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Why is Old World Wine dropping in UK
Rachna Jalan
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TableofContentsWhy is Old World Wine dropping in UK ....................................................................................... 1Executive Summary ........................................................................................................................ 3Aims and Objectives ....................................................................................................................... 4Methodology ................................................................................................................................... 4
Literature Review........................................................................................................................ 4Primary Research ........................................................................................................................ 5Secondary Research .................................................................................................................... 6Conclusions & Recommendations .............................................................................................. 6
Background ..................................................................................................................................... 6The UK Wine Market ................................................................................................................... 10The Old World Wine Producers ................................................................................................... 13
France ........................................................................................................................................ 13Italy ........................................................................................................................................... 14Spain ......................................................................................................................................... 15Portugal ..................................................................................................................................... 16
The New World Wine Producers .................................................................................................. 17Australia .................................................................................................................................... 17United States ............................................................................................................................. 18Chile .......................................................................................................................................... 18South Africa .............................................................................................................................. 18
Analysis of Research and Findings ............................................................................................... 20The Competition Old World versus New World ................................................................... 20The Causes Decline of Old World Wines in the UK Market ................................................ 25
Graphs & Tables ........................................................................................................................... 30UK Wine Market: Value by Country (Off Trade) .................................................................... 30(ACNielsen 2004) ..................................................................................................................... 30Among the top five exporters (by value) of wine in UK market in 2004 we observe that theNew World wine producers contribute 47.5% whereas Old World wine producers for the sameyear have a share of 28.9%. During the same period we find that the New World wine hasgrown by 3.4%, whereas Old World wine has lost the market share by around2%.Comparative Analysis between Old World Wines & New World Wines .......................... 30Comparative Analysis between Old World Wines & New World Wines ................................ 31The UK Wine Market Shares (in percentage) ........................................................................... 32
Chances of re-seizure still alive .................................................................................................... 33Recommendations ......................................................................................................................... 35Conclusion .................................................................................................................................... 38Bibliography ................................................................................................................................. 40
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Executive Summary
The wine market in UK has been the central hub of wine collection from all over the
world. Until recently the Old World economies have been leading in the UK wine market for
supplying the classic wines. However, with the emergence of the New World wine producers
offering a huge array of wine to choose from along with aggressive promotional strategies have
overpoweringly grabbed the market from the hands of the Old World wine manufacturers. The
Old World countries like France which used to enjoy monopoly for decades in exporting its
tradition-rich wines to the UK markets are now being dominated by the New World economies
like Australia with incredible marketing techniques. Factors like poor branding, restricted
labelling, inconsistent quality and inept promotional strategy have together led to the decline of
the Old World wine producers in the UK wine market. To combat this severe threat an intensive
reviewing of attitudes towards brands is exactly what is required for the Old World wine
producers to recapture the wine market in UK from the hands of the New Wold wine
manufacturers. Understanding the consumers needs in todays modern wine market, adopting
clear labelling, recognizing the increasingly stylish wine supply chain, filling the huge
information gaps is exactly what is required from the manufacturers of Old World wines. Hence,
it is only through the union of innumerable small Old World wine producers reviewing their
entire branding strategy that the possibility of their sustainability in the UK wine market prevails.
Key Words: Old World, New World, wine, market, UK, France, Australia, manufacturers,
producers.
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Aims and Objectives
The steadily declining share of the Old World wine producing countries in the UK wine
market due to the dominance of the New World wine producing economies at an alarming rate
has necessitated carrying out the study. The principle objective of the study is to understand and
learn from the parameters that have led to the decline of Old World wine over New World wine
in the UK market. The dissertation also aims to throw light on the rapidly changing wine market
of UK in the recent years. Another aim of the dissertation is to assess the demand for the Old
World wines and to understand the impact of New World wines on the Old World wine market
in UK. The study also intends to put forward a small number of focused recommendations that
can be implemented by actors within the wine industry of the Old World which will help them to
regain their market share in UK.
MethodologyLiterature Review
An in-depth verification of existing documentation (Reference materials, Trade
publications, Consumer magazines, etc.) is carried out in order to avoid the errors committed in
previous researches and avoid duplication of information from past researches. The existing
strategies that are recommended by previous researchers are evaluated on the basis of its
implementability, viability and cost effectiveness. Documents are referred from public and
private sector and the publications available in libraries.
Documents are evaluated in the areas of:
Sectoral changes in the overall Wine Industry in U.K. over the years
International wine markets
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Theories and Articles on Old and New World wines
Promotional literature published by various Old and New world wines manufacturers is
also assimilated and evaluated.
Primary Research
The first step to Primary Research is to define the objective followed by construction of
the questionnaire that will be used to carry out the research. After we construct a suitable
questionnaire we carry out a Pilot Testing. This will include carrying out a sample research
within a randomly selected people. This is primary done to ensure that the questionnaire is
designed in line with the objectives of the research. Now, after we have decided on the
questionnaire we decide on the target sample. In this case, we consider wine drinkers as source
for feedback i.e. we go ahead with Specified Sampling as the means to access data. Now we need
to freeze on the means of carrying out the research, and we decide upon Direct Interviews,
Focused Group Interview and Telephonic interviews. The direct, focused group and telephonic
interviews is carried out with the wine drinker, wine lovers, opinion leaders, pub and bar owners,
middlemen and distributors and different point of sale and also the stakeholders in the wine
industry in order to congregate information in relation to:
Consumer Expectations - Parameters that are considered before buying wine. It includes
the tastes and qualities, brands and labels
Comparison between the Old World and the New World Wines
Comparison in various promotion and advertising done by both the wine manufacturers
and its impact on the consumer
Feedback from restaurants, pubs and supermarkets in demand and preferences of the
customers and themselves
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Feedback from the distributors and retailers on commissions and discounts.
Among the stakeholders the following are included:
Pubs, restaurants and bars
Supermarkets such as Tesco and Sainsbury
Wine merchants
Secondary Research
Data is sourced from related internet sites, journals, online newspapers, periodicals,
books and other academic publications. These sources have provided valuable information
pertaining to:
Differences in promotional approach and other strategies between the Old World and the
New World Wine manufacturers
Current state of the Old World Wine and the future predictions and estimates
Conclusions & Recommendations
On the basis of this assimilated information congregated by following the above steps, a
number of conclusions and suggestions are prepared. The collected data will provide various
changes in consumer habits, tastes and preferences over the years those were tapped by the New
World Wines which lead to its growth over Old World Wine in U.K. These suggestions relate to
the present and future sustainability of the Old World wines in the UK markets.
