new zealand wine

New Zealand wine: Covid's highs and lows

29 March, 2021

While New Zealand has managed the pandemic better than most, a lack of tourism and difficulties with shipping have taken a toll on wine sales. Martin Green reports.

The rest of the world has looked on with envy in recent months as New Zealanders have partied hard at music festivals, nightclubs and sporting events. Pictures show smiling Kiwis wrapping their arms around one another, sipping wine and enjoying life in the post-Covid era. These look like postcards from the future to many people in countries whose governments have bungled their responses to the pandemic. However, it is not all plain sailing in New Zealand.

The country initially managed to eliminate community transmission by closing its borders, so it has suffered from a lack of tourists. Some small Covid-19 clusters have also been detected this year, causing local lockdowns in certain areas, while there are still limits on public gatherings in cities including Auckland. As such, the wine industry has seen on-trade sales dwindle.

“We’re incredibly lucky in New Zealand to be in the position we are in, but there’s no denying that the on-premise channel has been impacted due to the pandemic,” says Liam Kelly, general manager of sales at Yealands. “While Covid-19 has not been eliminated in New Zealand, it has been for the most part contained, but the closure of the borders and lockdowns have had an undeniable effect on businesses reliant on tourism, including hotels, bars and restaurants. We have seen an uplift in domestic sales over the past eight or so months in retail and grocery, and, as with most other countries, online sales grew during the initial lockdown.”

Aaron Drummond, general manager at Craggy Range, says the business has enjoyed “incredibly strong domestic sales”. But he adds: “Like most markets in the world, this was primarily driven by retail. Interestingly, despite the on-trade being generally open and free to trade, the major cities have struggled.

“Most on-trade distributors in Auckland have said business has been down 10-15% in the Christmas quarter. The general view is that with more people working from home part time, and less business travel, the Auckland and Wellington on-trade has not fully recovered to 2019 levels. While domestic tourism has been strong, it has bene ted the regions primarily, rather than the big cities.

“If we look at our own experience here in Hawke’s Bay, visitation has been up despite no international tourists. While that has been incredibly positive for our wine club and cellar door, generally domestic tourists spend less in restaurants and bars compared to international and business travellers.”

LEARNING TO LIVE WITH COVID

When Drinks International interviewed Josh Scott, winemaker at Allan Scott, he was about to meet up with a bunch of friends in Marlborough, but Auckland had been locked down for a week a er a community cluster of the more contagious UK coronavirus variant was discovered. “We have minimised Covid-19 and learned to live with it, I guess,” he says. “People are socialising, going out, having drinks and trying to live life normally, but we certainly miss the tourists, no doubt. Local sales have been good, I’d say online sales have bene ted the most.





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