New Zealand wine industry assesses impact of earthquake

30-Nov-2016 - Last updated on 30-Nov-2016 at 11:36 GMT

The Marlborough region accounts for 77% of the industry's production. Pic: iStock/RSKB

Around 20% of wine storage capacity in New Zealand’s Marlborough wine region was damaged in the Kaikoura earthquake earlier this month, but the industry is planning for the upcoming vintage and believes the sector can still continue its market growth.

The magnitude 7.8 earthquake hit New Zealand’s South Island on November 14, and New Zealand Winegrowers has now completed its survey on the impact of the earthquake.

The Marlborough region, which is located close to where the quake hit, is New Zealand’s flagship wine region and accounts for 77% of production in the country.

A key concern now is to ensure that there is enough storage capacity as the 2017 harvest approaches.

Race to repair before harvest

While businesses have had to cope with wine loss and damage, Philip Gregan, CEO of New Zealand Winegrowers, says that the industry can still continue its market growth this year.

“It is clear there was some wine loss as a result of the earthquake but it amounts to only a little over 2% of Marlborough’s total production,” he said. “While this is frustrating, this is not a major concern as vintage 2016 was a near record one. This means there is plenty of wine available to continue our market growth.”

The biggest impact of the earthquake has been on storage tanks, and it is estimated that 20% of tank capacity in Marlborough has been damaged.

“Many wineries, both small and large have escaped with no damage at all, but in others damage to tanks has occurred,” said Gregan. “Our initial estimate is that 80% of tank capacity in Marlborough is undamaged, but around 20% has been impaired to some extent. These numbers may change as the process of damage assessment continues.”

But Gregan warns that, while tank repairs have already started, it will be a process that will take many months. The New Zealand Winegrowers says it has been liaising with wineries, tank manufacturers, engineers, government and the Marlborough District Council to ensure that repairs and replacements can be made as soon as possible.

The pressure is on because the 2017 harvest will start in around 15 weeks. Steven Joyce, New Zealand’s Economic Development Minister, says that a lack of storage could affect the ability of the industry to process the full harvest.

Marlborough

The Marlborough region has 22,907 total producing hectares, dominated by 17,725 hectares of Sauvignon Blanc. Pinor Noir, Chardonnay and Pinot Gris are also popular.

Availability of stainless steel tanks, logistics, consenting issues and potential skills shortages all need to be addressed, he added, but applauds the work of the industry so far.

“It’s impressive to see how far the industry has come in terms of their response over the last two weeks and we are committed to assisting them in achieving a successful harvest,” he said.

Export impact?

Wine is one of New Zealand's fastest growing exports. In the last 40 years, wine exports have increased from NZ $51m ($36m USD) in 1960 to NZ $1.4bn ($1bn) in 2014, according to government figures.

While roads and transport links have been affected by the earthquake, Gregan says there are no other issues affecting exports.

“We are working with various transport operators, ports and the government to identify and address any issues should they occur,” he said.