by Giles Cadman
The global financial crisis has put pressure on all sorts of industries, including wine. Other factors like weather and limited supply have hurt different wine industries around the world.
Andrew Maidment, UK head of Wines of Argentina, told Harpers: “Every country seems to have, to lesser or more degree, their own Achilles’ heel at the moment. The key is how you deal with that while at the same time capitalising on the opportunities that are there for growth.”
This is a sensible point. Exchange rates, weather, and supply vary across the world, and these and many other factors can hurt wine industries.
Gary Greenfield, managing director of Distell Europe, said it is fascinating to see the different challenges that face each of the major wine countries and the impact the overall lack of wine in the global marketplace is having on the industry. “But it all goes round in cycles. New Zealand and Australia have their problems with currency and supply, while Italy and Spain are facing up to wine shortages of their own. For us in South Africa we are seeing we have lost a little ground in many of the key markets like the Netherland and Sweden, but I am confident it will come back.”
Some of the lower cost producers are facing rapidly increasing costs as their economies improve.
The pressures on dry costs and overall supply chain difficulties are also holding back many of the wine countries. Greenfield said the cost base in South Africa, for example, was putting further pressure on growers and farmers and that inflationary pressures were hitting net incomes.
Argentina, added Maidment, is also facing its own dry cost issues and that all wineries were working hard to “keep costs under control”.
House brands buying wine in bulk and selling it through their massive distribution channels also puts pressure on wine industries.
The growth and impact of bulk wine on key wine countries is a key trend at this year’s ProWein. Greenfield said it was a concern that so much wine coming out of South Africa was now being shipped in bulk. “It is a big challenge for our industry. It is imperative, in our view, that we try and keep as much bottling as we can in South Africa. We need it for our industry, for our workers and for the stability of the industry.”
Maidment said that while there were those who “fight against” bulk wine, there is no doubting it is the right commercial model for wineries of a certain scale. “It is important after all that we find the most efficient way to get wines to market at a price that consumers can afford.”
