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Tough Times and Opportunity in Marlborough

Last Modified: 23-6-2017 15:14

I was visiting one of my best clients this week, and had to raise the thorny issue of payment. It wasn't their fault, it was that the whole chain of cashflow in the local economy seems to have ground almost to a halt. For a number of years, Marlborough has been riding a wine tsunami that seems to have swept everything in its path, but even tsunamis lose their force. There must be a lot of people wondering "Where to from here?", but Marlburians are a resilient bunch, and undoubtedly the region and the economy will rise again, but what is necessary to take the region on from here?

Looking back over Marlborough's history there have been a fair share of setbacks. Maori raiding parties wiped out both a whaling colony and local Maori in the region yet the whalers came back. Blenheim's alternative names of Beavertown and Te Waiharakeke (flax swamp) underline the flood prone nature of the town for many years.  More recent events include the Farmers fire, and the Boxing Day fires that swept the Wither Hills.

The current crisis affecting the wine industry is nothing new, but as a community Marlburians need to evaluate the situation as a community and work out how to move forward. There is no doubt Marlborough produces excellent wine. Unfortunately so do quite a few other regions in the world, and wine does tend to be one of those luxuries enjoyed by affluent societies, of which there seem to have been a declining number globally lately. Wine has been a green gold for the region, and like other gold rushes, many people have rushed headlong into the industry without carefully evaluating economic realities. With cashflow in the whole supply chain suddenly drying up, those who have thought to milk the fat from production or worse still have invested heavily with borrowed money will have been hit the hardest. Those who have been smart enough to work quickly to pay off debt and build up reserves will pull through. Though only decades old, Marlborough is as established as a global wine region as old world regions like Champagne in France or the Douro Valley in Portugal, and isn't going away any time soon.

There are two keys to moving beyond the current crisis and minimising the damage to the region, diversity and ingenuity. Marlborough already has a strong aquaculture industry and forestry industry although they are not perhaps as trendy as the wine industry. Marlborough has the potential to support many more industries. With a mild climate, and fantastic outdoor recreational areas within easy reach, I'm amazed that Marlborough isn't promoted as a destination for high value, low environmental impact service industries such as software and media development, financial services and so on. Blenheim is only 20 minutes by plane from Wellington, and you can walk or cycle in the time it would take to commute by car in other centres. With the rise and rise of the internet geographical location becomes less important for many high tech industries.

Speaking of high tech, ingenuity is the other key to moving Marlborough forward. The wine industry has been a huge source of employment for people from all over the world, and has given Marlborough quite a cosmopolitan flavour. While it is to be hoped this is not lost, the reality is to compete in the tough market conditions, the wine industry needs to find new efficiencies. Shipping services off to places like China to take advantage of cheap labour is both morally questionable in terms of both human and environmental cost, however taking advantage of new technology to enable New Zealanders to retain reasonably paid jobs in the industry, while improving profitability due to improved productivity is clearly what's needed.

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