2012 Wine and Vineyard Report

An Expert's View about Food , Beverages and Tobacco in New Zealand

Posted on: 23 Mar 2012

The New Zealand Grape Crop will be reduced by at least 28,000tons and at this stage is expected to be 300,000tons for harvest 2012.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 3/1/2012 GAIN Report Number: NZ1203 New Zealand Wine Annual New Zealand 2012 Wine and Vineyard Report Approved By: Joe Carroll Prepared By: David Lee-Jones Report Highlights: The New Zealand Grape Crop will be reduced by at least 28,000tons and at this stage is expected to be 300,000tons for harvest 2012. Consequently wine production will be reduced to an estimated 216 million liters which will help bring the supply and demand equation into balance at better average prices both for grapes and wine. Small Wineries and vineyard owners are still struggling financially and will continue to be under pressure for at least the next twelve months. Excise tax on wine sold domestically has been raised by NZD0.12/liter to NZD2.72/liter. Executive Summary Grape production in 2012 is projected at 300,000 metric tons, 8.5% less than the record 328,000 tons harvested in 2011. The chief reason for the reduction is cooler than normal weather during the 2011/12 growing season which impaired grape pollination. As a result, the 2012 vintage is estimated at 216 million liters of wine, an 8% reduction from 2011?s production level of 235 million liters. Nationally the vineyard production area is stable at 33,600 hectares. Some wineries have begun to worry about maintaining throughput. Spot prices for un-contracted grapes (which bottomed out last year at below NZ$1,000/ton) are now changing hands at NZ$1,500-1,600/ton. Vineyards are still struggling financially and probably need around NZ$1,500/ton to cover costs. Wine production favors white grape varieties chiefly Sauvignon Blanc. In 2011 just under 86% of total grape production were white varieties. Production difficulties arising in the 2011/12 growing season are likely to see this slip to 85%. Looking ahead to 2013, the cooler growing season in 2011/12 is likely to have a negative effect on the crop potential for next year as well, with grape production likely to be at the lower end of a range between 300,000 to 330,000 tons. This would result in wine production on the order of between 216 to 238 million liters. Wine exports in the calendar year (CY) 2012 are forecast at 160 million liters. This is a 5% reduction from record exports of 168.1 million liters in CY 2011. Reduced exports are attributed to reduced wine production in 2012 and subdued global trading conditions. In addition, wineries are reportedly more comfortable with their inventory levels and not under pressure to move increased stocks at discount prices. Australia was the most valuable export destination for NZ wines in CY2011, with wine exports valued at USD$282 million from total export receipts of USD$901 million. By volume, the UK was the leading destination at 58 million liters compared with Australia at 48 million liters. At 34 million liters, the United States ranked as the 3rd highest export destination in both volume and value terms. The industry has used its Price Waterhouse Coopers strategic review of the sector to refocus market development on the Pacific rim, specifically the US and China which are seen as the best prospects for future export growth. New Zealand imported an estimated 27.7 million liters of wine in CY2011 at a total value of USD$111 million. Even though the total volume was down by 5 million liters, total value was up by USD8 million. U.S. wine exports to NZ were valued at USD$197,315 which was its best result in six years and up from USD$87,853 in CY2010. Generally, NZ imports premium brands from the US. Total Domestic wine consumption in New Zealand is estimated at around the 90 million liters annually. It is not expected that this will change in 2012. The excise tax on wine sold in New Zealand has been increased by approximately NZD0.12/liter so the total tax is now NZD2.7206/liter. Vineyard & Winery production 2012 It is estimated that 2012 grape production will be 300,000 metric tons, 8.5% less than the official harvested tonnage in 2011. Under current climate conditions there is more downside risk to this estimate than the likelihood of it being higher. Based on current conversion ratios the 2012 vintage should produce 216 million liters of wine, an 8% reduction from the 2011 production level of 235 million liters. The 2012 production drop is due mainly to: A stable production area, with no net new plantings coming on stream. There is some replanting