Ep. 1865 Italian wines in New Zealand: an uncompleted success story | wine2wine Business Forum 2023

The Italian wine podcast is the community driven platform for Italian winegeeks around the world. Support the show by donating at italian wine podcast dot com. Donate five or more Euros, and we'll send you a copy of our latest book, my Italian Great Geek journal. Absolutely free. To get your free copy of my Italian GreatGeek journal, click support us at Italian One podcast dot com, or wherever you get your pods. Official media partner, the Italian One podcast is delighted to present a series of interviews and highlights from the twenty twenty three one to one business form, featuring Italian wine producers and bringing together some of the most influential voices in the sector to discuss the hottest top fix facing the industry today. Don't forget to tune in every Thursday at three pm or visit the Italian wine podcast dot com for more information. What's that? Welcome everybody. I think we have a few more people coming in as lunch finishes. My name is Jill Gordon Smith, and I'm an Italian wine expert with Vin Italy Academy. I'm also a wine educator and a small producer in Australia. And, it is my very, very, great pleasure to introduce, Marco, so Marco, Nordio. He was born in Kyos, and Marco lives in New Zealand. So he's lived there for twenty years. So he graduated in monetary economics at the Bocconi University in Milan. And in nineteen ninety seven, he went to America to Cambridge, to study, at the MIT Sloan School of Management. So he has a very good background in finance, as well as a great love for wine. He bought a boat and sailed for three years and ended up in New Zealand. So, in two thousand and four, and it was in New Zealand that he attended a postgraduate masters program in wine, and especially focusing on wine science and actually planted a little nebbiolo vineyard. He has a had a one acre vineyard with Nebula Vines. And then in two thousand and thirteen, he started his own business. It's supported Italian imports, and this is one of the biggest companies in New Zealand for imports for Italian wine. So he oversees our sources and distributes the largest range of Italian wines in New Zealand. In two thousand and nineteen, he organized a very successful first edition of the Vino Italian portfolio a big tasting in Auckland with over a hundred and fifty wines available for tasting and fifteen producers traveling from Italy. So Marco has a very, very good grasp of the industry from both a financial and also from a wine background. In April two thousand and twenty three, he passed the very tough exam organized by Vin Italy International Academy, and he became an Italian wine ambassador. So, I'd like to pass over to Marco for his comments on the New Zealand wine industry, Marco. Thank you very much, Jill. I think I owe you a drink for this, presentation. No. Thank you very much for taking part into this, this presentation of, Italian wines in New Zealand. It's really a pleasure to be here. It's a honor, actually. And I should thank, first of all, Steve Kim and and the fantastic team at the Middle International. About this, wonderful initiative for inviting me. So we're gonna talk about New Zealand wines, and I'm gonna show you first of all, just a preview of what what really we're gonna talk about today. So we're gonna start from the New Zealand snapshot, so a little bit of macro data about the the country we're talking about, what kind of demographics, what kind of a market is in New Zealand, what people like, what people drink in New Zealand. I mean, we talk about New Zealand and wine market, size and structure. Then we're gonna go a little bit more technical. We're gonna work out, try to work out the lending cost for wines imported in New Zealand. And the regulatory framework, what is needed for wines to be sold in New Zealand imported, from overseas. And then a few words about distribution channels, and then we finally some takeaway points. First of all, I would like to, start with, some a couple of surprising cultural links between Italy and New Zealand. Because as you all know, Italy and New Zealand are the two most faraway countries geographically that you can find. But there are two, at least two, at least the one I found, very surprising because they are not very well known in Italy, but they are very, very present in New Zealand about these cultural links between Italy and New Zealand. The first, link revolves around the figure of, Romeo Bragato, who is Romeo Bragato? Romeo Bragato is a Viticulturist that studied in the Conigliano Viticulturist School, We're talking about the end of the nineteenth century. So it was a while ago. He emigrate the first to Australia and then to New Zealand. Where in New Zealand, it became a legend. It is a is basically the Viticulture is a bit kind of outline the future of the Viticulture in New Zealand. It defined the area and the best grapes to plant, and it helped against the, to defend the plans against the Filocera that was the issue at the time. Just to give you an idea, the main Viticulture center, research center in New Zealand is named after Romeo Bragato, and the main Viticulture's conference, which is, this, which is held every year in different cities in New Zealand. It's called the Romeo Bragato conference. Now I don't know how many people you need to really know about, but, definitely in New Zealand is very well present and very well known in the wine industry. The second, the cultural links, very strong, is about the role of a maori battalion during the