Background
The UK wine market is recently experiencing a spirit of rebellion that is bubbling up to
challenge conventional tastes (U.K. consumers 1995). Consumer preferences once satisfied
almost entirely by old-line European labels are giving ground to varietals from New World
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vineyards (U.K. consumers 1995). A report by the Agricultural Affairs Office of the Foreign
Agricultural Service in London clearly reflects increased UK wine consumption, continued
growth in imports and diversification away from traditional suppliers (U.K. consumers 1995).
Various European wine producing economies are undergoing tough times (Harrop 2006). France,
Spain, Italy and Portugal, the leading wine producers of the world are gradually losing their
market share in UK, which is a crucial export market for wine (Harrop 2006). The crumple of the
Old World producers share in the UK market has arrived with corresponding export growth in
the chief New World wine producing regions such as Australia, South Africa, the US and Chile
(Harrop 2006). The European producers may find the declining figures hard to swallow but the
ignorance of the present scenario will certainly result in a huge number of disgruntled European
farmers out of work (Harrop 2006).
The wine market in UK acts as a pivot around which substantial wine exports from
almost all the wine producing economies revolve (Old World still facing struggle 2004). The
Old World wine producers who enjoyed almost monopoly some 15 years back are currently
facing vigorous competition from the New World producers (Old World still facing struggle
2004). To combat this severe threat an intensive reviewing of attitudes to brands is exactly what
is required for the Old World wine producers to recapture the wine market in UK from the hands
of the New Wold wine manufacturers (Old World still facing struggle 2004). However, due to
the unrelenting negation of certain Old World economies such as France the British wine market
appears to be dominated by the New World nations (Old World still facing struggle 2004). As
per Richard Halstead of Wine Intelligence, a market research group, France is a classic example
of how Old World producers have consistently failed to understand the consumers needs in
todays modern wine market (Old World still facing struggle 2004). Insistent advertising and
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product uniformity have emerged to be the most important factors for the Old World producers
for lagging behind the New World wine creators such as Australia (Old World still facing
struggle 2004).
According to the recent annual survey of UK wine trade buyers conducted by Wine
Intelligence, very little chances of re-seizure of the UK wine market share from the New World
wine exporters is reflected which leaves a note of caution for the Old World wine producers
(Old World still facing struggle 2004). The survey even predicts a further dropping down of
the Old World wine in UK due to the increasingly stylish wine supply chain in the country (Old
World still facing struggle 2004). According to Halstead, the traditional wine promoting tactics
such as buying a piece of France when one buys a bottle of French wine is no more enough to
lure the more practical UK wine consumers of today (Old World still facing struggle 2004).
Halstead further states the modern British wine market is more enticed by the more rational
factors such as product consistency, packaging and price-quality ratios, all of which together are
enabling the New World wine producers to steadily overtake the Old World countries (Old
World still facing struggle 2004).
As per the 2004 edition of What UK Trade Buyers Want, the New World wine
manufacturers will continue to occupy the top positions in restaurants wine menus as well as on
supermarket shelves as a result of changes in supply chain and the correspondent consumer
demand (Old World still facing struggle 2004). According to Halstead, majority of the trade
buyers have already taken decision to abandon a substantial number of medium and small-sized
suppliers who could not cater to the expected class of service (Old World still facing struggle
2004). The quality of service which the UKs wine market demands today can be achieved only
through frequent observations in the pubs, supermarkets and restaurants enabling the suppliers to
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get the true picture of the market requirements. Most of the European producers fail to prepare
growth strategies based upon the actual understanding of the market needs. Due to the smallness
in size, most of the wine producing countries in Europe undertake exhaustive activities right
from the preparation of wine to its promotion. The New World operators on the other hand, are
generally much larger in size enjoying the benefit of dedicated sales team. The New World wines
are quite often sold through more sophisticated super agencies (for example the UKs Western
Wines) which provides the buyer a single point of contact for a huge array of wines and more
time to understand the retail trade and its expectations clearly (Old World still facing struggle
2004). Such a privilege is rarely availed by the relatively smaller Old World wine producers.
This disadvantage of them is effortlessly sanctioning the slipping out of the wine market in UK
from their hands (Old World still facing struggle 2004).
Halstead rightly states, The fact that, in this day and age, French producers are still
prevented from putting the grape variety on the front of the label is a complete joke (Old
World still facing struggle 2004). This is because the grape variety is a major factor for the
buyers. As per Halsteads advice, the only way of combating the tough competition with New
World wine is reviewing the entire branding strategy of the Old World wines (Old World still
facing struggle 2004).
France remains the biggest supplier of wine in the UK wine market providing 2.6 million
hectolitres (Vyse 2005). However, the sales of French wine in off-licenses and supermarkets
have recently been grabbed by the Australian wine sales (Vyse 2005).
Halstead clearly remarks that the Old World wine producers in order to remain in the
competition need to prepare the wines in accordance with the consumers demands rather than
their own preferences (Old World still facing struggle 2004). The confidence that the New
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World wine manufacturers have generated in the minds of the people through consistent product
quality and reliable supplies has placed them at a far better position that the Old World wine
producers.
The UK Wine Market
Not everyonejostling for space on the UK wine market is going to survive over the next
five years, but those who are to become some of the industrys biggest earners (Mercer 2007b).
In the words of Anne Burchette, the managing director of Castel UK, which owns Oddbins wine
stores, Some companies are not going to survive. People in the middle will find it very hard...
(Mercer 2007b).
As per the report of Vinexpo, the worlds biggest wine and spirits fair and IWSR,the UK
consultancy, consumers in UK are expected to spend more on wine than any of their European
equivalents by 2010, when the retail sales are most likely to cross the 5.5bn mark (Mercer
2007b). Among the world wine markets the UK occupies a pivotal role around which substantial
wine exports from almost all the wine generating countries revolve (Old World still facing
struggle 2004). It is already the worlds largest importer of wine by value (Wine Marketing
Report 2002).The New World (non-European) producers offer almost one-third of the wine
consumed in the UK (World Horticultural Trade 2002). For most of the wine manufacturing
economies UK is a key if not the principal target export market especially for Australia and the
United States (Wine Marketing Report 2002).
