We present the May 2023 report awaiting the harvest in Australia and New Zealand.
AUSTRALIA – The Australian harvest is approximately 30-40% below average. The harvest is in its final stages in all regions of Australia and the final forecast is 1.75 million tonnes because the disease pressure, caused by the wet and mild spring induced by La Niña, has affected all wine growing regions to varying degrees.
The Australian wine industry as a whole will take some relief from adding less red wine to its stocks, but will be disappointed by the lower volume of white wines available, particularly Chardonnay, Sauvignon Blanc and Pinot Grigio. Chardonnay has been in high demand as wineries have rejected significant volumes of grapes due to disease, which has led some buyers to raise prices to obtain grapes that are still saleable.
With further high-level government meetings scheduled between the two countries, rumours continue to circulate about the potential reopening of trade corridors between Australia and China. There is talk of reduced sanctions on beef and timber, and Australian exporters have seen proccessing time of their products reduced at Chinese ports. Last month, Australian coal shipments arrived in China for the first time since an unofficial ban was imposed two and a half years ago. Wine suppliers are hoping that China’s current 212% tariffs on Australian wine imports will be reduced to a level that will make supplies to China profitable again.
Australian consumers witnessed yet another interest rate increase the tenth consecutive in the past ten months. The 25 basis point increase brings the cash rate to 3.6%, the highest in 11 years. Inflation stands at 7.8% and is expected to have reached its peak. There is widespread concern for many homeowners who are already struggling with the cost of living. Wineries are seeing consumers reduce their wine purchases or weekly spending on spirits.
NEW ZEALAND – The North Island of New Zealand was hit by Cyclone Gabrielle in early February, which brought torrential rain, high winds, power outages and landslides affecting the six North Island regions of Northland, Auckland, Tairāwhiti, Bay of Plenty, Waikato and Hawke’s Bay.
While the main Sauvignon Blanc growing region, Marlborough, remained relatively unscathed, Hawke’s Bay and Gisborne were affected by the rain. The vineyards are still being assessed for damage. Hawke’s Bay is one of New Zealand’s main agricultural areas for apples, kiwis and potatoes: the cost of damage is expected to exceed NZD 10 billion.
The amount of alcohol consumed in New Zealand decreased by 1.0 per cent in 2022 compared to 2021, with people over the age of 18 reducing their intake to 1.96 standard drink equivalents per day. The annual survey by Stats NZ – New Zealand’s official data agency – confirms that this figure is the lowest recorded in 15 years. People are drinking 25 per cent less than in the 1970s and are also turning to low or no-alcohol options. The total consumption of beer, wine and spirits decreased slightly in 2022, by 0.3%, to 498 million litres. Wine consumption decreased by 5.9% to 101 million litres, while spirits consumption increased by 2.3% or 103 million litres and beer increased by 0.5% to 294 million litres.