Yes I believe that there is a wine glut but in New Zealand's case we are in the position of increased demand from overseas for our wine. We have a different economic philosophy and policy to Canada; in fact a polar opposite and with our lack of protectionism we are able to be innovative and flexible to global demands. Most of the protectist economies that we trade with have higher govt expenditure and debt which are a millstone hanging around their necks. This is because they are having to prop up inefficient industries, such as agriculture in the EU, by the use of extensive subsidies and high tariffs on imports.
Up until 1984 we were one of the most regulated and protectionist economies in the world. In 1984 our exports were predominantly agriculture; mutton, lamb and wool with the govt subsidies and the processing charges at the freezing works more than what the animal was worth. In 1984 with a change in govt, those subsidies were axed literally overnight. There was much tearing of hair, rendering of cloth and gnashing of teeth amongst the agricultural sector, but in the long run it saved the country from being an economic basket case. There were many years of economic pain but we came right and when the 2008 GFC happened we sailed through quite well. It was some natural disasters that took the shine off but now our govt debt sits at about 27%, from memory.
It's a different approach that works for us.