war in Italy. So the Maori fought for British Army, part of British Army at for the casino battle. It is a very one of the bloodiest battles in the second world war. During both times because it lasted months, they they form a family links with Italians. And there is a museum in New Zealand dedicated to the Maori battalion. One room of a museum is about the casino battle And there are a lot of posters about how Italians were welcoming Mowers. How, how they they they really relay, are they really inter interacted with the Mowers in Italy at the time. Why are we talking about this? Because, first of all, professor Shenza always says they always taught me, during the ambassador course. The wine is a cultural product. First of all, and you need to present it as a as a cultural products. But also, it is important because these points underline the kind of a soft power that Italy has, I'm sure, not only in New Zealand, but worldwide. We have a power of making people already at ease we talk when you mentioned Italy in New Zealand, you are you're welcome with a smile and good memory and very fantastic memories about Italy. So this is already presenting the, importing of wine and specific what we're talking about. Already starting on a good on a good in a good way, and then starting already in a in a very favorable way. Are you enjoying this podcast? There's so much more high quality wine content available from mama jumbo shrimp. Check out our new wine study maps. Our books on Italian wine including Italian wine unplugged. The jumbo shrimp guy to Italian wine, Sanjay Vazzy Lambrusco, and other stories, and much much more. On our website, mama jumbo shrimp dot com. Now back to the show. Okay. Now, we can talk about the technicalities and go more into details about always having this background on your mind, but we have this soft power, very convincing soft power. Okay. So where is New Zealand and how many people live in New Zealand? So five point one million compared to fifty nine million in Italy, and the the population is very concentrated. So Auckland is the main center and the main market because one third of the New Zealand population live in, in Auckland, is where I live. And this is a highly multicultural world. As you can see, fifty percent European descent, but this is a declining percentage. And the thirty percent Asian, which is a growing share and a pretty stable, twenty percent between Pacifica and Maori, Pacifica mean, meaning people from the islands, like, Ratoga, Fiji, and some more. One characteristic of New Zealand, the population is rapidly rising. So you have a two percent, for example, this year, two percent annual increase due to net immigration This is not due to the mentality. It's just immigration, net immigration. There are a lot of new zero that goes overseas that we have an experience, but we all come back later on. Most of them, and then you have the usual traction of New Zealand attracting people from all around the world. So we are in a situation where the population is growing. The market is growing every year. So it's quite different from, from Italy, for example. GDP per capita is very similar to Italy. Sadly, both countries are well below the EU average. What is very important to remember about, New Zealand, New Zealand is a wine producing country. It's relatively recent, seriously producing wines, but it is really a powerhouse as an export, country because, with less than one per percent of the world, the vineyard area. New Zealand is able to represent the number six exporting country worldwide. This is also is due to the quantity exports, but also to the value. It's able to sell it, New Zealand wines have very, very high value. Why is it important to, remember this? Because it's important to remember what New Zealand people are used to drink. They used to drink what their own wines because, obviously, they are used to this. And what what are they producing? Seventy five percent of the production is considered in sovignon blank, one grape. Eighty five of the production is exported, ninety per consequently ninety percent of the export is sovignon blank, and eighty percent of the export goes only to three markets. So it is a bit of, concentrated, a little bit unbalanced situation, but is a sign of, in my opinion, also of how young is the country and how little time there was to really diversify the sale and the production as well. There's a lot of experimentation in, you know, with new grapes, But so far, sovignon has been so successful. It became kind of a benchmark for this grave in New Zealand, sovignon Blanc. You go around the world. You find in all restaurants. Again, why are we talking about this? Because New Zealand drinkers are used to this kind of wines. And if you know Soviet and Blanc from New Zealand, you know this kind of a grassy kind of a greener, fresher, and fruity driven. Not all of them is a bit changing, but the traditional bench mark, Sumignan Blanc is this kind of a style. So New Zealand Drinker in white wines, in particular, they expect that they are they are used to this kind of wines. So it is not easy. And we here, we go to one of the conclusion already. Italian whites are quite different from this type apart from rare exceptions, I will say. So this is a little bit of a challenge in New Zealand, especially with Italian white wines, even if things are a little bit changing. New Zealand is a country that changes quickly, very different again from Italy. So things, get, embraced, and then move on, and then things change quite quickly. But at the moment, the situation is