Virtual Wine Advisor is an exciting new piece of technology that takes the guesswork out of choosing wine and will give customers the confidence to try out wines they wouldn’t normally choose."
