The New Zealand wine industry saw a 24% increase in the value of wine exports in the year to the end of June, according to the New Zealand Winegrowers Association.

Wine exports reached NZ$992m, up NZ$194m on the previous year, the trade body said today (19 August).

Growth was driven by the availability of wine following the 2008 vintage and strong demand for New Zealand wine in key markets, notably Australia, the UK and the US.

"New Zealand wine is a strong proposition in the global market. Our reputation is positive and we have carved a niche in our markets. Importantly for the year ahead, quality from the 2009 vintage will be very high across a range of styles, said New Zealand Winegrowers chair Stuart Smith.

But, while the New Zealand's wine industry grew strongly for the June year-end 2009, winemakers and grape growers are facing significant challenges according to the New Zealand Winegrowers' annual report.

"Some unmistakable warning signs emerged this year," Smith added. "Despite sales volumes benefiting from increased supplies from the 2008 vintage, those increased supplies also delivered increased competition and downward price pressure. Without doubt the situation was exacerbated by the global recession. As a result lower profits are the reality for many in the industry this year."

Smith said the industry needed to confront the new reality it was now facing with continued effective management of supply and investment in marketing.

He remained positive about the future, however. 

"While times are challenging at the moment, we have an industry that is united and understands the challenges and opportunities it faces. We have built New Zealand wine into a globally successful brand and that is a sound platform from which to build our future success."

New Zealand Winegrowers in June said they hoped that a 2009 grape harvest level in size with the previous year would help it to maintain wine quality without problems of oversupply.

The 2009 vintage was 285,000 tonnes, which is "marginally" above pre-harvest expectations for a crop of 275,000 tonnes, but in-line with winegrowers' view that the harvest would not be bigger than 2008, the industry body said.