Over coffee yesterday, a wise acquaintance — someone with considerable experience in both the apple and wine industries in Hawke’s Bay and beyond — made the comment: “The apple business is broke and the wine business is bankrupt.”

His chief argument was simply that neither product can possibly be price competitive in world markets in the long run. Our wine already isn’t.

I don’t know whether he’s right or wrong. I plan to get better educated on the subject … and would welcome hearing from any volunteer tutors out there. I have heard others point out that the “death” of one or another NZ farming sector has often been predicted … yet they all seem to bounce back.

What I do know is that the more diversified our regional economy can be, the more economically healthy and secure we will be. And if we are able to diversify in the direction of higher income businesses and occupations, that would be even better.

That’s the subject of my article — It’s All About Incomes — in the latest Baybuzz Digest. There I argue that simply aiming to increase the average length of visitor stays in HB, which has often passed for an “economic development” strategy, simply isn’t good enough. We should be aiming to create the infrastructure and inducements that will attract higher-paying businesses to the Bay, and many of these would likely not be in the farming/agricultural sector.

In his Guest Buzzmaker article — Living Local, Working Global — now-HB resident Rod Drury, twice NZ’s “Entrepreneur of the Year,” makes a similar point. Says Rod:

“Over the last many years, the Bay has focused on being a great destination for tourists. It is. But it’s also a great destination for attracting new talent. Especially those for whom raising their family is important. Our weather, ease of access and great schools are a competitive advantage and already people are working that out.

I believe Broadband is therefore one of the key investment areas for the Bay. As a region, investing in high speed broadband to make it easier for business owners and managers to operate from here can make us the dream place to live and work – anywhere. The easier it is to do desktop video conferencing, online demo’s, have New York phone numbers, and swap large design files with overseas customers, the more living in the Bay can be a real choice for many more people. Those people bring investment and networks to create more job opportunities and increases wages across the region.”

Amen to that. It’s called diversification … and it’s all about incomes.

Tom Belford

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3 Comments

  1. from what I understand we supply about 1% of the worlds apple crop,being such a small player the apple grower is at the mercy of world makets and forces beyond influence.

    Wine – we have a few big players (by NZ standards) doing quite well.There are many small to medium growers who struggle, the market place dictates – supply and demand – for a number of years there was good demand, not to mention good times which made planting grapes attractive not to mention fashionable.

    Cast your mind back to the 1980s when the government (taxpayer)paid wine growers to pull grapes – go to Europe and you can buy reasonably good quaffing wine from a euro up ( yes I have tasted some of the best wines in the world, not to mention some of the worst) – we have been here before, business is business your business lives or dies by the choices you make. Anyone that goes into business and puts their money on the line are a special species, they have to be to deal with all the complience issues and regulations, not to mention their dollars again. In the process they justify some at HDC, pay contractors and workers, yes create down stream jobs. Special yes,but when they embark on the venture they are aware that the rate of failure is high – if they fail the contractor, HDC employee, certainly move on to the next. Take your hat off to all those who venture into business. Geoff Harman

  2. In reference to the wine industry here in Hawke's Bay…….The planting of hundreds of acres of new vines over the last decade, and many of those coming into production within the last five years means that the volume of grapes and vino now far exceeds market demand. Added to this is the uncertainty around water for irrigation over the mid to long term, a drier climate (3 droughts in Hawke's Bay within the last 6 years), the emerging trend of water miles/water footprints as a determining factor in our major markets and the proverbial hits the fan.

    Our outstanding wines will always be lauded nationally and overseas, but for alot of wine this just aint so. Now we are seeing cleanskin wines being sold with no owner acknowledgment on the labels, and last season some growers here left their grapes on the vines. There's only a certain amount of plonk that can be consumed locally and many of our vineyards are now up for sale. A reliable source has quoted around 50 %.

  3. Aha … it is probably fair comment.

    In respect to economies of scale, there is simply not the production in Hawkes Bay, or indeed New Zealand, to ride the vagaries of the international market place in the longer term. The prices quoted for wines sourced offshore and bottled, are simply not replicable here.

    But then the pesticide residue free movement, the use of aerosols on fruit, will have a 'natural attrition' effect on the local population … so perhaps per capita incomes, locally, will increase.

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