Hawkes Bay flooding may push the cost of wine up

Consumers may see higher cost of wine at the till as Hawkes Bay wine makers may face higher distribution costs due to recent flooding.

Hawkes Bay is the second largest producer of wine in New Zealand, and transport routes to the city were severely affected by Cyclone Gabrielle.

However, New Zealand Wine Growers Association CEO Philip Gregan says that longer routes will not necessarily result in increase in the cost of wine to all consumers. It is up to individual wine makers to decide on cost.

“Yea, well, not necessarily. It depends the costs are passed on or not. Either the winery or the retailer may absorb that cost. Just because extra costs occur, doesn’t mean they are necessarily passed on,” says Gregan.

The floods in Hawkes Bay can result in an increase in wine imports to New Zealand from Australia and other countries.

He says, “There could be some increased imports yes, from Australia or elsewhere, that’s definitely a possibility.”

Increase in imports will bring more competition to the market, but it is not clear what happens to the price of wine. The decision to import is not made by the New Zealand wine industry but by individual businesses.

“Imports depend on the decisions that individual businesses make about how they respond to any shortage they may have,” says Gregan.