based, but it's a slowly embracing of new styles of white wine, but traditionally they're used to sauvignon blanc. Okay. Now we go down in, with numbers. So we're going to, being a finance guy, I like numbers. You probably will realize at the end of this presentation. So total domestic sales, as you can see, New Zealand share in terms of quantity represent fifty percent of of a wine consumption. So domestic sales, as you can see from the chart, the blue line, in the bottom chart, has been a little bit declining, but stable to slash declining, while, the total wine is a little bit declining. And if you combine with what we said before that the population is rapidly re raising, you will notice, and we'll see in a later chart that the consumption per capita is actually declining of a wine in New Zealand. New Zealand wine is a is a bit declining share in of a domestic market that's going down. So kiwis, Kiwis is what we call New Zealanders. We are embracing more and more international wines. And what is booming is the export to New Zealand wine. So New Zealand is a powerhouse of wine production mainly because of exports. So more and more exports. And then what are they what are New Zealanders drinking? What kind of a style of wine? So we have from this table, we can see in the last five years. We can see that, the most sold wine is again white wine. So forty seven and a half percent of all wine consuming New Zealand is white. Here is altogether imported and the domestic production. Then the second category will be still red wine, about thirty percent. And then we have a sparkling wine. Spartan wine, we can see some very interesting trends here because in the last five years, both champagne, champagne has its own category being so important. And, other sparkling wines, they've been rapidly re raising. So these two categories are really representing, around twenty two percent of the month of the total, but they are growing every year. At the same time, rents are quite stable, thirty percent, while whites are stable. As we said, they're quite stable structure of the consumption quest table. Just to compare with Australia, wine sales in Australia will be nine point six billion of a New Zealand, dollar compared to the size of the market, two two point one billion for New Zealand compared to nine point six for Australia. So the relationship is about one to almost five between, New Zealand consumption and total Australian consumptions. So New Zealand market has a similar share. I don't know if you're familiar with Ireland and Poland, so we're talking about this kind of the size of the market. This is the chart that I was talking before. The wine consumption per capita in New Zealand is declining. On the side, I wrote something, but I've been surprised myself actually to realize how the wine represent only eighteen percent of total alcohol consumption in New Zealand. This is quite low. But again, it's very similar to what happens in Australia and in UK. So beer and the spirits are very, actually the majority of the alcohol consumption. In Italy, just whether a comparison is fifty two, but it's fifty wine represent half of the total alco consumption. So much higher than New Zealand. This is an important difference between the two markets. And then the consumption per capita, as you all know, in Italy is much higher. It's about forty five liters, and in Australia is much higher than, than in New Zealand, again, twenty nine compared to about seventeen for New Zealand. Another important difference in that explains this kind of chart is also the importance of the Italian community in Australia is much bigger than in New Zealand, New Zealand. There are about seven thousand Italians living in New Zealand compared to millions. How many do you? We've probably got about six hundred thousand Italians, I would think. Something like that. It's quite it's quite a high population. I I thought it would be even No. Alright. Oh, in Melbourne. That's only in Melbourne. Okay. Melbourne. That's right. But we have quite a large Italian population. Yeah. Lots of immigrants in the fifties, forties and fifties. So New Zealand, in Australia, people will be more used to more familiar with Italian wines, Italian style. In New Zealand, you really to start from scratch on some situation. They don't know much about Italian wines, but I will say that it's a it's an opportunity. Okay. So how much wine consuming New Zealand is premium? So we have some price range, ranges, some brackets. So value wise, seven percent. So value defined as a five to ten dollar retail price. Standard, thirty two percent, premium, thirty seven percent. So the majority of wines sold in New Zealand is as a retail price of between ten and twenty dollars. Super premium, eighteen percent, ultra premium, four percent, and prestige, one percent. What is important to see the trend? What are people buying? And here we see the trend, recent trends of premium versus commercial wise. Commission wise defined as previously said. So we see and this is something I've been told that you can notice in many countries around the world. So this is not it doesn't seems to be specific to New Zealand. So standard wines are declining. The share is declined from thirty seven to thirty two percent. Premium wines are going up, so thirty five to thirty seven. Super premium are going up even more from fifteen to eighteen. And even ultra premium, I'm going up one percent and prestige one percent. So there is a trend towards a little bit more premium wines in New Zealand. And you probably can confirm if that's true