going on to replace grape varieties and/or trellising and any new areas coming on are balanced by vineyard blocks being withdrawn from production. Climate conditions for the last quarter 2011 were cool and damp which interfered with pollination and subsequent grape bunch development. Grape bunch showing non and poorly Reasonably well pollinated grape bunch. pollinated grapes. Anecdotal reports from the Marlborough region (58% of total vineyard area) suggest yields, in 2012, will be down 20-30% across the region. Bearing in mind the North Island regions haven?t fared so badly with regard pollination losses, the Marlborough losses will likely be somewhat offset by better performance in the northern regions. Consequently, anecdotal yield drop estimates may actually be in line with the 300,000T projected harvest for the 2012 year. In 2011 there was harvestable crop actually left in the vineyards and not taken to the wineries. Various estimates have placed this lost amount at somewhere around 30,000 tons. Had this been harvested, this would have put the actual 2011 crop at 350,000 to 360,000 tons compared with the official tonnage of 328,000 tons that went through the winery doors. A 17% reduction from a crop load of 360,000 tons would give a 300,000 ton loading. With the anticipated drop in grape harvest some wineries are worried about being able to purchase enough grapes to maintain winery throughput. Whereas in 2011 un-contracted grapes sold for prices well below NZ$1,000/ton, this year?s spot prices for grapes have in some cases doubled with NZ$1,500-1,600/ton being mentioned regularly. PRODUCTION TRENDS NEW ZEALAND VINEYARD AND WINE INDUSTRY Yea 2012 r Ending Dec 2003 2004 2005 2006 2007 2008 2009 2010 2011 Forecasember t Number of Wineries 421 463 516 530 543 585 643 672 698 na Producing Area 15,80 18,11 21,00 22,61 25,35 29,31 31,96 33,42 33,60 (hectares) 0 2 2 6 5 0 4 8 0 33,600 Average Yield ((tons per hectare) 4.8 8.9 6.9 8.2 8.1 9.7 8.9 8 9.8 8.9 Average Grape Price (NZ$ per ton) 1,929 1,876 1,792 2,022 1,981 2,161 1,629 1,293 1,172 na Tons Grapes Crushed (000's of Tons) 76.4 165.5 142 185 205 285 285 266 328 300 Total Production Wine 55.0 119.2 102.0 133.2 147.6 205.2 205.2 190.0 235.0 216.0 (millions of liters) WINE CONSUMPTION AND EXPORT TRENDS FOR NEW ZEALAND Yea 2012 r Ending Decem 2003 2004 2005 2006 2007 2008 2009 2010 2011 Forecasber t Estimated Domestic Sales of NZ Wine (millions liters) 26.1 41.6 49.5 51.2 45.9 51.6 58.3 62.7 62.2 62.0 Estimated Imports of Wine (millions of liters) 47.2 37.6 34.8 38.8 42.0 38.1 31.5 32.7 27.7 28 Total NZ Domestic Consumptio n 73.2 79.2 84.3 90.0 87.9 89.7 89.9 95.4 89.9 90.0 Population estimate (millions) 4.03 4.09 4.14 4.19 4.23 4.27 4.32 4.37 4.40 4.45 NZ Consumptio n per Capita of NZ 6.5 10.2 12.0 12.2 10.8 12.1 13.5 14.3 14.1 13.9 wine(L) NZ Consumptio n per Capita of all wine(L) 18.2 19.4 20.4 21.5 20.8 21.0 20.8 21.8 20.4 20.2 Estimated Export Volume (millions liters) 27.2 40.6 57.4 64.7 84.1 98.7 128.5 157.2 168.1 160 Export Value(million s of NZ$ 1014. 1088. 1135. FOB) 271.0 369.6 471.3 610.8 759.9 903.3 0 7 2 na Estimated Average Price NZD/L $9.96 $9.10 $8.22 $9.44 $9.03 $9.15 $7.89 $6.93 $6.75 na Export Value(million s of $US FOB) 158.7 246.4 331.8 396.6 560.1 632.6 652.0 788.2 900.9 na Estimated Average Price USD/L $5.83 $6.06 $5.79 $6.13 $6.66 $6.41 $5.07 $5.02 $5.36 na Estimated Total Supply (Production + Imports) 102.2 156.8 136.8 172.0 189.6 243.3 236.7 222.7 262.7 244.0 Estimated Total Demand (exports+ consumption ) 100.4 119.9 141.7 154.7 172.1 188.4 218.4 252.5 258.0 250.0 Interim balance of Supply less Demand 1.7 37.0 -4.9 17.3 17.6 54.9 18.4 -29.8 4.7 -6.0 Estimated Stocks at end Dec 44.2 81.1 76.3 93.6 111.2 166.0 184.4 154.6 159.2 153.2 Sources: NZ Wine Growers, StatisticsNZ, Global Trade Atlas, Post Estimates NEW ZEALAND PRODUCING VINEYARD AREA BY GRAPE VARIETY (Hectares) 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* 2012* Sauvignon 3685 4516 5897 7277 8860 10491 13988 16205 16910 16758 17297 Blanc Pinot Noir 2029 2624 3239 3757 4063 4441 4650 4777 4773 4803 4828 Chardonnay 3427 3515 3617 3804 3779 3918 3881 3911 3865 3823 3792 Merlot 1077 1249 1487 1492 1420 1447 1383 1369 1371 1386 1403 Riesling 529 653 666 811 853 868 917 979 986 993 1009 Pinot Gris 232 316 381 489 762 1146 1383 1501 1763 1725 1764 Cabernet 745 741 687 614 531 524 516 517 519 519 521 Sauvignon Other 2063 2186 2138 2758 2348 2520 2592 2705 3241 3593 2986 Total 13787 15800 18112 21002 22616 25355 29310 31964 33428 33600 33600 *Estimates Source: New Zealand Wine Growers New Zealand wine production is heavily weighted toward the white varieties. In the last ten years white wine reached its lowest proportion of the total annual grape production in 2003 at just under 74% of the total. In 2011 it was just under 86% of total grape production. For 2012 it may slip slightly but will still be around 85% of total production. 