Could a rise in prices of bulk wine from New Zealands vineyards signal the end for the countrys cheaper offerings?

Could a rise in prices of bulk wine from New Zealand's vineyards signal the end for the country's cheaper offerings?

A doubling in the price of bulk wine could put an end to cheap wines – particularly Sauvignon Blanc – from New Zealand, according to wine growers in the country’s main grape growing region, Marlborough.

A cold spring last year impacted on flowering, with the 2012 crop down by around 25% on predicted levels in the region. Marlborough accounts for around 65% of New Zealand’s crush and, with next year's harvest expected to hit the same level as 2012, the impact on the country’s volumes of two successive short years is obvious. 

For a region that, only four years ago, was facing an Australian-like glut, the news is not entirely bad. But, as supply and demand have moved into closer alignment, so the price of bulk wines has increased significantly – up to NZD5 (US$4.10) a litre, from a low of NZ$2.50 in 2008.

Such a price hike at the most sensitive end of the market is almost certain to mean an end to many of the cheap labels that have characterised the country's offering over the last four years.

"The hope would be that some of the bottom feeder labels will die away and power will come back to anyone with a good brand," said one winemaker.

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