Drinkers buying less wine

Press, 29 December 1986, Page 3

Drinkers buying less wine

PA Wellington Consumption of wine is falling again after a price war 12 months ago boosted sales to record levels. The executive officer of the Wine Institute, Mr Terry Dunleavy, said that at the end of October sales were down more than 6 per cent, compared with the same time in 1985 — and the full effects of the price war that year were not felt until November and December. In the 12-month period to last July, prices fell an average 20 per cent, and sales rose 19.4 per cent. During this year, prices rose because wine companies had been losing millions of dollars selling below cost to get rid of a wine glut. About 25 per cent of the grapevines in the country were pulled out, and compensation paid by the Government, to reduce the 1985 harvest. That harvest produced nearly 30 per cent less wine than the previous year. "Wine is highly pricesensitive,” Mr Dunleavy said. “The wineries adjusted their prices back towards profitable levels, then GST pushed those prices higher. “The upward movement of prices has caused a progressive decline in consumption,” said Mr Dunleavy.