2013 As next year?s bunch numbers are set during this year?s pollination and the ensuing growing season, there is a real potential for low grape yields again next year as current cool weather conditions are detrimental to bunch numbers. However by laying down extra cane at winter pruning, the effect of low bunch numbers could be allayed to some extent. It is expected that 2013 grape production will be in the range of between 300,000 to 330,000 tons, with wine production estimated at between 216 to 238 million liters with a weighting toward the lower end of the range. Wine Supply and Demand Balance ? and the Role of Bulk Wine Sales The table shown above on wine consumption and export trends uses actual wine production, imports and exports together with data on domestic wine consumption to estimate the supply and demand picture for the New Zealand Wine Industry for December years. Because there is a production lag, the estimated total wine supply will never all be available to ship or consume in the year of harvest and manufacture. By necessity there needs to be stocks (inventories) on hand at the end of December each year which are either still in the production phase(red wines) or on hand to satisfy sales demand for the first six to nine months of a new calendar year prior to that years vintage becoming available. It does appear that the two big production years in 2008 and 2009 boosted inventory levels well beyond comfortable levels for the industry. Subsequently the industry has had to use various stratagems to get supply back in sync with demand: sales of bulk wine at discounted prices has been one pressure relief valve, reducing imports another and grape purchase contracts which have yield caps are common especially for sauvignon blanc. During 2011, bulk wine exports were used aggressively to help dispose of New Zealand?s largest ever production, but now that inventory levels have been brought under control, it is likely that bulk wine sales will be reduced and with significantly reduced wine production in 2012 it is likely that bottled wine demand will slowly catch up with supply. From a peak of 55.6 million liters exported in 2011, export sales of bulk wine may be reduced to between 30-40 million liters in 2012. It would appear that the sector has brought the supply and demand equation roughly into balance. It has come at a cost, however, with many wineries and grape growers struggling to make a profit with perhaps another year or two of pain to be endured before revenues rise enough to again ensure general industry profitability. There is a lot of financial restructuring going on within the sector, both at vineyards and wineries, and always at the boutique or medium scale level of enterprise. In most cases the banks are leading the endeavor with receiverships and forced sales where the debts and cash flow of the businesses have deteriorated beyond their ability to recover. Source: Global Trade Atlas Exports and Trade 2012 Exports of wine in 2012 are forecast at 160 million liters, about 5% lower than 2011 exports. The reduction in exports is attributed to: Reduced Wine production in 2012 being down by 8% on the 2011 year. Bulk wine sales being reduced but bottled wine sales not completely picking up all the anticipated bulk wine reduction. Global trading conditions still subdued enough that it will be difficult to increase sales volumes of wine at stable or increased prices. Wineries being reasonably comfortable with inventory levels and not feeling too pressured to quit stocks at discount prices. The Price Waterhouse Coopers strategic review of the sector and NZ Winegrowers recommended the two markets that the sector should concentrate most on increasing sales were the U.S. and China. Under the FTA with China most wine from NZ will enter China free of tariffs from 2012. While the duty free entry is beneficial, developing the Chinese market will take time and a lot of patience. It is very important to find a reputable distributor and to eliminate unnecessary steps in the supply chain. 