in other markets as well. Marco, can I ask you why do you think that is That's an interesting I think this reflects some social changes because there is, kind of polarization or society worldwide? In my opinion, being having an economic background, I can see that We are people that have and people has not. People have not. And, in New Zealand, that has traditionally a very egalitarian tradition, extremely egalitarian, things are changing. I've been there for twenty years, and I noticed that. So there is a social explanation. Again, wine being a cultural product reflects what the society changes, but what's happening with the society. I don't know what what you think about this. I think there's definitely a bigger divide between the very rich and the middle class is becoming poorer as interest rates go up. It's it's an issue around the world, I think, but definitely would be more noticeable in New Zealand It's a smaller population. Yeah. Absolutely. And then we have a big table here. So now we're gonna go into details about wine imports in New Zealand, and we have table about quantities. So here we talk about volumes. So we can see immediately that Australia represent seventy three percent in twenty twenty three of the total volume of wine imported in New Zealand. Eight percent France, six percent Italy. And if you remember these numbers, you will see the next table. We'll talk about value. They will be very different. Because there's a lot of Australian wine imported in New Zealand, but there's a below average price. And so the percentage will drop dramatically when we talk about value, the value of imports. And what kind of wines are imported? So again, we have white wines, forty nine percent in twenty twenty three. And the trend has been from forty two, as you see, around fifty, forty nine, fifty percent pretty stable. Red wines that are a little bit declining in terms of imports is going down to thirty six sparkling, as we noticed before, has been going up. So from five percent to eleven percent of all imports are sparkling. Champagne itself from two percent to four percent double. And this is kind of a breakdown of the wine imported in New Zealand. And then we have some pie charts underneath, but just summarized. So we are for liters. Again, we have a big share of whites. It's about fifty percent as we notice. And, on the right hand, you have a pie chart that's showing the value, but we show we will see more detail in the table next slide. If you see the pie chart above the value, as you as you can see as the whites, there is a lot of imported chip wide imported in New Zealand because in, you see, in terms of value, you represent much less share than fifty percent. Maybe a little confusing too many numbers, but let's see now. Wide imports in New Zealand. So in this case, we're talking about, value on top. So fifty percent of the value of imported wines come from Australia. So this is down from seventy three as we saw before. France suddenly jumped to thirty one percent because French wines command a higher price, while we all know that. But news Italy is doing very well because actually nine percent of the value of imported wines comes from Italy, and this is higher than quantity wise. So it means the Italian imports have a higher than average price. So it's not the cheapest wine imported from it. It's a higher than average. I remember our other countries. And then we can see what kind of wines are imported from it is. So twenty five million is a total, more than half of imported wines in New Zealand, Italian wines comes as a sparkling and obviously prosecco. And this is something that we already have an important message coming from this table. The New Zealand is importing more than fifty percent of the value of a wine, Italian one imported is prosecco. And, this is again a sign of not only of a success of prosecco that deserves, as a huge success worldwide, but again, I think it's a sign that we are early stages of the Italian wine penetration in, in New Zealand because prosecco, for many importers, not not really in the case of supported Italian from my company because I have a range and cover all regions, but many importing companies in New Zealand, they have only one wine from Italy, only prosseco. So they have their own range of wine plus one prosseco, and that's it. And this is the majority of cases. And this numbers confirm these observations. But again, this is a sign, you know, Proseco is the first one you list on premise, but after that comes, you can spread, then you can introduce a new wine. So, actually, it's a sign of how young is the is the country in this sense. So there's more potential here. And then the second category will be red wines. And as we noticed before, white wines are a little bit struggling, in Italian whites, not only for the different style. And, but again, as having seen that, I think there is an opportunity, and we will see that a little bit later. So in terms of value, again, thirty four percent is the, is the share of important, of imported wines in New Zealand, thirty four. And again, this is similar to Australia and the US. Why do I notice the similarities between New Zealand, Australia, and USA? This is something with Jill we've been talking very a lot. Is it is something that, when we you talk about the small market like New Zealand, it's important to compare with similar markets. This is something I would always encourage, expert manager. It must be, I know a few expert managers here. When you approach an importer like supported Italian, I think it's important, you