Sir: In response to last week’s article about New Zealand wine (‘Deep promotions help New Zealand wines to a 12% uplift in sales), I would like to submit an alternative view that provides a slightly more positive explanation.
There is no doubt that a few multiples have embarked on a degree of discounting activity over the past two years as some Kiwi producers wrestled with an temporary over-supply of Sauvignon Blanc. This has contributed to the 7% rise in volume (Nielsen MAT April 2012).
However, New Zealand’s value has grown at a much higher rate of 12%. This growth is down to a substantial increase in listings of new NZ wines between £7 and £10. The quality has justified the higher prices. Our value would not be growing ahead of volume if we achieved all this by deep discounts. With a smaller 2012 vintage, the supply is now back in balance and we will see less promotional activity, but we still expect strong sales growth because of the consumer franchise that has been built up.
David Cox, director - Europe, New Zealand Winegrowers