The wine market in UK is both brand and price sensitive (World Horticultural Trade
2002). The consumers of UK enjoy the privilege of matchless range of economies of origin and
varietals (Wine Marketing Report 2002). The chief UK supermarket chains monitor the volume
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of the sale (Wine Marketing Report 2002). The consumers of UK are frequently found to buy
more wine at the cost of beer (World Horticultural Trade 2002). The consumption of wine at the
cost of beer has been increasing with per capita consumption up by 40% between 1992 and 2002
(Wine Marketing Report 2002). This trend is expected to grow as more consumers are exposed
to the adaptation of wine culture (World Horticultural Trade 2002). According to the UK wine
consumer profile he or she is over 25 belonging to the upper-middle or middle class (classified as
AB social grade). The UK consumers demanding wine are found to drink more frequently
especially at home (World Horticultural Trade 2002). Supported by steady news of health
benefits the red wine reveals maximum prospects (World Horticultural Trade 2002). The white
wine is now being dominated by the red wine in the UK market reflecting the growing level of
maturity and knowledge of the UK consumers (Wine Marketing Report 2002). In 2001 only, the
total New World wine imports in UK have already increased by 18% (Wine Marketing Report
2002).
In 2005 the wine market in UK was estimated to be of 10.28bn reflecting a quarter
(24.6%) of spending on alcohol in the country (Wine Market Report Plus 2006). This share
increases gradually, but steadily, as British consumer tastes shift away from beer and spirits
towards a more cosmopolitan model of drinking (Wine Market Report Plus 2006). With almost
all wine in the UK being imported the country offers a fiercely competitive marketplace (Wine
Market Report Plus 2006). Every significant wine yielding economy is found to face tough
competition in the UK market (Wine Market Report Plus 2006). The Old World countries led by
France are found to struggle hard to keep pace with the New Wold exporters led by Australia
(Wine Market Report Plus 2006).
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The present UK wine consumption patterns reflect consolidation within the wine
manufacturing industry and explosion of global brands(Wine Marketing Report 2002). Brands
delivering consistent quality at the right price are the preference of the consumers (Wine
Marketing Report 2002). New World wine producers specially Australia and the United States
with big prominent winery brands are steadily capturing the UK wine market eliminating smaller
known wines from conventional European sellers (Wine Marketing Report 2002). The still wine
in the UK market is less in demand (Wine Marketing Report 2002). France is continuously
experiencing a diminishing market share (Wine Marketing Report 2002). Though France topped
the EU bulk revival in 2001 the value of French imports are not expected to pick up (Wine
Marketing Report 2002). Italy and Spain though look like holding on to their value market share
for the time being are increasingly vacating the market in terms of volume (Wine Marketing
Report 2002). Germany is lagging behind more than the others with both its value and volume
increasingly falling (Wine Marketing Report 2002). The rise in the demand of sparkling wine in
the UK market due to the beneficial prices on offer, extensive accessibility and a rising portfolio
resulted in the expansion of such wines in terms of value as well as volume (Wine Marketing
Report 2002). The sparkling wine reflects a highly prospective scenario in the future wine
market of UK as the consumers are adopting its usage for more informal occasions (Wine
Marketing Report 2002). On the other hand, vermouth and other flavored or aromatized wines
are facing less demand in the UK wine market (Wine Marketing Report 2002). The present
market in UK is led by the New World wines and the Spanish Cava (Wine Marketing Report
2002).
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The Old World Wine Producers
The Old World wine producers chiefly encompass the significant wine producing
economies of Europe. The EU wine regime was implemented during Marketing Year 2000/01
with the objective of attaining enhanced quality, greater market orientation and renewed old
vineyards (World Horticultural Trade 2002). There was even an increase of 3.3% in the EU
Budget for the wine industry from 1.292 billion euros in 2001 to 1.335 billion euros by 2003
(World Horticultural Trade 2002). Major Old World wine producing countries have been listed
as follows:
France
The French Ministry of Agriculture reports the 2001 wine crop at 56.2 million
hectolitres, down about 6 percent from the previous level (World Horticultural Trade 2002).
During the first half of 2001 the wine exports of France to UK which stood second during the
year 2000 increased by 39% (World Horticultural Trade 2002). With the view to upgrade the
promotional activities of French wines in the foreign markets the government of France raised
ONIVINS (French Office for Wines and Vines) promotional budget 21% to $10.5 million
(World Horticultural Trade 2002).
Between 1996 and 2006 the French imports in the UK wine market has faced a decline
from a third to fifth of the market (Wine Market Report Plus 2006). French wines are suffering
loss of UK wine markets mainly because their supplies are still fragmented by traditional names
based on region, producer or estate (Wine Market Report Plus 2006). The other drawbacks are
their inconsistent quality and prices that have grabbed the UK wine market from their hands
(World Horticultural Trade 2002).
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It was estimated that with around 40% increase in marketing funds the French wine
producers can tackle the reducing sales in the UK and fight back the very real threat from New
World wines (Vyse 2005). Last year the French government introduced a multi-million euro
rescue plan with the objective of providing aid to its wine industry encompassing 12m export
support and an overhaul of the quality control system (Mercer 2006a). According to the French
Prime Minister Dominique de Villepin the export fund is intended to offer financial assistance
for the creation of a new France wine brand along with encouraging winemakers to unite under
new marketing schemes (Mercer 2006a).The government has offered a total of 90m in
additional funds for its new wine strategy (Mercer 2006a).
Italy
During 2001 wine production in Italy fell by 5% from 2000 to 51.5 million hectolitres
(World Horticultural Trade 2002). This was primarily the result of weather factors along with the
inducements of EU to deracinate vines (World Horticultural Trade 2002). In spite of the constant
curtailment of acreage France is followed by Italy in terms of yield (World Horticultural Trade
2002). Italys aim is the creation of improved quality of wines by restricting yields (World
Horticultural Trade 2002). The current policies focus on the development in production
techniques (World Horticultural Trade 2002). Among the top importers of Italian wine during the
year 2000 the UK occupied a significant position (World Horticultural Trade 2002). The largest
increases in terms of higher-value wine of Italy was sent to the UK market (World Horticultural
Trade 2002).Competition from New World wines has certainly put pressures on endeavours to
expand the Italian market abroad. Planeta, a medium-sized one is an Italian brand which is
innovative and is heading towards the right direction (Harrop 2006).
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What is making the Italian wines suffer in the UK market is the over-concern of the
Italian wine producers about their image (Italian wine in the doldrums 2005).It would be a
humiliating admission of defeat to reduce prices, even if the cellar is stocked sky high with the
last three unsold vintages (Italian wine in the doldrums 2005). The frustrated groan of one
of the longest-serving importers of Italian wine into the UK can be ascertained as, they make
very good wine but they dont look beyond their own nose. They have no idea that everyone else
in the world is producing fantastic wine too (Italian wine in the doldrums 2005). The
Italian wine specialist writer Master of Wine Nicolas Belfrage considers it more important to
strengthen the position as a wine producer that uniquely express Italian character and Italian
grape varieties rather than winning crowns for selling massive volumes of wine (Italian wine in
the doldrums 2005).