know, supported Italian will be the experts of the local markets. Definitely, I live there. I know what people drink. I have a feeling about it. But there's not enough exchange in my opinion in terms of, the global market. So, being studying this, I've been preparing this presentation. But I think, an expert managed should, in my opinion, bring this to an import, to an import. They say, look, this wine, so you, that you're gonna try in other markets, similar markets is doing very well. For an importer, it will be very hard to to, to say no to a proposition like that because a very strong point, very strong point. It's not always possible. I I agree. It's not always possible, but maybe you choose a similar wine. I mean, you say, look, similar wines are doing well in Australia. And doing very well in UK because the more the more I studied this, Mark, the more I noticed, the more similarities, there are between these Anglo Saxon in particular markets, the structure and the taste. So this is the point I'm giving you to the export managers. I don't know if you agree to. I do. And I think we, one one of our discussions was what should a good export manager do to be to establish a good relationship with an importer like supporting? Yes. What do you need a good export manager to do? Yes. I I think export manager, should do a little bit of homework in my opinion before approaching. And sometimes, this is a positive thing where I wanna be positive with, the expert is a little bit of luck of that. And you should, maximize your information about the global markets and propose to an a local expert and say, look, this is very good for your market. Not only that, not only in terms of trends or taste, most in terms of positioning in the market, because next slide, we're gonna talk about lending cost, gonna talk about the framework, the regulatory framework. So, I mean, today's technology allows you, I don't know, wine searcher, everyone use wine searcher. You can know, very easily for example, how many Vermentinos are sold in, in New Zealand? What what is the retail price of Vermentino in New Zealand? If you are suggesting me to buy Vermentino, try to see if there is a gap and what kind of price point. I mean, to build the case, a strong case. In a way, you had to do a little bit of work that the the importer should do. But in a, you should I think help the imported to finish with you, to prepare a good picture. I mean, you go when you need to be in a situation where the importers cannot say no to you. This is this is this will be ideal, obviously. It's not always possible. I say, I realized but you can choose similar wine. This is what I would do. Yeah. And so to help you get the wines to market. Yes. So give you some good PR, some marketing materials to do the homework and see where those wines would fit So it really help you so you can't say no. Yeah. Absolutely. Yeah. This is what I will do. Yeah. Maybe my next life, I will be an expert manager so that I'm just getting prepared. Okay. So this is a pie that summarize the value of imported wines, as we saw before, fifty percent Australia down to seventy three in terms of quantity, France more than a quarter of value, and Italy nine percent. Okay. So this is something about the role of sparkling wines, Italian sparkling wines in New Zealand. So Italy makes twenty percent of all sparkling wines in the world in terms of volume. So Italy really powerhouses in terms of the sparkling wines. And, sparkling wines represent ten percent of all Italian wine production. Twenty percent of Italian wine exports are sparkling wines. As you see, this twenty percent, it will be true for my company. I my imports twenty percent is about prosecco, but it's not true for the global for the, New Zealand market because as we said, more than fifty percent of Italian wines are prosecco. So definitely there's a little bit of an imbalance between what's happening in New Zealand and what's happening in the in the global markets for Italian exports. So sparkling wines dominate Italian when you pursue New Zealand, as we say, And, however, the best opportunities may lie in may lie in white and red wines. So tosca and Pimonte are the best prospects, obviously, but it's a grape slice, soave, Vermentino, and Grillo. We have a huge potential for New Zealand, primitive or multiple channel. We are we are already very, very good, but we we can grow even more for reds. And of course, we have many other grapes variety, but I just single out this one because I think they are quite, it's quite clear where the potential for this. Marco, do you think putting your entry level wines under screwcap helps the market in New Zealand? It does. Yes. Actually, it may surprise you, but at entry level, many people in New Zealand don't own a bottle opener. Thank you. This is something. They say, and so you do a testing. They say, I cannot buy. I say, why? I don't have a bottle opener at home. So I gave my bottle opener. I said, look, you buy the wine, you get the bottle opener. So it's something you might not even think, but, you know, New Zealand has been a pioneer of a screwup, especially Kumio River, one of the leading wineries. So there's apps. So it will be absolutely welcome. Actually, one of the soave I import, the from soave, Monte carbonara, just recently, you put all of the production, even the top of soave and the screw cap. And even Bureau Pan was one of the first twenty years ago to send their wines to Australia and New Zealand under screwcap. Exactly. Yes. So, absolutely, it's welcome in New Zealand. Okay. And we go a little