November 26, 2008 / 7:01 AM / in 9 years

New Zealand wine booms amid market gloom

WELLINGTON (Reuters Life!) - Financial markets may be melting and economies in recession, but that hasn’t put consumers off quality New Zealand wine, as booming exports show.

<p>A man drinks red wine in a file photo. REUTERS/Stoyan Nenov</p>

The country’s boutique wine industry notched record sales in September and with similar results expected for October, it is on track for its planned NZ$1 billion ($545 million) annual earnings by 2010.

“In two words: our wine is world-class,” said New Zealand Winegrowers chief executive Philip Gregan.

“Our harvest was much bigger than last year‘s, bigger than anticipated. That reflects the fact that there was a very good growing season from December through March,” he added.

A record 14.4 million bottles of New Zealand wine worth around NZ$100 million ($56 million) were sold worldwide in September and early figures suggest October will be just as big.

A prominent “New World” wine producer, New Zealand is best known for its sauvignon blanc but has a growing reputation for pinot noir, and targets exports at the top end of the market.

Most of the country’s more than 500 winemakers are boutique, small scale operations producing low volumes of niche varieties.

One such boutique company is Framingham Wines, operating in New Zealand’s major wine region Marlborough, located at the top of the South island.

It produced six botrytis fungus affected dessert wines this year where the grapes were left to almost rot on the vine.

The result was a vintage of just 250 bottles of a sweet wine, known popularly as “stickies.”

“To me the most important thing is what is in the bottle. We didn’t make them to make money, we made them because we could,” said winemaker Andrew Hetley.

“We wanted to celebrate those weather conditions we had during vintage, rather than sit back and moan about them.”

Britain is New Zealand’s premium market, but Gregan said a big effort is being made to expand sales in non-traditional markets such as the United States and Asia.

“The product is good, it’s just getting it known which is the challenge in those non-traditional markets,” he explained.

New Zealand produces less than 0.5 percent of global wine output and about 1 percent of world exports, but producers are anxious to avoid being labeled bulk purveyors.

Neighboring Australia is a major global “New World” wine producer and exporter, with well-known brands including Penfolds and Jacob’s Creek.

“The plan is to try not to let volume lead to any lowering of perception about the quality of our wines. Wine companies are working very hard to achieve that,” Gregan said.

(Additional reporting by Gyles Beckford)

Editing by Miral Fahmy

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