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New Zealand winemakers are warning that the strong Kiwi dollar could make exports unviable for some producers.
Stuart Smith, president of New Zealand Winegrowers, said the shift in exchange rates meant that exporters were now earning 15% less than a year ago. The dollar stands at a record high of around 88 US cents, compared to 66 cents a year ago.
Smith told the Marlborough Express that exchange rates were a bigger problem for New Zealand wineries than the 2009 wine glut and the recent rise in domestic duty rates.
He added: “I simply do not accept that there is nothing that we can do about it. If we still have the kiwi dollar at 80 US cents in 12 months time there will be a whole lot of wine exporters and other non-commodity exporters out of business and more people in the dole queue.
“We already know the wine industry has been experiencing low returns in a tight market.”
Last month New Zealand imposed the biggest tax increase on wine for more than 20 years, and producers say they are likely to foot most of the bill.
Story by Graham Holter
Courtesy of Harpers Wine and Spirit Trades Review