Palliser Estate signalled the escalation of its business model change towards premiumisation.
The USX-listed wine company noted it planned to procced with its premiumisation strategy sooner than originally planned due to the trading environment.
“Our lower-tier wines are no longer profitable with our cost structure and yields achieved here in Martinborough, putting our overall cashflow and profitability under pressure.”
As part of the change, certain areas of existing vineyards had been identified as no longer suitable for grape growing and no longer financially viable.
The surplus vineyards would be divided into four-hectare lots with some also being prepared for sale.
The company behind the Pencarrow label and its own namesake brand reported its 2024 harvest was up 24% year on year, with 403 tonnes picked.
Sales were tracking below target and under last year's results. Profitability was down on targets and it maintained breakeven year-end forecasts.
Stronger meat and aluminium prices helped to offset weakness for forestry prices in April.
ANZ’s World Commodity Price Index lifted 0.5% last month, when compared with March.
Rural economist Susan Kilsby said global shipping prices generally softened, with easing demand offsetting restrictions in key shipping channels.
Dairy prices gained 0.3% last month.
Kilsby said the New Zealand-European Union free trade agreement came into force at the beginning of this month, which improved access for New Zealand butter.
“Tariffs on NZ butter have been reduced and quotas increased, although the volume of butter that can enter the EU is still relatively small.”
Elsewhere, beef prices rose 6.3%, as global demand remained robust.
The forestry index dropped 8.5%, with log prices now at the lowest level since October 2016, while aluminium prices bounced 11.5% higher after the United States and EU put sanctions on aluminium, copper, and nickel produced by Russia.