Sales of New Zealand wines are booming as deep discounts win over cost-conscious drinkers.

An oversupply of New Zealand wine over the past few years had led to a proliferation of heavily discounted exclusive-label sauvignon blancs on supermarket shelves, helping boost off-trade sales of wines from the region by 12% to £309m on volumes up 7% [Nielsen 52w/e 28 April 2012].

“The glut introduced a mainstream shopper who wouldn’t have considered sauvignon blanc before,” said Paul Shelton, category insights manager for importer PLB, adding that shoppers were sticking with New Zealand wine when they wanted to trade up.

Tesco exclusive Wairau Cove has overtaken the Oyster Bay brand to become the leading New Zealand wine brand in the mults by volume in the past year [Nielsen 52w/e 31 March 2012].

Wairau Cove is currently selling at £10.99 but has been on promotion for 24 weeks out of the past 52, at an average discount of 50.6% [Brandview 52w/e 20 June].

Its sales have soared by 47% to £25m over the past year and volumes have grown 40% [Nielsen 52w/e 28 April 2012].

The deep discounting of New Zealand wines didn’t appear to have harmed sales of the country’s more premium offerings, said Emma Nichols, head buyer at Oddbins.

“I was concerned we would see a drop in interest in the higher-priced wines because of the discounting but that hasn’t happened”, she added.

Sainsbury’s said New Zealand wines had helped drive a 33% increase in sales of its Taste the Difference premium wine range over the past year [52w/e 12 May 2012].

New Zealand has the highest average price tag of the top 10 wine producing countries by volume - at £6.29/75cl in the off trade against a category average of £4.95 [Nielsen 52w/e 28 April 2012].

A drop in the size of the New Zealand wine grape harvest would put upward pressure on the price of New Zealand wine over the coming year, added PLB’s Shelton.