New Zealand’s annual wine export is growing rapidly and is expected to touch $1 Billion by 2010 owing to rising demand in overseas sales and slump in the domestic consumption.

New Zealand Winegrowers revealed that the wine exports from the country touched a new record level ensuring that the industry would achieve the target of annual exports of $1 Billion by 2010, as reported by tvnz.

The offshore wine sales for the year ended on June 30, 2008 stood at 88.6 Million Liter with total revenue of $800 Million, an increase of 14% from the last year. The highest export was made to Australia with a rise of 37% to record $247 Million, while the exports to the UK rose 8%. Besides, the national production of wine also shot up 40% but the domestic sales tumbled by 5% to 87.4 Million Liter. Moreover, the total sales of wine in the country, including the domestic consumption, were at NZ$ 1.25 Billion (US$ 891 Million).

The main reason for increase in wine export from New Zealand is the soaring demand emanating from the overseas markets, particularly Australia and Asian countries. The growth in wine exports is primarily based on high quality of wine the country offers.

Another key factor for upsurge in the export of wine is decline in the domestic consumption on account of rising food, fuel and housing costs. The rise in food, housing and fuel prices have forced people to cut down their spending on wine, translating into fall of the domestic sales that have made wine makers to increase exports for covering the loss. Besides, the prices of wine have gone up, making it less affordable for the people of New Zealand, resulting in rise of export.

New Zealand’s wine sector might see tough time ahead as the country’s economy is growing at a slow pace and rising volume of wine being shipped to overseas markets in the backdrop of current year’s big vintage.

According to a Research Analyst at RNCOS, “The export of wine from New Zealand is rising on account of falling domestic consumption and strong demand in overseas markets. This will also help the country’s economy to grow rapidly by contributing to the trade income. This will expand the profits of wine exporters significantly in near future.”

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