bit more technical again. So we're going to calculating lending cost. Because again, when you offer a wine, you will be interested as well just to understand what kind of lending costs will be for the wines that you are proposing. So duty rate is, is quite low. It's five percent only. Then we have a levy HPA This is, health promotion agency levy. This is a levy whose revenues are segregated are gonna be used for, alleviating the problems of alcohol. So it's kind of, counterbalance of the problems that Alco might create from overconsumption. There is a debate in New Zealand. I think it's normally in New Zealand is probably worldwide as well. About increasing this kind of levies on, on wine, to the point of some people say put on a par with tobacco. Probably would not go as high as tobacco, but definitely this levy as it then it will go up in my opinion in the next, in the immediate future. Then we have an excise tax. Excise tax is paid by all wide, and not just imported wines. And this is a fixed dollar amount. So this is regardless of the value of the wine. So, obviously, it has a higher impact on cheap wines. And it is quite high, actually. And again, this goes up, I mean, this is what the the rules say. The regulation, says, reads, say up to fourteen percent, this excise tax above fourteen percent would be much, much higher. Sixty four dollars per, content. Peralco content. We're gonna talk about that later. My experience is that this is, treated in a flexible way. We are not looking specifically the the, New Zealand custom office will not check exactly if a wine is fourteen and a half fifty, but if it is a wine, it will be applied the excise tax of three point five dollars. The problem for higher excess excise tax applies to forty five wines, where for sure like Marcella, there's no way to avoid that. So you're gonna have a higher, much higher. There is a huge difference in lending cost if you import a forty five wines or a normal wine. Then GST will be fifteen percent. And, okay, freight freight, obviously, New Zealand is so far away. It takes about three months. From a moment, you place an order. And the moment you receive the wines in your warehouse, it takes about three months. Sometimes, even more, essentially, it's getting longer because the labeling requirements that we'll see later, you need to order the labels, apply the labels that takes weeks, weeks. So it's more than three months. And the costs are about seven seventy cents to one point five dollar per bottle. This is just the freight from Italy to the port in New Zealand. And, so it depends if you do full container, you will pay less. If you, consolidate, you pay pay more, obviously. A member is best labeling because as we're gonna see later, you need to apply a label, for the wine to be imported in New Zealand. And this is about, ten cents per bottle. And I I'll give you a couple of examples here. So a five euro ex work wine will give you a lending cost of around fourteen New Zealand dollars in New Zealand. A fifty, on the on the contrary, a grappa. So, obviously, a much higher alcohol would give you half a liter. We give a lending cost around fifty five plus fifty. And then you apply the if you wanna work out this will this will be the lending cost for the importer. If you wanna work out how much the importer will be normally selling its wines, Important would would work normally with about thirty percent if you sell to a trade, so b to b, if you sell to a consumer through a website, like I do, my my my website is my number one customer. So when I sell to the website, to my through my website, the GP can be higher. It can it's around fifty percent. So you see from five euros that I paid to the winery in Italy, I will end up with a retail thirty dollars on the website or twenty on my trade catalog. So you already have an idea how you position your wine that you offer if you know this kind of numbers. Yeah. Okay. So we have labeling requirements for wine and other alcoholic drinks. Okay. So I'll go quickly here because there is this website. It's it's quite complex. You should look at this website because there are requirements terms of the size, the color of of the text and fonts, they are all regulated. So it's important to do it accurately. Some of the specific requirements, pregnancy warning label is compulsory. Not just on the bottle, the back of the bottles, but also on the case on the on the cartoon. The on the cartoon, it will be compulsory from the first of February twenty twenty four. Then you need to write the approximate number of standard drinks. And this is a formula. It's zero point seven eight nine times the alcohol content, so thirteen, fourteen percent, whatever is the wine, and then the volume of the container in liters. For example, thirteen percent wine of seven fifty will have a seven point seven standard drink. This has to be written at the back of the label, at the back of the bottle. And what is a standard drink, standard drinks is a way to compare different alcoholic drinks, like a beer or a super spirit or a wine, as in terms to have a standard. For example, one standard drink will be more or less a can of beer, a four percent strength, alcohol strength. When there has to be the name and the physical address of imported, report, and then the GI. And this is an interesting point because GI, New Zealand has just signed a free trade agreement with EU. And one of your requirement that EU asked in New Zealand to comply with was the risk factor of some GI and in particular prosecco. That means that prosecco in New Zealand can be