Thousands of hectares of grapevines are being pulled out as the New Zealand wine industry grapples with a severe global oversupply of grapes, leading to rising economic pressures and significant landscape changes across regions like Gisborne and Hawke’s Bay, according to local growers and industry leaders.
Gisborne Vineyard Reductions and Economic Impact
The country’s largest wine producer, Indevine, has dramatically reduced its grape supply within the Gisborne region due to ongoing economic pressures. Winemaking conglomerate GisVin’s general manager Hamish Jackson described the transformation of the local landscape as stark.
“It’s really tough to drive around here, I used to have a vineyard out there, all of it’s gone now, the landscape around Gisborne changed completely,” Jackson said. According to Jackson, roughly 63 percent of the region’s grapes are being removed.
“We generally harvest 1,340 hectares of grapes around here, with that being halved, 660-something hectares being pulled out, which is a significant amount of wine not going to be produced,” Jackson noted. The local economy faces an estimated $19.5 million loss in income affecting growers, support services, pruners, harvesters, and spray applicators.
Did You Know? Grapes rank as one of the lowest water-use plants per hectare compared to many alternative crops, making agricultural diversification difficult for growers lacking specific irrigation consents.
Hawke’s Bay Grape Pull-Outs and Water Constraints
A few hundred kilometres south in Hawke’s Bay, growers face similar operational hurdles. Local grower Wim Barendsen confirmed he has removed seven hectares of vines on his property.
“I’d estimate Hawke’s Bay-wide is probably about a thousand hectares being pulled out,” Barendsen said. While some growers want to diversify into alternative crops, water regulations present a major roadblock.
“I haven’t got the consent to grow anything else, so grapes are the lowest water use plant per hectare. If I want to grow apples here, for example, I can only grow apples on half my land and have to leave the other half unirrigated,” Barendsen explained.
Global Market Shifts and Overproduction Drivers
Sonal Holland, India’s first and only Master of Wine, pointed to inventory imbalances triggered by the pandemic.
“Kicked off by Covid, rising global inventory. We’re a product of Mother Nature, when vintages are slightly larger, we are seeing softening of demand,” Holland said. Changing global lifestyle patterns have also contributed to declining alcohol consumption worldwide.
Export Opportunities in the Indian Wine Market
Despite domestic supply cuts, a recent free trade agreement with India offers a promising avenue for Kiwi wine exporters. Holland expressed optimism regarding the Indian market, which consumes $55 billion worth of alcohol.
“I think New Zealand most certainly represents a great opportunity within that repertoire,” Holland said, adding that the trade deal provides clarity, certainty, and growing business confidence. “We think of New Zealand as a place that’s very exotic, very beautiful and the wines offer a great range of diversity, great taste and represents something premium.”
Frequently Asked Questions
Why are vineyards being removed in New Zealand?
Growers are removing vineyards due to a global oversupply of grapes, rising production costs, export tariffs, and post-pandemic softening in worldwide alcohol consumption, according to regional industry sources.
How much land is affected in Gisborne?
According to GisVin general manager Hamish Jackson, roughly 63 percent of Gisborne’s vineyards are being pulled out, cutting harvest areas from about 1,340 hectares down to roughly 660 hectares.
What are the economic consequences for local communities?
The reduction in Gisborne grape production is projected to cause a $19.5 million loss in income for growers, pruners, harvesters, and support service providers.
Are new export markets opening up for Kiwi wine?
Yes. According to India’s first Master of Wine, Sonal Holland, a recent free trade agreement with India provides new opportunities for premium New Zealand wine exports.
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