2011 Wine exports totaled 168.1 million liters in calendar year 2011, which was 10.9 million liters or nearly 7% above the 2010 level. Closer examination of the result shows that bulk wine exports increased by 11.9 million liters and bottled wine exports actually fell by just under a million liters. Bottled white wine which has undergone such huge growth over the last 10 years actually fell by 2.4 million liters which wasn?t quite made up with increases of bottled red and sparkling wine. New Zealand Export Statistics Commodity: All Forms of Grape Wine Annual Series: 2006 - 2011 United States Dollars Partner Country 2006 2007 2008 2009 2010 2011 Australia 100,712,177 156,240,219 212,790,890 214,652,524 241,935,123 282,381,219 United Kingdom 125,881,140 184,342,571 177,523,811 182,516,656 217,099,813 233,834,894 United States 103,449,207 123,587,770 127,754,071 135,272,961 171,115,415 185,885,058 Canada 19,120,679 27,404,756 33,068,575 35,074,628 45,027,040 50,939,389 Netherlands 7,808,321 9,681,757 10,887,364 13,400,902 16,724,004 22,309,354 China 1,084,319 1,600,397 3,658,389 9,928,638 9,615,562 18,010,838 Hong Kong 2,552,654 3,591,961 5,500,629 6,806,659 10,517,428 14,947,325 Ireland 5,748,013 9,089,180 11,493,339 9,669,182 12,638,760 13,147,636 Singapore 3,803,771 5,557,444 8,069,901 7,869,405 10,334,513 11,282,094 Japan 4,278,697 4,823,492 5,451,717 5,327,330 7,652,789 8,768,657 All other Destinations 22,133,206 34,202,708 36,377,080 31,459,303 45,552,632 59,423,063 World Total 396,572,184 560,122,252 632,575,763 651,978,184 788,213,081 900,929,525 Source: Global Trade Atlas New Zealand Export Statistics Commodity: All Forms of Grape Wine Annual Series: 2006 - 2011 Quantity (Liters) Partner Country 2006 2007 2008 2009 2010 2011 United Kingdom 23,511,800 30,573,847 30,686,804 42,713,906 52,598,891 57,969,773 Australia 15,626,101 21,646,362 32,695,273 44,092,757 47,277,033 49,758,189 United States 15,836,094 19,719,331 19,702,620 23,404,293 32,746,298 34,074,868 Canada 2,745,472 3,328,206 5,043,875 5,900,736 7,731,832 5,656,200 Netherlands 1,419,050 1,428,742 1,710,785 2,477,451 3,172,715 4,637,064 Ireland 854,957 1,230,882 1,553,318 1,470,070 2,166,565 2,022,874 China 171,991 211,451 460,462 1,188,671 1,211,721 1,968,029 Hong Kong 385,658 501,691 644,463 796,397 1,105,349 1,471,711 Sweden 374,307 523,757 547,868 819,800 1,072,595 1,322,476 Singapore 463,906 602,832 881,008 970,595 1,230,980 1,103,173 All other Destinations 3,342,519 4,367,854 4,794,627 4,679,505 6,849,810 8,147,535 World Total 64,731,855 84,134,955 98,721,103 128,514,181 157,163,789 168,131,892 Source: Global Trade Atlas New Zealand?s appreciating currency is having a major effect on returns received back to NZ traders. For example in 2011 U.S. dollar terms, returns actually rose by USD0.34/L in comparison to 2010, however in NZD terms returns they fell by NZD0.18/L. Participants in the sector cite the appreciation of the dollar as a major impediment to profitability. Wineries who are exporting a good proportion of their wine to Australia have been able to avoid some of this erosion of returns due to the even stronger appreciation of the Australian dollar. Imports & Importing Regulations New Zealand Import Statistics Commodity: All Forms of Grape Wine Annual Series: 2006 - 2011 United States Dollars Partner Country 2006 2007 2008 2009 2010 2011 Australia 70,531,133 81,499,483 68,388,907 57,209,052 67,342,208 68,955,838 France 19,050,914 23,899,842 33,421,254 16,581,702 21,732,714 26,902,311 South Africa 823,071 3,639,284 9,817,365 5,771,243 4,980,260 4,533,183 Italy 7,647,718 9,431,038 7,675,010 5,692,701 4,392,345 4,500,502 New Zealand 460,010 914,735 684,404 801,757 1,305,474 2,081,026 Spain 1,625,740 2,165,912 2,196,482 1,400,993 1,228,606 1,570,526 Portugal 830,395 1,646,519 900,047 736,847 1,213,983 897,877 Chile 1,338,227 1,391,914 2,717,385 517,016 287,224 588,367 Germany 388,091 647,269 428,003 292,707 246,512 305,677 Argentina 411,309 508,982 554,499 245,187 183,490 301,725 United States 188,267 182,900 120,462 93,469 87,853 197,315 All Other Origins 172,356 272,516 332,510 297,005 221,615 297,209 World Total 103,467,231 126,200,396 127,236,330 89,639,679 103,222,284 111,131,557 Source: Global Trade Atlas Composition and Labeling Requirements All wine sold in New Zealand, including imported wine, must meet the labeling and composition requirements set out in the Australia New Zealand Food Standards Code, commonly referred to as ?the Code?. (Click here for information on the code: http://www.foodstandards.gov.au/foodstandards/foodstandardscode/) In addition to the regulations in the Code, New Zealand has rules for grape wine label statements about variety, vintage, or country or area of origin. These rules are collectively known as ?the 85% rule?. If a label states the wine is from a particular grape variety, vintage, or area, then at least 85% of that wine must be from that variety, vintage or area. The 85% rule applies