Spain
Spain has been covering the maximum area under vines in the world (World
Horticultural Trade 2002). According to the Federacion Espanola del Vino (FEV) the UK
accounted for 14% of the wine sales during 2003 (Price cuts hits 2003). Spains most popular
export wine Rioja has been suffering from huge demand loss due to many years of highly
haphazard prices and deficient harvests (Price cuts hits 2003).. However, in terms of sale Rioja
created a new record in 2006 with total shipments of 261 million litres of wine, an increase of
4.3% over 2005, with exports up by 11% (Tolliver 2007). Maximum volume of Rioja is exported
to the UK wine market which accounts for 35% of all export volumes with a sale of 27.8 million
litres (Tolliver 2007). This reflected an increase by 13.8% which was double that in 2000
(Tolliver 2007). The Spanish Cava which has remained popular in the UK wine market for long
has been currently experiencing falling demand (Tolliver 2007).
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Portugal
The favourable climate and soil conditions facilitate wine production in Portugal
(Wines & Beverages n.d.). UK has been an important export market for Portuguese wine. Wines
sent to the UK market mostly comprise of Port Wine (Wines & Beverages n.d.). Portuguese wine
exports to the UK market increased by 10% in 2005 (Robinson 2006). It is not coincidental in
my view that Portuguese wine has started to do so well in Britain now that Fernando Andresen-
Guimaraes is Portuguese ambassador to Britain (Robinson 2006).
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The New World Wine Producers
The major New World wine producers have been listed as follows:
Australia
The Australian wine industry first established its objectives of setting up wine
markets in the United Kingdom in 1996 (Australian Government 2001). During 2001 the
Australian wine exports was reported by Australian Wine and Brandy Corporation to procure
new value and dimensions records (World Horticultural Trade 2002). The wine market of UK
along with United States alone has been consuming over 80% of the rise and 70% of the
aggregate quantity and value of foreign sales (World Horticultural Trade 2002). General
promotional activities in vital foreign markets most importantly the UK are conducted by
AWEC, a committee of the export promotion arm of the Australian Wine and Brandy
Corporation established in 1991 (World Horticultural Trade 2002). Besides conducting
promotional programs, AWEC also offers recommendations for export, statistical data and
promotional materials (World Horticultural Trade 2002). The Australian wine export industry is
subjugated chiefly by big companies out of which the ten leading exporters alone cover more
than 85% of the gross exports value (World Horticultural Trade 2002).
Between 1996 and 2006, the Australian share of wine in the UK market has
doubled (Wine Market Report Plus 2006). Clear branding and the use of varietalgrape names
such as Merlot or Pinot Gris has primarily contributed to the success of the New World wines in
the UK market (Wine Market Report Plus 2006). Due to their consistent quality and more
affordable prices, the Australian wines have seized the UK wine market from the hands of the
traditional exporters (World Horticultural Trade 2002). Australia offers the leading brands in the
UK market such as Hardys and Jacobs Creek (Wine Market Report Plus 2006).
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United States
The UK occupies the largest share of US wine exports (World Horticultural Trade 2002).
In 2001, the gross value of the total US wine exported to the UK exceeded $169 million (World
Horticultural Trade 2002). Data acquired for the year 2000 reveals that an increase of 10% took
place in the exports of US wines to the UK (Import Export Numbers 2001).. The wines of
United States enjoy the advantage of consistent quality and more affordable prices in UK wine
market (World Horticultural Trade 2002). The country offers popular brands namely Gallo,
Blossom Hill and Fetzer to the UK wine market (Wine Market Report Plus 2006).
Chile
The Chileans too like the Italian wine manufacturers are concentrating on the up-
gradation of the quality of their wine now (World Horticultural Trade 2002). However, rather
than cutting down the yields the Chileans have kept their production stable (World Horticultural
Trade 2002). Existence of pre-phylloxeric seed plants has contributed to huge plantings of
quality wines from strains brought to the country in the 1900s (World Horticultural Trade 2002).
Because of the off late improvements in grape and wine producing technique along with
modernization of equipment and facilities, Chile shares a common position with economies
having more upgraded potential for yield and exportation of fine wines (World Horticultural
Trade 2002).
South Africa
After an impressive growth trajectory South Africas wine export volumes in UK,
the countrys largest and longest-standing export target, are showing a considerable fall in 2007
(2006 A tough year 2007). As per the latest information, South Africas total volumes to the
UK are down 17% year-on-year (2006 A tough year 2007). Major alterations in brand
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ownerships and distributorships in the UK have disturbed the market share of South African
wine (2006 A tough year 2007). The take over of South Africas biggest wine brand, Kumala,
first by Vincor, and then by Constellation has added further to the decline (2006 A tough year
2007). However, the stakeholders of South Africas wine industry are confident to recapture their
lost market share very soon in UK (2006 A tough year 2007). South Africa owns the FirstCape
brand, which belongs to the top 20 wine brands retailed in the UK (2006 A tough year 2007).
The year 2007 is expected to witness big launches of South African wine manufacturers who are
on their way to enter the UK wine market (2006 A tough year 2007).
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Analysis of Research and Findings
The Competition Old World versus New World
With around one-third of the UK wine consumed, arriving from the New World
producers the Old World countries like France are losing their shares in UK market due to tough
competition from the United States and Australia (World Horticultural Trade 2002). Even the
smaller wine producers such as Bulgaria, Portugal and Hungary (irrespective of their lowered
rate of duty) are facing steep competition (World Horticultural Trade 2002). In spite of the brand
and price sensitivity of the UK market, opportunities exist for wines from the Pacific Northwest,
New York, Virginia, and Texas (World Horticultural Trade 2002). In 2006, French wine grew in
UK by only 0.9% (Mercer 2007a).
Off late, a research conducted by Vinexpo reflected Australias victory over France as the
UKs number one wine supplier (Sabadus 2007). During the period 2001 to 2005 when the
imports of French wine to the UK dropped by 7.58%, the imports of Australian wines increased
by 51.7% (Sabadus 2007). It was during this same period when imports of the US wines was
more than doubled whereas the South African wine imports increased by more than 50%
(Sabadus 2007).
