Strong sales for Marlborough vineyards in 2020 – Colliers

3rd March 2021 By Shannon Williams | shannon@foodticker.co.nz | @foodtickernz

Marlborough’s viticulture market saw strong sale numbers in 2020, with the volume of vineyard sales in the region almost doubling on the previous year, according to Colliers.

The agent’s Marlborough Viticulture update for February 2021 said there were 30 sales in 2020, compared to 16 in 2019 and 13 in 2018.

Market value had also increased throughout the second half of 2020, despite the uncertainty surrounding Covid-19.

“Vineyard profit before tax per hectare for the 2020 vintage showed a lift in returns on the basis of favourable growing conditions throughout Marlborough, with high quality fruit produced at favourable yields,” Collier’s registered valuer Tim Gifford said.

“Returns will fluctuate from season to season depending on growing conditions experienced, and the market takes a long-term view on profitability within the industry.”

Vineyard operating costs continued their upward trajectory with a rise of around 2% on last year, mainly as a result of increased labour cost.

Gifford said smaller wineries had been impacted by the decline of hospitality and cellar door trade in New Zealand and this was expected to continue with tourist numbers unlikely to recover in the short term.

“However, despite Covid-19 difficulties, New Zealand wine exports have actually benefited from the pandemic, with more people drinking at home across the United States, the United Kingdom and Europe, leading to an uptick in retail sales, along with increased online sales.”

A 2020 report by Rabobank showed wine export revenue was forecast to reach $2.1bn for the year ended June 2021, a 9.5% increase on the year before.

The increase was aided by the large vintage harvested in early 2020, however production from the upcoming 2021 harvest would likely be lower, due to frosts in several South Island regions in September and October.

“This is putting upward pressure on grape prices with competition between wineries to secure fruit to meet high demand,” Gifford said.

“With increased labour costs and a high exchange rate, this may squeeze winery margins, and will further highlight the importance of scale and markets in the industry.”