to wine labeled for retail sale. It does not apply to wine sold in bulk. As statements about grape variety, vintage or area of origin are not mandatory on a wine label in New Zealand, any label that does not have this information is not subject to the 85% rule. While there are no specific requirements for information that goes on front or back wine labels in New Zealand, front labels tend to be fairly simple. They typically contain the name of the winery, the region, the varietal, and the vintage year. This universal approach affords New Zealand?s export-oriented wine sector with the flexibility and cost-advantage of printing up back labels with the specific information required by the competent authority in New Zealand?s many export markets. New Zealand and the United States have an agreement in place that recognizes the respective wine making practices of the two countries. However, there are some differences in labeling requirements. For instance, New Zealand regulations require specific information on the label regarding how many ?standard drinks? are contained in the wine bottle. There is also a requirement for allergen labeling, which does not exist in the United States. (For instance, if the wine was fined with egg whites, that must be printed on the label.) New Zealand also requires the ?supplier? to be printed on the label, which could be the manufacturer, importer or distributor. (Most exporting companies tend to put the name of the importer on the back label.) Unlike the United States, New Zealand does not require a government health warning on the label. For a list of composition and labeling requirements, please see Appendix 1 of this report. Tariffs and Taxes Des Tariff as of Excise cription HS Code January 2011 Equ Levy* ivalen ALACt Sparkling 4.1892 cents W .7206 per liter ine 2204.10 5% $2 per liter W $2.7206 per liter 4.1892 cents ine of Fresh Grapes 2204.10 5% per liter Wine for Further 4.1892 cents M 2204.29 5% $0 anufacture per liter Source: New Zealand Customs Working Tariff Document Note: The excise equivalent for imports is equal to the tax levied on domestically produced wine. Taxes listed here are a guide only. See Appendix II for the New Zealand Customs website. Product for further manufacture has an excise tax placed on it when the final product is sold to retailers. * Alcoholic and Liquor Advisory Council (ALAC) Levy Excise Equivalent: The excise equivalent is charged to the importer or wholesaler when the product is sold to the retailer. Imported product that is moved to a licensed manufacturing area for further manufacture is not assessed the excise tax until after the manufacturing process is completed and it is sold to the retailer in a consumer packaged form. Goods and Services Tax (GST): With few exceptions, goods imported and sold in New Zealand are liable for a Goods and Services Tax (GST) of 15%. GST is payable on the sum of the Customs value of the goods, the import duty, the ALAC levy, and freight and insurance costs. Import Entry Transaction Fee: An import transaction fee of NZ$25.30 is payable on every import entry and import declaration for goods. A bio-security risk screening levy of $12.77 is also collected by Customs on behalf of MAF Biosecurity New Zealand. The total NZ$38.07 is collected at the time goods are cleared and any duty and/or GST payable is collected. This is charged and shown separately on Deferred Payment and Cash Statements. The fee is included with the duty and GST amount shown on the "Cleared Entry Message" received by importers and Customs brokers who lodge electronic import entries. Appendix I. Mandatory Requirements for Wine Imported into New Zealand MANDATORY REQUIREMENTS (Standards 1.2.1, 1.2.2, 1.2.3, 1.2.5, 1.2.9, 2.7.1) The following requirements apply to all wine for sale in New Zealand. Different requirements may apply in export markets. Legibility (Standard 1.2.9) Any mandatory items must be set out legibly and prominently such as to afford a distinct contrast to the background, and in the English language. Name of Food (Standard 1.2.2) All wine must bear a name or description sufficient to indicate the true nature of the food (e.g. ?sparkling wine?, ?white wine? etc, a grape variety name, or a generic name such as Port). Lot l wine must bear lot identification on the package. If there is just one bottling of a particular wine then there is identificat Alion no need for a separate lot number, as the lot is self-defined. (Standard 1.2.2) Name and address of supplier All wine must bear the name and business address in New Zealand or Australia of the supplier. The ?supplier? may (Standard 1.2.2) be the producing winery, packer, vendor or importer. The address should be a physical address. Alcohol declaration (Standard All wine must bear an alcohol declaration. The acceptable form for the declaration is ?ml/100g? or ?ml/100 ml? or 2.7.1) ?x% alcohol by volume? or words or expressions of the same or similar meaning ? i.e. ?