New Zealands 2012 harvest was smaller than last years

New Zealand's 2012 harvest was smaller than last year's

New Zealand's main winemakers have posted strong profits this year despite a reduced harvest, a new survey has revealed.

Vineyards with revenues between NZD10m (US$8.2m) and NZD20m posted an average profit of 17%, according to financial benchmarking survey Vintage 2012 released today (28 November) by Deloitte and New Zealand Winegrowers. The results mark a return to the revenue bracket's pre-2010 average, the survey said.

Wineries with sales above NZD20m saw an average profit of 11.1%, down from 15.3% in last year’s survey, due partly to changes in the mix of case sales to bulk wine sales, the survey said. Wineries with sales below NZD1.25m failed to turn a profit on average, according to the survey.

CEO of New Zealand Winegrowers Philip Gregan said 2012 saw a markedly smaller grape harvest than the previous year, causing a change in the country's supply and demand.

“After enduring the global financial crisis and recent years of supply-and -demand imbalance, there are signs of a new optimism emerging as we see another year of generally positive movements in winery profitability,” Gregan said.

However, Deloitte partner Paul Munro warned that exports still face a high New Zealand dollar and he urged vineyards to remain cautious over expansion plans.

“With the supply shortage from vintage 2012, it is apparent from anecdotal reports that new vineyard investments are being considered,” Munroe said.

“Such investments need to be carefully assessed to ensure they are strongly market led and there is no repeat of the supply-and-demand imbalance seen in recent years.”

Earlier this month, New Zealand wine maker Babich Wines told local newspapers it is planning to build a new 6,000-tonne capacity winery.