In its recent 2009 annual report on the New Zealand wine industry, the New Zealand Ministry of Agriculture and Forests (MAF) makes the observation that Sauvignon Blanc from Marlborough has seen an increase in export volume but not in FOB (free on board) price. From these statistics, the NZ MAF makes the somewhat fanciful conclusion that New Zealand Sauvignon Blanc is being sold on the bulk market to the detriment of "Premium" Sauvignon Blanc from the Malborough region of New Zealand's south island. Oh dear, I'm afraid that the NZ MAF either doesn't understand the global nature of the wine industry or it has allowed itself to indulge in fallacious post hoc, ergo prompter hoc errors of logic.
Just because wine is leaving the country in bulk rather than bottles doesn't mean that it's being sold "on-the-cheap", or even that it's being sold on the bulk market at all. There is nothing intrinsically wrong with shipping wine in bulk and bottling in closer to the point of sale. Bottled wine is more expensive to ship than wine in bulk. It costs money to ship empty bottles to New Zealand and all one accomplishes is to increase the weight and cost of shipping of the final product that needs to be shipped to market. It makes far more sense to ship the wine to the UK, US, or wherever and bottle it much closer to its final destination. Glass = weight = money.
However, if the wine is in fact being sold on the bulk market rather than merely being bottled locally, it doesn't follow that this action is the cause for decreases the prices of top-end SB from Marlborough. Internationally, the value of "Brand Marlborough" is a lot less than you might want to think. Outside of the rarified strata of winorati, which is also a lot less important than one might suppose, there is no such thing as "Brand Marlborough". Most consumers still think Marlborough is a brand of American cigarettes, not a wine region.
It's a much parroted cliche that as supply decreases, demand, and therefore price, increases. Unfortunately for NZ, demand can decrease for reasons unrelated to supply. We're in the middle of a pretty deep recession and it should not be a surprise if consumers are more price-sensitive than they were a couple years ago. It's most likely that the NZ MAF analysts just doesn't understand "the supply" is drawn from a wider region than the Marlborough Valley. The wine industry is global. The relative amount of SB from NZ actually has little impact on the global supply from a consumer's standpoint. At best, foreign consumers view "New Zealand" wine as a good value _for the price_. As long as people are worried that they'll lose their house or their job due to the recession, they will remain extremely price sensitive and flee to other wines, as they should. If a manufactured shortage (ripping out vines around Blenheim NZ) is used to jack up the price, NZ SB will cease to be an option for many consumers and they'll turn to alternatives from Chile, South Africa, and elsewhere. That isn't going to change any time soon.
