Talks towards establishing an FTA were announced last week in a joint statement by New Zealand prime minister, John Key, European Commission president Jean-Claude Juncker, and European Council president Donald Tusk.

The EU is the wine industry抯 largest export market, accounting for over 30% of exports with a value of over ?00 million.

Philip Gregan, chief executive of the New Zealand Winegrowers, said: 揂n FTA with the EU would be a great outcome for New Zealand抯 wine industry.

揝ecure and competitive access to markets like the EU is fundamental towards achieving industry growth ambitions.?/P>

New Zealand wine exports currently total ?40 million. The industry aims to grow that by some 35% by the end of the decade.

The US accounted for ?55 million of wine exports last year, up 13%. Australia, the country抯 other main export market, shrank 5% to ?51 million.

Sauvignon Blanc dominates New Zealand wine sales abroad, contributing some 85% of its volume.

Total trade between New Zealand and the EU is worth more than ?.3 billion.

The EU is New Zealand抯 third largest trading partner after Australia and China.

Prime minister John Key, said: 揟he EU and New Zealand share a strong and close bond, and today抯 discussions have underlined our mutual desire to further strengthen our relationship.

揑 am pleased that we are able to announce a critical first step towards a FTA that should provide greater access to European markets, and make it easier for Kiwi and EU companies to do business with one another.

揟he EU is a key trading partner for New Zealand. It is also our second-largest investment source, as well as our largest research and development partner.

揥e look forward to working with the EU and its member states on next steps and to starting formal negotiations as soon as possible.?BR>