New Zealand wine industry in robust position, according to survey
The New Zealand wine industry is largely performing well and profitably, according to a new report.
The 2018 Wine Industry Benchmarking and Insights survey study, Growing Smarter, was released by Deloitte and ANZ Bank in conjunction with New Zealand Winegrowers, and tracks the financial performance of 36 participants, who between them account for 44% of the wine industry in volume terms and 35% by export sales revenue.
According to Deloitte partner Peter Felstead, the 2018 results reveal that this is only the third time in the 12 year history of the survey that all participants recorded positive profits before tax.
“In line with previous years results, larger wine companies with more than $20m in revenue show the largest average profit after tax of 18.7% revenue with smaller wineries generally receiving lower returns and with greater variability amongst respondents,” said Felstead. “It has also been pleasing to see equity levels, as a percentage of total assets for the wider survey group, have been steadily increasing over the last ten years with levels ranging form 54% to 72%.”
Average prices received by New Zealand producers inched up by 1.8% in 2018, after sales outstripped supply in the previous year. Prices per litre ranged from NZ $3.96 for bulk export wine to $8.47 for packaged exports and $1034 per litre for supply into the domestic market. Of New Zealand’s exports, 80% is shipped to just three countries – the US, the UK and Australia.
However, the price of New Zealand wine shipped to Asia, including China, Hong Kong, Singapore and Japan is twice the average export price, though these markets only account for 2.5% of total wine exports, indicating considerable potential for future growth.
The report also identified Cananda and Japan as two markets where growth opportunite are considerable, thanks to the reduced tariffs brought about by the CPTPP trade deal.