 Global warming, which is threatening the viability of the drought-stricken wine industry in Australia, could be a boon for neighbouring New Zealand which has been enjoying a growing reputation for its quality wines. New Zealand's subtle flavoured wines, mostly whites such as Sauvignon Blanc but also reds such as Pinot Noir, are appearing on the tables of fine restaurants from London to Los Angeles and are winning medals at prestigious international wine shows. Yet despite success at producing quality wines, New Zealand has long had trouble producing wines in significant export quantities due to its weather. New Zealand is one of the world's most southern countries and frosts and biting winds from Antarctica make it hard to cultivate wine-worthy grapes. But that may change. Higher temperatures due to global warming are expected to make cold areas of New Zealand more temperate and better suited to grape cultivation. So it's no surprise that New Zealand wine-growers are upbeat about a future that includes climate change. "The big picture for New Zealand wine is very, very good," said Philip Gregan, chief executive of industry body New Zealand Winegrowers. Wine is only produced in the warmer, drier areas of the country, mainly Gisborne and Hawke's Bay on the east coast of the North Island, and Marlborough at the top of the South Island. But if temperatures in New Zealand rise by one or two degrees as predicted, then wine growing could spread to other regions of the country which are currently too cold or wet to support grapes, Gregan said. "That is going to expand the range of opportunities available to us, and in some ways it may be a positive for us," Gregan said. "We may be able to expand our range of wine styles or we may be able to grow grapes further up the hillsides." Meanwhile, Australia, New Zealand's biggest competitor in the international wine export market, is facing cuts in production and a drop in quality of its internationally renowned wines due to global warming which has helped bring the country's worst drought in a century and may make some areas too hot and dry for grape cultivation. FINE WINES As the summer sun beats down on his tree-lined vineyard, New Zealand winemaker Clive Paton believes the outlook for New Zealand's burgeoning wine industry looks better than ever as global demand for fine wine mushrooms. "Every year the vintages keep getting better and with that the winemakers are also getting better with age," said Paton, who bought a barren 5-hectare block (12.4 acres) and founded the Ata Rangi label 27 years ago. Ata Rangi is based at Martinborough, a wine growing region just over an hour from the capital Wellington. The small town, nestled in a valley, boasts its own unique microclimate which is hotter and drier than the surrounding regions. But the climate is slowly changing. Paton said he has noticed an increasing number of spring frosts. Cold night temperatures can have disastrous results for young fruit on the vine if they become encased in ice as this will kill the fruit. But these frosts are a double-edged sword, because a large swing between day and night temperatures also helps develop the compounds within grapes that produce richer flavours. As wine-growers navigate weather patterns to produce premium grapes, New Zealand wine is winning an international reputation for premium quality. Low volumes mean that wine-growers must focus on producing high quality wines to turn a good profit. A 2005 study by Rabobank, the Dutch-based bank which specialises in the food and agribusiness, found that New Zealand wines fetched the highest price of "New World" wines on the international export market at an average of $5.25 per litre, followed by $2.92 for Australian wines and $2.17 for wines from the United States. The amount of wine the country can produce is and always will be limited, a factor which adds to the premium image. New Zealand wines account for about 1 percent of the world's wine exports. But if grapes can be cultivated on more of the mountainous, volcanic country then New Zealand could cash in on its newfound reputation as a producer of some of the world's finest whites. Sauvignon Blanc from the Marlborough region have been key in establishing New Zealand's reputation. Brands such as Montana and Kim Crawford and Tohu, which have picked up medals at London's International Wine Challenge, have helped reinforce the image. GROWING EXPORTS Wine-growing in New Zealand is almost as old as European settlement, with the first grapes planted by French Missionaries in the Hawke's Bay region of the North Island in the 1850's. The influence of European immigrants was strong in the early days, with settlers such as Josep Babich from Dalmatia and Nikola Delegat from Croatia planting vineyards and founding labels which still bear their names. For more than a century, wine was only drunk locally, with exports beginning in the 1970's and 1980's. In the last 10 years, the value of wine being exported has grown from NZ$75.9 million to NZ$698.3 million, and the industry predicts it will hit NZ$1 billion ($770 million) by 2010. The number of wineries in New Zealand has also expanded from 90 when Paton started in 1990 to almost 600. Paton's story is typical of the small wineries which dominate the industry. The top four winemakers account for more than 60 percent of production. Paton entered the industry out of a love of wine and a desire to have a go at producing his own. "I'm just as interested in it now than I was then. Perhaps more so with every vintage, because you know you're running out of vintages with age," he said. New Zealand wines are due to the climate, which creates unique flavours in the grapes, and the skill of local winemakers in capturing it in the bottle, Paton said. "New Zealand has carved out a niche for itself through its intensely fruity and vibrant dry whites, especially Sauvignon Blanc," said Tom Cannavan in his online wine review www.wine-pages.com. Sauvignon Blanc, still accounts for most of New Zealand's exports, but other varieties are making a name for themselves, such as the Pinot Noir which dominates Ata Rangi's production. Paton said the Martinborough climate is ideal for producing Pinot Noir, but a slight rise in the temperature would be enough to tip the balance. So Paton has been looking at Syrah, also known as Shiraz, getting to grips with the nuances of an alternative variety, in preparation for a potential shift. "Even if it does rise a half or one degree, it's still going to be a great place for growing grapes," said Paton.