Fifteen years ago, the Old World wine producing countries were reported to capture
around 95% of the total market (Harrop 2006). However, the recent dropping of this figure to
almost 45% is undoubtedly a matter of concern for the administrators at the EU (Harrop 2006).
Between 1996 and 2006 when the Australian share of wine imports is reported to be doubled the
French imports during the same period has faced a decline from a third to fifth of the market
(Wine Market Report Plus 2006). Major factor contributing to the success of the New World has
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been clear branding and the use of varietalgrape names such as Merlot or Pinot Gris (Wine
Market Report Plus 2006). What holds the Old World wines from moving ahead along with the
New World wines is that the supplies of the Old World wines are still fragmented by traditional
names based on region, producer or estate (Wine Market Report Plus 2006). The leading brands
in the UK market such as Hardys and Jacobs Creek come from New World countries like
Australia followed by the US, which offers other popular brands namely Gallo, Blossom Hill and
Fetzer (Wine Market Report Plus 2006). Diageo, a UK company already owns Blossom Hill and
Piat DOr (a French brand) while Constellation Brands Inc the worlds biggest wine company of
today has wine collections from the major New World wine producing countries namely the US,
Australia and South Africa (Wine Market Report Plus 2006). The United States along with
Australia due to their consistent quality and more affordable prices has led to a considerable loss
of Frances market share in UK (World Horticultural Trade 2002).
It was reported in 2003 that France remained the biggest supplier of wine in spite of the
expansion in the demand of New World wines in UK (World wine sales 2003). The report of
Vinexpo in association with the UK-based International Wines and Spirits Record (ISWR) rated
France as the still number one during 2003 (World wine sales 2003). Although during the
1990s France underwent considerable loss of market share (from 38% in 1990 down to 28.9% in
2001) a significant rise in the demand for French wines was seen in certain part due to the
existing cross-channel trade (World wine sales 2003). According to the report the sale of
Australian (+87.7%), South African (+69.1%), Chilean (+38.2%) and Spanish (+39.7%) wines
all are rising sine 1997 (World wine sales 2003). In spite of the given data, the report persisted
that the upward trend of French wines in the UK market still appears to continue due to the
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reason of the present and future supply problems of Frances key competitors (World wine
sales 2003).
It is true that France still owns the largest share of wine imports in UK (Tran 2006). As
per the data obtained from HM Revenue & Customs for 2004, France accounted for 20.6%
market share followed by Australias 17.3%, Italys 11.1%, Americas 10.7%, South Africas
8.3%, Spains 8.3% and Chiles 6.1% (Tran 2006). However, the main problem that France is
facing now is that it is losing ground in a growing market along with Spain (Tran 2006).
In 2005 the wine market in UK was estimated to be of 10.28bn reflecting a quarter
(24.6%) of spending on alcohol in the country (Wine Market Report Plus 2006).This share
increases gradually, but steadily, as British consumer tastes shift away from beer and spirits
towards a more cosmopolitan model of drinking (Wine Market Report Plus 2006). With almost
all wine in the UK being imported, the country offers a fiercely competitive marketplace (Wine
Market Report Plus 2006). Every significant wine yielding economy is found to face tough
competition in the UK market (Wine Market Report Plus 2006). The Old World countries led by
France are found to struggle hard to keep pace with the New Wold exporters led by Australia
(Wine Market Report Plus 2006).
In UK sales of white wine staples such as Pinot Grigio and Soave have also
compensated for haemorrhaging demand for fine Italian reds but even so, Italy which was once
challenged only by South Africa, with shrinking total imports already overtaken by those of
Spain and California into the UK (Italian wine in the doldrums 2005). According to
IWSRs forecast Italy is most likely to lose around 37.6% of its export markets mainly to New
World wines by 2008 (Mercer 2005).
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In the recent years, the market dynamics of the pub trade in UK have revealed remarkable
difference from those of the supermarkets (Huddlestone 2006). The Old World economies of
France, Italy and Spain held a kind of dominance they have not enjoyed in the off-trade for close
on 20 years (Huddlestone 2006). However, the latest picture reflects a different scenario in the
on-trade with New World economies led by Australia, the US, Chile and South Africa capturing
a rising share in the UK market (Huddlestone 2006). According to Jane Hunter, marketing
director for Californian giant Gallo in Western Europe, France is really driving the decline in
the Old World, but Italy is up by 5% and thats really driven by Pinot Grigio (Huddlestone
2006). Another expert, Jon Luke, on-trade channel director at Blossom Hill firm Percy Fox
comments, Its not as simple as Old versus New World any more. Italy is on the up and up, but
France is in decline, yet its still enormous (Huddlestone 2006). He further puts that Australia is
in freefall and is mostly expected to be surpassed by the US very soon in the on-trade
(Huddlestone 2006). As per the pub wine statistics in 2006, France is still a huge market but is
being overtaken by Italy as Australia is expected to lose ground to the US in terms of sales
volume (Huddlestone 2006).
Much of the credit for the huge growth of wine market off- late in UK is being given to
the New World wines such as Australia, California and South Africa (Huddlestone 2006). Most
of the New World wines enjoy the advantage of being branded as majority of the consumers are
more comfortable with branded wines as it provides confidence about the quality (Huddlestone
2006). Off late, a research conducted by leading industry monitor Wine Intelligence expressed
that almost 89% of the consumers preferred to buy brands in the on-trade that they locate in the
supermarket (Huddlestone 2006).
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Major factors for the success of Australian wines since 1990 have been summed up as:
(Australian Government 2001):
A united industry, with a common objective towards where it wants to head along with a
wide strategy to accomplish it;
the technological know-how of their wine-personnel;
a culture which facilitates modernism;
quality viticulture and imparting fine training on oenology;
a favourable climate and landscape;
a strong emphasis on the desires and expectations of the consumers.
Sharing close historical ties with UK, the Australian wine-yards easily and promptly
recognized and responded to this booming economic prospective in the UK wine market
(Anderson, 2004: 5). Extensive food-safety awareness became another vital cause for swiftly
swinging the market away from the Old World wine producers (Anderson, 2004: 5). The current
success of Australian wines in the UK market is simply unbelievable where the per capita wine
consumption has revealed a doubled figure each decade since 1960 (Anderson, 2004: 5). From
merely 3 litres a generation earlier, it has shot up to 16 litres per capita (Anderson, 2004: 5). This
aggressive capture of the UK wine market by the New World resulted in only a quarter of
Britains increase in wine imports from Europe during 1990s (Anderson, 2004: 5). In spite of the
increasing potentials in UK wine market, the European suppliers could not match the
sophisticated demands (Anderson, 2004: 5). This was mainly because of innumerable regulations
like restrictions on the particular type of grapes to be used in every label, on highest productions
and content of alcohol, as well as on wine concentration along with guidance schemes
(Anderson, 2004: 5-6). Moreover, manufacturers of wine were also protected from conditions of
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market by cost sustainability in Western Europe and socialist setting up in Eastern Europe
(Anderson, 2004: 6).
