The New Zealand Wine Company has warned that net earnings will be down "significantly" for fiscal 2009, despite sales volumes remaining on target.

Profits will suffer due to "aggressive price competition" in the UK market, the strength of the New Zealand dollar against sterling and the company's decision to clear excess bulk wine stocks at a loss, New Zealand Wine Company (NWC) said yesterday (3 June).

"Directors believe that the tough decisions taken during the past six months were necessary in a trading environment where the global financial crisis compounded on the difficulties created by the wine surplus generated from the significantly higher 2008 Marlborough grape harvest," said group chairman Alton Jamieson.

He added: "While there is still a lot of uncertainty in the wine industry directors are comfortable that the company's cash-based underlying earnings can bounce back in 2010 when Marlborough sauvignon blanc supply and demand comes back into balance."

NWC said it is still unable to provide net earnings guidance for the full-year to the end of June.