NZW has welcomed the success of The Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill, proposed by Stuart Smith MP, which passed its first reading with broad support from across Parliament.
We have come a long way since then, but the pandemic continues to impact the industry in a multitude of ways, with vintage 2022 marking the third harvest of living and working with Covid-19.
Prominent in the list of impacts is the closure of the border and the shortage of backpackers, Recognised Seasonal Employer (RSE) scheme staff, and other workers that has resulted. And now, just to complicate matters even further, everyone is thinking about the potential impact of the highly transmissable Omicron variant.
Labour availability issues have been a focus for the industry since the early 2000s, when the vineyard area started to expand rapidly.
Complicating the labour supply issue for the industry is that it is strongly regionally based, often in areas with a small resident population, and unemployment rates below the national average.
New Zealand Winegrowers' (NZW) involvement on labour issues has reflected the interests of the industry, hence our involvement with RSE from the very inception of the programme over a decade ago. But there is no doubt that labour availability has become an increasingly critical issue for the sector the longer Covid-driven border restrictions have been in place.
The past 12 months have seen some positive developments. Along with colleagues in the horticulture industry, we have been able to put our views directly to ministers Kris Faafoi and Damien O'Connor on a regular basis. Through good engagement with the ministers and officials we have managed to get 4,000 RSE workers into New Zealand at a time when the border was effectively closed. We also saw quarantine-free travel for RSE workers from Tonga, Samoa and Vanuatu commencing in October, which has greatly reduced the costs for getting those workers into New Zealand.
Over the past year, we have also increased our support for attracting New Zealanders to the industry. We are working closely with the Ministry for Primary Industries and Ministry of Social Development to highlight careers available in the industry, and to ensure the New Zealand wine industry is an attractive option for Kiwis looking for training or career changes. Our industry is making changes to adapt and promote roles to New Zealanders, including a shift towards increasing permanent roles and scaling back the seasonal roles, higher rates of pay and additional benefits, including accommodation, travel, and meals.
While these are positives, there are real challenges facing growers and wineries:
- In October, Stats NZ announced the unemployment rate in New Zealand had fallen to 3.4 percent in the September 2021 quarter, the lowest level in some time, indicating a very tight labour market. In some of our regions the unemployment rate will be even lower. This makes it very challenging to source an increased number of Kiwis into our workforce - the workers are just not there.
- Given the ongoing border closure, the number of backpackers on Working Holiday Visas in the country is well down on previous years. There are also limits on the number of RSE workers we can get into the country with the current cap being 14,400 workers.
- Competition for those workers who are here is intense. The entire horticulture and agriculture sector is facing labour shortages, and everyone is competing for the same pool of workers. That is driving up the cost of staff.
- And then there is Omicron. The big question is to what extent this will impact the upcoming vintage? There is a lot of contingency planning going on by wineries and growers to manage the risk of Covid-19, which will further exacerbate the labour shortage.
Unsurprisingly the combination of the tight New Zealand-based labour market and restricted access to overseas workers was reflected in the recent Wine Marlborough vintage workforce survey. This showed a shortage of 300 winery cellar hands for the coming harvest, a significant result given many businesses have already adjusted their operating procedures to reduce staffing requirements.
There are no quick and easy answers to these Covid-generated labour supply issues. Longer-term the answer is to employ as many Kiwis as possible and, post-Covid, to get back to more normal border settings. Meanwhile, NZW will be working hard to get as many skilled workers as we can into the country to help address these labour shortages.
Best wishes for 2022.