Modern wine businesses require considerable time, efforts and money to recognize the
changing tastes of consumers along with promoting and marketing their merchandise (Australian
Government 2001). This exercise has become inevitable due to the growing awareness among
the consumers (Australian Government 2001).With customers becoming more educated and
matured they will never opt for products which are below their expectations both in terms of
quality and price (Australian Government 2001).
The Causes Decline of Old World Wines in the UK Market
The United States along with Australia due to their consistent quality and more
affordable prices has led to a considerable loss of Frances market share in UK (World
Horticultural Trade 2002). Other factors contributing to the success of the New World in
acquiring a large section of the UK wine market has been clear branding and the use of
varietalgrape names such as Merlot or Pinot Gris (Wine Market Report Plus 2006). The Old
World wines are lagging far behind the New World wines as the supplies of the Old World wines
are still fragmented by traditional names based on region, producer or estate (Wine Market
Report Plus 2006).
The stunning export growth of the New World producers is the result of superior product,
exceptional value and comprehensive marketing strategies (Harrop 2006). However, the issue of
New World export success as a result of mere product quality has been a debatable topic (Harrop
2006). It has been said that the initial wave of New World export success has less to do with
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product quality and more to do with the fact that the consumer can actually understand their
labels. The truth probably lies somewhere in between (Harrop 2006).
It cannot be denied that majority of the New World Wine manufacturers adopt a more
strategic approach to marketing their product (Harrop 2006). Aggressive marketing endeavours
were derived out of the enormous competitive pressure imposed on them by the Old World wine
producers who have been dominating the market in the 1980s (Harrop 2006). According to
Rohan Jordan of Colruyt Retail Group Australia has more of a growth strategy, while France
has more of a stability strategy (Mercer 2006b). He further said, unlike the French, Australians
consider industry collaboration of paramount importance and this is applied much more (Mercer
2006b).The New World wineries went on to ask the customers what they actually wanted and set
out to provide them exactly what they desired: a product comprising the qualities of good worth,
uniformity and easy-to-understand (Harrop 2006). Certainly not rocket science, but a winning
formula that has resulted in the emergence of a number of global wine brands marketed in a way
not dissimilar to any other successful commodity (Harrop 2006).
While it seems that brands are taking over the export market, with the top 20 brands in
the UK alone up from 24 million cases in 2003 to 42 million cases in 2005, the Europeans are
still not reacting with the intensity that they should (Harrop 2006). Out of these top 20 brands in
UK only two brands are originally European (Harrop 2006). Apart from a handful of medium-
sized producers that are more pioneering such as Mas Jean Paul, James Herrick and the Italian
brand Planeta that are actually proceeding in the right direction, most of the global brands born
out of Europe are designed and owned by UK and US distributors (Harrop 2006).
The root problem is that It consists of very restrictive labelling laws that prevent the
grape variety from being revealed to the consumer, a regionally structured system that is overly
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complex, EU subsidies that dull the impact of the free market and stave off change, and finally
plain old insularity and resistance to change on the part of the wine makers (Harrop 2006).
These issues oppose not only a successful export strategy but also the new reality of
globalisation in the production of wine (Harrop 2006).
The most common drawback of the Italian wines is that they are not good at explaining
things to outsiders (Italian wine in the doldrums 2005). It seems to be viewed as a sign of
weakness rather than a sensible sales aid to embellish a bottle with a back label that might spell
out which of the eight unfamiliar proper names on the front label is the grape, which the
appellation, where that appellation might be (simply naming the region would be helpful), which
is the name of the producer and which is the brand name dreamt up by same (Italian wine in
the doldrums 2005). French wines are suffering from the same problem. Most of the Old
World wines are going through the problems of over-production, falling consumption and
shrinking export markets which are further contributing to the melting down of these wine
industries (Mercer 2005).
It is a regular complain of the consumer that they rarely get good, inexpensive French
wine (Regulating wine n.d.). This is partly because of the consolidation of the retail market in
the UK with the split between specialist independents and supermarkets growing into a gulf, and
the middle ground of the multiple specialists shrinking (Regulating wine n.d.). The trouble
experienced by the French manufacturers is actually threefold. First of all, the French wine
producers have been production-led rather than market-led (Regulating wine n.d.). They have
less understanding of the markets they are selling to (Regulating wine n.d.). They first produce
their wines and only then they ponder upon the ways of selling their wines (Regulating wine
n.d.). Here is where they lack. The New World producers have worked the other way round.
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They first study the market, understand the consumers expectations and then accordingly
prepare wine that will succeed there (Regulating wine n.d.). Secondly, the French have not
concentrated on the quality across the board (Regulating wine n.d.). This reflects lack of
ambition. For instance, Bordeaux which encompasses massive volumes of largely dismal,
joyless, green wines have persistently suffered due to insufficient demand (Regulating wine
n.d.). Thirdly, restricting the entry of poorer producers from market forces by the AOC
(Appellation di Origine Controli) system is a big mistake long-term (Regulating wine n.d.).
Market forces being a strong incentive to acquire quality there lay no way for the weaker
producers to learn from these qualities due to the no-entry factor (Regulating wine n.d.).
Aggressive advertising and product consistency have emerged to be the most crucial
factors for the Old World producers for lagging behind the New World wine creators such as
Australia (Old World still facing struggle 2004). A recent annual survey of UK wine traders
conducted by Wine Intelligence predicts a further dropping down of the Old World wine in UK
due to the increasingly dynamic wine supply chain in the country (Old World still facing
struggle, 2004).
Majority of the Old World wine producers fail to prepare growth strategies in accordance
with the actual understanding of the market requirements. The Wine producing countries in
Europe are often small-sized that shoulder the burden of the whole process right from the
preparation of wine to its promotion. The New World operators on the other hand, being much
larger in size make the best of their dedicated sales team. The New World wines are
conveniently sold through more sophisticated super agencies such as the UKs Western Wines
offering the buyer a single point of contact for a huge collection of wines along with sufficient
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time to understand the retail trade and its expectations lucidly (Old World still facing struggle
2004). The Old World producers seldom reap such advantages.