% vol? will suffice. Tolerances of the declared alcohol content from that actual alcohol content are: fortified wine: + or ? 0.5%; wine and sparkling wine: + or ? 1.5% Net contents (Weights and All wine must bear a statement of net contents (e.g. 750ml). measures regulations 1999 and amendments) Standard drinks (Standard 2.7.1) All wine must bear a standard drink declaration The form of the standard drink statement is: ?contains approx. x.x standard drinks?. The formula for calculating the number of standard drinks is: 0.789 x the actual alcohol content x the volume of the container (in liters). Country of Origin (Wine All wine must bear a country of origin declaration (e.g. ?New Zealand wine?, ?Product of New Zealand?). This is Regulations 2006) essentially a 100% standard ? if any of the grapes, grape juice, concentrated grape juice or spirit used in a wine originates in another country, then that must also be included on the label Date of Labelling (Standard 1.2.5) Date labelling is not required for bottled wine, but may be for wines with a shorter shelf life, such as bag-in-box. Allergens (Standard 1.2.3 All wine must bear a sulphite declaration if it contains more than 10 mg/kg of sulphur dioxide. The form of the statement is: ?contains preservative 220? (or 221, 222, 223, 224, 225, 228), ?contains sulphites?, or ?contains sulphur dioxide?. A wine label must include an allergen declaration if egg, fish or milk products are present. Isinglass is now exempt from allergen labelling, although other fish collagen products still need to be declared. Prohibited Labelling on Wine Wines are prohibited from bearing health claims, or making representations as to being low in alcohol or non- (Standard 2.7.1 and 1.1.A.2) intoxicating etc GRAPE VARIETY, VINTAGE AND AREA OF ORIGIN (Wine (Specifications) Notice) 2006) Statements about grape variety, vintage or area of origin are not mandatory on a wine label. When they are used on wines made from 2007 onwards all wines must comply with these rules whether they are destined for export or not. The only exception is when an overseas market has a less strict requirement and the NZFSA has given specific permission for exporters to use the less strict requirement applying in that market, as is currently the case for the USA. A label that states the wine is a single grape variety, vintage or area must be at least 85% from the stated variety, vintage or area. For example a ?2007? wine must contain at least 85% of vintage 2007. wine. A label that states the wine is a blend of grape varieties, vintages or areas, at least 85% of the blend must be from the stated varieties, vintages or areas. For example ?Chardonnay Chenin Blanc? must contain at least 85% from Chardonnay and Chenin Blanc grapes. A label that states the wine is a combination of grape variety, vintage, and area of origin, the combination must be at least 85% of that wine. For example ?2008 Marlborough Pinot Noir? must contain a minimum of 85% Pinot Noir from Marlborough that was harvested in 2008. A label that states more than one grape variety, vintage, or area, must present that information in descending order from the greatest to the least proportion in the blend. For example ?Chardonnay chenin blanc? must contain more Chardonnay than Chenin Blanc in the blend. A label must not include a claim about grape variety, vintage or area if that wine contains a greater percentage of wine from another grape variety, vintage or area that is not referred to by that label. For example a wine that contains 75% Cabernet Sauvignon, 15% Pinotage and 10% Merlot could be referred to as a ?Cabernet Pinotage? or a ?Cabernet Pinotage Merlot? but not a ?Cabernet Merlot?. Cultures of micro-organisms used to make wine may be excluded from the minimum content calculations (up to a maximum of 50ml/L) as can brandy or other spirit used for fortifying wine. Wines made from the 2006 and earlier vintages are exempt from the 85% rules, but remain subject to the current 75% requirement for statements about grape variety and the Fair Trading Act. If a blended wine contains more than 50% wine from the 2006 vintage or earlier, and that wine is blended before 1 July 2008, then the old rules continue to apply. Source: New Zealand Winegrowers
Posted: 23 March 2012

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