FEATURE: Wine Country over a barrel? | Hawkes Bay News | Local News in Hawkes Bay

The wine glut has Hastings contract grower Keith Sowersby counting his pennies. He was head of horticulture at Hastings Boys' High School until 2003 when he left to concentrate on his 10ha vineyard. ``It was wonderful. I made a great living.''

This winter he will prune his sauvignon blanc with a chainsaw because nobody wants it.

He was back at school relief teaching.

``The wineries aren't making any money either. The only ones smiling are the supermarkets with their mark-ups and the Government with their taxes.''

Mr Sowersby had a steady hand on the wheel, he was sure prices would improve.

``I've graphed the price we've received since 1981 and there's a definite five-year cycle. We have had two bad years but things will improve. It's worse than'85 though.''

In 1985 the Labour Government subsidised growers to pull up unwanted vines and replace them with more desirable varieties such as sauvignon blanc.

``I know a grower who sprayed his sauvignon with Roundup when he heard his contract wasn't being renewed.''

Clearview Estate co-owner Tim Turvey said sauvignon blanc was seen as a godsend by accountants.

``It can be bottled straight from the vat and a cheque banked within three months. Red wines take years.''

As soon as the sheep were trucked off to the abattoir a massive planting programme transformed the Marlborough flats.

Marlborough sauvignon blanc was a hit. ``We were able to export Hawke's Bay wines overseas on the back of their success.''

But the world economy retracted and good wine was being sold below the cost of production.

``Seventy per cent of Marlborough wine is now sauvignon. It put New Zealand on the world map and now it might drag us off as well. I bet the big boys are taking a good look at themselves.''

The two ``biggest boys'' in New Zealand are also the two biggest drink companies in the world, Pernot Ricard and Constellation Brands.

Eastern Institute of Technology wine academic Tim Creigh says Hawke's Bay is chugging along nicely, doing its own thing.

``We're not one-dimensional. We make a full range of styles, from champagne to stickies [dessert wines]. We also make some of the best syrahs in the country. Hawke's Bay reds dominate the gold medals in the national wine awards in every category except pinot noir.

``The Gimblett Gravels area is a cornerstone of any vineyards in Hawke's Bay and Delegats have bought five properties there. That sort of dosh in these times shows a real commitment.''

Delegats is New Zealand's third largest winery based in Auckland. Its Oyster Bay merlot is Hawke's Bay's largest volume of exported wine.

Te Mata Estate director Nicholas Buck says Hawke's Bay is not as vulnerable as Marlborough.

``Hawke's Bay does not have its eggs in any one basket, as in all in one variety. It's very diverse.

``This means we're less easily marketed in terms of a simple message, such as Marlborough or Otago which have achieved market penetration saying:'This region means this variety'.

``Those regions are now experiencing the pains that go with rapid growth. Hawke's Bay has a much longer history, a much greater depth and variety, and a more conservative and consistent approach. Therefore the highs and lows are mitigated.''

Havelock North's Advintage director John McPherson is bigger than most _ and so is his internet wine business.

He says prices have gone through the floor in the past two years.

``The fundamental change in the industry is that it is starting to eat itself for cashflow. Second labels, generic labels, it's called phantom branding.''

He sees Hawke's Bay reds as the next big thing internationally.

``Hawke's Bay's results in comparable tastings for Bordeaux wines have sat the world's wine press on its arse. The disbelievers have been converted. We provide great value and have the one thing that world wine geeks crave _ the scarcity factor.''

Price discounting is the biggest threat, he says. ``The big two supermarket chains who sell the biggest volume of wine are fighting in their own sandpit.

``Only the big wineries can afford to play in that environment but unfortunately everyone else is forced to. It's a race to the bottom.

``Buyers will expect cheap wine and there's only one conclusion, a shake out of some producers.

``I'm a great believer in Hawke's Bay wines but we must preserve our price difference.''

While none in the industry could put a finger on how many wineries were ``actively'' on the market, rural manager for Bayleys Hawke's Bay Glyn Rees-Jones, who sourced five properties on the Gimblett Gravels for Delegats Wines, said he has only one active listing.

His last sale was a ``solid brand to a couple who had made the passion decision''.

``Like any real estate agent in any market, I'll find sellers if buyers present themselves, but there are few buyers.''

Hawke's Bay Winegrowers Association chairman Rod McDonald said it was impossible to know how many were on the market.

He concedes some, especially contract growers on the periphery of the industry, are suffering.

``Wineries are in it for love not money. If they're in trouble they'll keep it to themselves.''

He said many were doing very well with established buyers.

``You take your bruises and you get on with the job and you move on. It's a cycle.''