According to Halstead, the considerable fall in the price of wine off late, needing the
reverse the deflationary trend has led to the promotion of more expensive wines (Old World
still facing struggle 2004). The New World wines in spite of being more expensive have been
successful to persuade the consumers to opt for them by making them feel as if they belong to a
sophisticated club as per Halstead (Old World still facing struggle 2004). The expensive
factor of New World wines is now their advantage instead of their drawbacks which has been
possible due to the success of direct selling operators such as mail order groups or online wine
traders through better information management (Old World still facing struggle 2004). By
adopting persistently aggressive promotional tactics such as employing off licence managers,
properly trained to convince the buyers by providing them detailed information about the
products, the New World producers are increasingly grabbing the UK wine markets (Old World
still facing struggle 2004). This huge information gap enables the New World wines to steadily
overtake the Old World wines (Old World still facing struggle 2004).
Halstead claims that only through the union of innumerable small Old World wine
producers the huge marketing budgets of the New World wine manufacturers can be challenged
(Old World still facing struggle 2004). But the trouble with this is that there are so many
products lumped together under these brands that maintaining consistent quality is impossible,
comments Halstead. He further states that a single bad experience with one particular poor-
quality of wine prevents the consumer to buy the entire group of that wine (Old World still
facing struggle 2004).
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Graphs & Tables
The following graphs and tables clearly reflect the fall of Old World Wine and the rise of
New World Wine in the UK wine market:
UK Wine Market: Value by Country (Off Trade)
(ACNielsen 2004)
Among the top five exporters (by value) of wine in UK market in 2004 we observe that
the New World wine producers contribute 47.5% whereas Old World wine producers for the
same year have a share of 28.9%. During the same period we find that the New World wine has
grown by 3.4%, whereas Old World wine has lost the market share by around 2%.
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Comparative Analysis between Old World Wines & New World Wines
Parameters Old World Wines New World Wines
Quality Inconsistent Consistent
Branding Poor(Mostly Regional Branding)
Clear
Labelling Restrictive Labelling Laws(Variety of grapes not clearlydistinguishable)
Consumer-Friendly Labelling(Use of varietal grapes names)
Understanding
ConsumersExpectations
Not an important part of the
strategy
Plays a crucial role in planning
for the product
Marketing Strategy Production Driven Approach i.e.first produce and then plan forselling
Market Driven Approachi.e. first understand the marketand then design the product
Advertising &
Promotion
No impetus an advertising andpromotion
Advertising and promotion playsa very crucial role to hit themarketDedicated promotion &marketing team)
Packaging Traditional & Old-Fashioned
(Less Attractive)
Attractive & Modern Packaging
Pricing Lack of good quality wines at fairprices
Justified Price-Quality Ratio(Sometimes Premium Priced)
Competitive Spirits Laid Back Approach(Not Aggressive)
Very Aggressive
Supply Chain Traditional Supply Chain(Broken links between producers,distributors & retailers)
Use of Super-Agencies(Producers, distributors &retailers are well connected andhence dynamic)
Cultural Influence Lesser cultural similarity betweenthe producing regions and the
consumers
Higher cultural affinity betweenthe producers and the consumers
Over-Production
Trap
Not a planned approach toproduction, hence over-production
Understanding, market demandand production thereafteravoiding over-production
Size & Financial
Strength
Small-sized with low budgets(Undertaking of the entire processfrom preparation to marketing)
Big-sized with huge budgets(Work is divided underspecialised workforce)
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The UK Wine Market Shares (in percentage)
For the year 2004
Details Old World Wine Producers
Total
New World Wine
Producers
TotalCountry France Italy Spain Australia
SouthAfrica
Chile
Volume 20.6% 11.1% 8.3% 40.0% 17.3% 8.3% 6.1% 31.7%
(Tran 2006)
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Chances of re-seizure still alive
Recently opportunities have come up for the Old World wines to recapture their lost
shares in the UK market. At the France Under One Roof show held in London this year at the
Lords cricket ground, a distinct whiff of optimism infecting the hall of French wine was realized
(Mercer 2007a). A part of a new French range came from Mont Tauch along with Gerald
Bertrand, an ex-rugby player both belonging to the troubled wine region of Languedoc
Roussillon and both aiming to slip their new wine ranges neatly into retailers in the UK,
encompassing Sainsburys and Somerfield (Mercer 2007a). In the words of Francois Miquel,
export sales director at Gerald Bertrand, I am convinced that French wine will be coming back
in the UK. We have so many different kinds of wine, and I think the market will get bored rather
quickly with only Australian or Californian products, (Mercer 2007a).
According to the latest information collected the recent crop failures in Australia have
resulted in deficiencies of popular grape varieties (Sabadus 2007). The UK wine drinkers have
already been cautioned about the predicted rise in prices of Australian brands (Sabadus 2007).
Several years in which there was an Australian grape glut meant imports were sold at heavily
discounted prices often below 5 and put Down Under ahead of more traditional wine-
producing countries such as France and Italy in the UK market (Sabadus 2007). However, the
2006-7 growing season, which underwent countrywide drought, harsh frosts, bush fires and
plagues of locusts have compelled some of Australias biggest suppliers to issue a warning over
prices (Sabadus 2007). According to the suppliers, prices in the UK are most likely to be affected
due to the 30% fall in this years crop (Sabadus 2007). It is being expected that the continuous
oversupply of Australian wine of the previous three to four years will end this year (Sabadus
2007). It is being foretold that there will be a blow on coming years growing season into the
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2008 vintage (Sabadus 2007). This reflects severe pressure on prices during the end of next year
(Sabadus 2007). According to the chief winemaker at Jacobs Creek, With a price increase [in
Australian wines], I think a lot of European producers at the lower end may become more
competitive than they have been in the past (Sabadus 2007). He adds, We are seeing a
significant increase in sales from Italy and Spain and from the lesser-known areas of France. I
think that there is a curiosity to try new things from Europe and that trend will continue
(Sabadus 2007). Though New World wines have significantly conquered the UK market The
Scotsman wine columnist Rose Murray Brown predicts possibilities of changes in this trend
(Sabadus 2007). In his words, this trend is changing and people, as their palate gets more
educated, will move on towards the European style (Sabadus 2007).
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Recommendations
From the above study, it is implicitly clear that the traditional European suppliers have
much to do to regain market share. The Old World economies are required to work extremely
hard in order to stave off the challenge of New World producers in the years to come.Pulling
out thousands of hectares of vines at a huge expense to the tax payer to address surplus capacity
is a temporary solution, if it is a solution at all (Harrop 2006). The Old World wine makers
actually need an education on how to give consumers what they want (Harrop 2006). Brands that
convey consistent quality at a justified price are always desired by the consumers (Wine
Marketing Report 2002).