sold only if it comes from Italy. Once this, this free trade agreement is approved by both Parliament, EU Parliament, and New Zealand Parliament. At the moment, there is an agreement. Obviously, this creates a big issue for Australia prosecco because Australia is a producer It is actually a producer that, I'm gonna show you a chart, exports over time. You see the export from Australia to New Zealand. New Zealand is the number one market for Australian Prosecco. Obviously, Australians are not very happy about that, and they are negotiating with EU in terms of free trade agreement. And I think they just walk out. We just walked. They just walked out of the agreement, but they'll they'll come to an arrangement. They will come. Yes. So there are discussions going on. But, obviously, this is very important, possibly an opportunity, a further opportunity for Italian prosecco, because, as if, if all Australian Prosecco had to be replaced by Italian prosecco, Italian prosecco in New Zealand would go up fifty percent theoretically if all Austelian prosecco was replaced by Italian prosecco. So I we're talking about interesting interesting numbers here. And that becomes very interesting in the relationship between Australia and New Zealand because a lot of New Zealand wine goes to Australia. So this is quite a complex negotiation. It is. Yes. It is. For the requirements, So we had to have, so if you state a grape, it has to be seventy five percent of the volume has come from that grape. And if it is a blend, okay, this is quite common, but we also requirements that are in EU. Yeah. And this is an example of a back label imported by Super Italia, the name of importer, physical address, and then the pregnancy warning. You see the size has to be you cannot put a small size. This is regulated. The size, the color, the font, as we said before. So this has to be this is the same in Australia because it's the same regulation, New Zealand and Australia. So be this has to be done. We're almost the same country. Almost the same. Eventually, maybe. Okay. Retailing, we need to be quick, actually. Yes. So retailing, there are two main supermarket chains in New Zealand. One is owned by Woolworth, which is an Australian supermarket. And the other ones is locally owned. And what is it duopoly? It's a little bit of political issue because they we are they are kind of an inquiry in terms of possible collusion. There's not much competition in the supermarket industry in New Zealand. But it's one of the problem of being a small country. There's not much competition, I mean, sometimes. And, but they sell a lot of a lot of wine through supermarkets, especially the, commercial wine where we saw before. So off license account for the largest share of, of all say. So sixty six percent of off license. For example, I noticed that in Italy, on license is much more important than in New Zealand. So, obviously, restaurants in Italy will sell much more wine than restaurants in New Zealand. This is another important difference between the two markets. And then e commerce is very is growing. In New Zealand especially after COVID as they happen worldwide. So the online share is about ten percent and is expected to increase to thirteen point nine percent by twenty twenty seven. Okay. Takeaway points. I hope you had an insight on the consumer preferences of New Zealand drinkers. So how to I hope I give you some hints of what New Zealand drinkers like at the moment and then possible change your possible, possible diversification from the main sauvignon blanc style of it, particularly the white wines. And, familiarity with one important regulation in terms of labeling requirements, understanding the regulatory framework. And, and, of course, you need to comply because this is very important. When estimating the cost implication of importing Italian wise is important for whenever you, trying to sell Italian wise to know where they will be positioned And again, I say wine searcher is is a wonderful instrument. Very easy to to use and find out. And then we have different channels. So the off premise is the main channel, actually, in, in New Zealand, on premise is very is still important, especially for premium wise, but as a lower share than in countries like Italy. I meant to summarize the, the key point that I put in the bold, the end, And it is the reason why I say an uncompleted success story. I explained the title of my presentation, because New Zealand has been the fastest growing, Italian, one has been the fastest growing category of wines in New Zealand. So it italian wines have done very well for the last five years, but it's uncompleted because it's too concentrated on prosecco. So half of imports is prosecco, and probably will even go higher if, the Australian Persek will be replaced by Italian. But having said that, this is an opportunity for red wines to go even even, to spread even more and definitely white wines to grow even more in New Zealand. Yep. It's great. Thank you so much for your presentation, Marco. That was a very interesting insight into the market. We're we're out of time. We're gonna be in trouble if we, go any longer, but thank you so much for your attention. And great thanks to Marco for his interesting presentation. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud, Apple Podcasts, Spotify, Himalaya's them, and more. Don't forget to subscribe and rate the show. If you enjoy listening, please consider donating through Italian wine podcast dot com. Any amount helps cover equipment, production, and publication costs. Until next time.