Squeeze on Marlborough vineyard space

Rising exports of New Zealand wine are fuelling demand for vineyard space in Marlborough in the South Island, according to trade body New Zealand Winegrowers (NZWG). The area accounts for three quarters of total wine production in the country and grape growers are running out of space.

Exports grew to NZ$1.3bn last year and could rise to $1.5bn in 2015 buoyed by a record 2014 harvest. But in five to 10 years, Marlborough will be fully planted, warned Philip Gregan, chief executive of NZWG. As well as in Marlborough he said there would be significant plantings in Hawke's Bay in the North Island in the next few years.

Marlborough had around 23,200 hectares of vineyard in 2013 against Hawke's Bay's 5,100 hectares. Demand for space is causing vineyard prices in these regions to grow by 10% and 18% respectively year-on-year to June 2014 on the Knight Frank index with Hawkes Bay's experiencing the second highest price rises in the world.

Gregan said that the US is on course to become New Zealand's biggest export market in 2015, ahead of Australia and the UK.