France which is renowned for its poorly marketed products due to its perceived
snobbery, can no longer afford to be complacent about the image and reputation of its wine
(Vyse 2005). The Confederation of French Wine Co-operatives (CCVF) has recently taken up
the task of swift and radical restructuring throughout the industry with a new emphasis on selling
wines (Mercer 2005). The CCVFs action plan reflects the acceptance of aggressive marketing
strategies, which have been overlooked throughout (Mercer 2005). The co-operatives claim, By
re-building our industry around the concept of strong brands, we will be able to re-launch
ourselves on the market (Mercer 2005). This new move reflects the growing adoption of anglo-
saxon marketing models by French vintners as the only way to compete with aggressive New
World exporters (Mercer 2005). It can therefore be recommended that all the other Old World
producers adopt this same approach to re-establish themselves in the UK wine market.
It is high time that the traditional wine producers switch over to more dynamic market-
led approach rather than simply following the production-led method which fails to reap
optimum benefits. Quick adoption and implementation of the New World producers strategy of
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understanding the market first and then preparing wine on that basis is the key to gain success.
The Old World wine producers should keep in mind the supply follows demand factor. So the
way forward is for wine producers to understand their markets and make wines that will succeed
in them (Regulating wine n.d.). It is important for the European wine producers to understand
the increasingly stylish wine supply chain in UK. The UK wine market is currently with the
power of the supermarkets to such an extent that in order to sell commercial wines in huge
volumes it is imperative for the Old World wine producers to get their products listed there
(Regulating wine n.d.). The quality of service, which the UKs wine market demands today,
can be achieved only through frequent observations in the pubs, supermarkets and restaurants
allowing the wine sellers to obtain the true picture of the market requirements.
Another good idea is to encourage the small family-owned wine producers to participate
in the export market as much of the interesting wines are prepared by them (Regulating wine
n.d.). Barriers to enter the export markets for the small producers should be withdrawn to
enhance the flow of innovative thoughts (Regulating wine n.d.).
According to some, it is best for commercial French wine production to consolidate with
fewer, more professional, market-oriented producers (Regulating wine n.d.). This can be
achieved by several means. One way is by raising the standards starting right from the vineyards
and extending through the winemaking process (Regulating wine n.d.). The other way is the
assumption of more of a role for producer associations (Regulating wine n.d.). The best
producers can be rewarded with separate bottlings for their wines and the remaining can be
mixed lifting the standard across the board (Regulating wine n.d.). These ideas are offered
from the prospective of producers who hope to succeed in the UK marketplace as it appears
today (Regulating wine n.d.).
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In order to combat the present threat an intensive reviewing of attitudes to brands is
exactly what is required for the Old World wines. Creating proper reliable brands is very
important to recapture the wine market in UK from the hands of the New Wold wine
manufacturers.
It should be kept in mind that consumers must be able to actually understand the label.
The Old World wines restrictive labelling laws such as the French rules which prevents the
producers from putting the grape variety on the front of the label should be revised (Old World
still facing struggle 2004). This is mainly important because the grape variety is a chief factor
for the buyers. Apart from revealing the grape varieties and the flavour distinctly a good
labelling system also requires a producer to list content volume, percentage of alcohol present
and the country of origin to meet standards.
The Old World wine producers in order to come back to their previous positions in the
UK market need to concentrate on insistent advertising and product uniformity. Halstead
suggests that only through the unification of the numerous small Old World wine producers the
giant marketing budgets of the New World wine producers can be confronted (Old World still
facing struggle 2004). The wine firms require a branded as well as private label offering along
with expert staff that is skilled at steering the products through the network of supermarket
negotiations and over the shop shelves (Mercer 2007b).
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Conclusion
The UK wine market has been considered as the most dynamic in the world. It has been
rightly declared as the worlds largest importer of wine by value. The wine market in Britain
therefore stands as the focal point of all thriving wine exporters around the globe. The Old World
wine producing economies chiefly France, Italy, Spain and Portugal until recently occupied the
entire market of Britain enjoying a somewhat monopoly in the UK wine market. However, of
late, this scenario has been significantly changing with considerable shift of the UK consumers
towards the modern wine suppliers of the New World countries. What the Old World wineries
have been having in common recently are problems in the UK market, chiefly due to those pesky
New World upstarts in Australia, United States, South Africa and now even Chile (Mercer
2007a).
Almost one-third of the wine imports of UK currently comprise of the New World
products. These non-European wine producers particularly Australia and the United States with
big prominent winery brands are rapidly grabbing the UK wine market eliminating smaller
known wines from conventional European sellers. Hence, the present wine imports in Britain is
being led by the New World wines while the Old World wine producers France in particular is
facing a diminishing market share.
The Old World wine producing countries such as France has been suffering loss of
market mainly because their supplies are still fragmented by traditional names based on region,
producer or estate. Their inconsistent quality and prices have added to their failure in the UK
market. The other major contributor for the breakdown of these traditional wine suppliers in the
UK wine market has been their production-led approach rather than a market-led strategy.
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Due to their consistent quality and justified prices, the New World wine producers such
as Australia, United States, South Africa and Chile have seized the UK wine market from the
hands of the traditional exporters. These new wine exporters by way of offering popular brands
have been tremendously successful in winning over the confidence of the consumers of UK
which the contemporary wine suppliers have failed to win till date. Not only do the New World
wine producers study the markets and the consumers requirements prior to designing their
products, they even go on to educate the consumers about their products thereby reflecting an
extremely aggressive promotional strategy. Their consumer-friendly labelling along with cultural
resemblance goes a long way in acquiring a strong tie-up with the wine importers of Britain.
The current scenario of the steadily falling share in the UK wine market calls for the
immediate alertness of the Old World wine producers before it is too late to come back. This
requires a thorough observation of the wine markets in UK. For the Old World wine producers to
get their products listed in the UK supermarkets they have to foremost understand what
consumers actually want. The next important approach would be the maintenance of a
standardized quality of wines along with adoption of clear labelling thereby revealing implicitly
the variety of grapes used.
Chances of coming back still exist with France remaining the number one wine supplier
in UK. The European Union along with the individual governments of the Old World countries is
initiating programs for providing aid to their wine exports. They have now recognized that the
time has come to make the consumers of UK realize that after all wine belongs to them.
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