EU wine sector reform approved

The Council of Ministers has formally adopted a wide-reaching reform of the EU wine sector intended to encourage the most inefficient European wine producers to abandon production and to help the sector face up to increasingly tough competition from ‘new world' wines. EU ministers rubber-stamped the agreement on 29 April, four months after EU agriculture ministers reached a political agreement on the deal at their council on December 2007. A key element of the reform package are vineyard ‘grubbing-up' premiums, which will be paid to all wine producers who decide to leave the sector on a voluntary basis – those who are the least efficient are likely to take advantage of the plan. The scheme will last for three years and apply to a maximum of 175,000 hectares of vineyard in the EU. Another plan is to remove some EU-funded market support to the sector by scrapping the ‘crisis distillation' scheme. Each year thousands of litres of unwanted wine are turned into industrial ethanol, a system that soaks up two-fifths of the EU's €1.269 billion annual wine budget. The reform will see the end of crisis-distillation spending in 2012. Under the plans, national governments will be allocated a sum of money to spend on their wine sectors, but spending choices will be limited to a number of measures that the Commission believes will result in an overhaul of the sector. Money can be spent on promoting EU wines abroad, on modernising the production chain and on other measures, including harvest-insurance plans. At the December 2007 farm council, ministers also agreed to reduce the amount of sugar that wine producers can use to fortify their wines. The Commission had wanted to see a complete ban on the use of sugar, which is used mainly in northern European countries, as a way of balancing out an end to the subsidies the EU pays to southern European countries, which use grape must to enrich wine. In the final deal, levels of both sugar and subsidies were cut, rather than scrapped. The EU's share of the world wine trade has been declining over the last decade. At the same time surplus production has been growing, two trends that prompted Mariann Fischer Boel, the EU's farm commissioner, to call for the reform. A Commission impact assessment published in May 2007 said that, without the reform, the annual EU wine surplus could reach as high as 13.9% of production. Moreover, in 2007 the global market share occupied by EU wines stood at 62%, down from an average of 79% between 1986 and 1990, when EU wines where at their most popular, the Organisation International de la Vigne et du Vin wrote in report published on 28 March. During a similar time frame, the market share has grown for ‘new world' wines, from countries including Chile, the United States, Australia and Argentina. “The reform will allow us to concentrate on taking on our competitors and winning back market share,” Fischer Boel said on 29 April. The reform will now come into force on 1 August.

(from http://www.europeanvoice.com/article/2008/04/28april5may/reform-of-eu-wine-sector-approved/60535.aspx)

Italy at the London Wine Fair

After the surge of bad news that has struck during Vinitaly (to read more on this, clik here), Italy appears to be rather determined to defend its market shares on the British market, and, why not, expand them. The London International Wine Fair (LIWF), May 20-22, 2008, sounds like the place to be to do so and most wine regions of Italy have indeed invested in the Fair's program. Workshops and 45 minutes presentations will explain British wine professionals all there is to know about Sardegna, Sicily, Tuscany, Lazio, Lombardia, Piemonte, and Abruzzo, introduced by the most respected Italy specialists in Britain, such as Peter McCrombie MW, Michele Shah et Charles Metcalfe.

(from http://www.vinimarket.com/index_v4.php?elettre=1&langue=en&mode=avb&art_id=53990)

January Italian wine exports to Usa

In January 2008 the Italian wine exports to the United States have declined by 2% in volume, and have increased by 0.7% in value. The data were announced by the Italian Wine and Food Institute, explaining that the continuous strengthening of the euro is seriously penalising the Italian products's exports.

(translated and adapted from http://www.vino24.tv/index.php?option=com_content&task=view&id=1649&Itemid=2)

2007 wine imports in Italy: +17% in volume

Not only the exports of Italian wines have grown in 2007, but also the imports. The growth of our imports were indeed much more pronounced than those of the exports, closing with a +17.3% in volume, and a +20% in value. The significant growth is dued mainly to the increased wine supply from Spain, France, Portugal, the new twelve EU countries as well as from the United States, Chile and Argentina. The average price of imported wines and sparkling wines in 2007 has increased to the level of 2 euros per litre, against 1.96 euros in 2006. From the 26 EU countries was imported 60.4% of wines and sparkling wines, with a volume of 1,041,063 hectolitres and for an equivalent of 286.165.000 euros. The imported musts were 25.929 hectolitres, for an equivalent of 726.000 euros, so our total supplies from European markets amounted to 1,066,992 hl (+19.4%), worth 286.891.000 euros (+20.7%). The positive trend of wine shipments in the Italian market from non EU countries has continued for the fourth consecutive year: the most substantial imports came from the U.S. with 623.713 hectolitres and a value of 50.131.000 euros, followed by Chile with 17.206 hl (+57,7%), Argentina with 14.893 hl (+44,6%), and Australia with 11.077 hl (-11%).

(translated and adapted from http://www.focuswine.it/portal/intxt.asp?idtext=4313&at=89097038S94851930S18970386068331&uid=REGGI565)

Wine sales in Italy according to Mediobanca

We are addressing the different distribution formulas of wine, on the basis of surveys carried out by Mediobanca which has interestingly split the results depending on the type of company (total market or just cooperatives) and product type (all wines rather that only those above 25 euros). The picture of 2007 data when compared to previous years shows: (1) a stabilization of the weight of large distributors, which does not seem to grow more than the market anymore and that is indeed declining in the segment of high price wines; (2) the steady decline of wine shops and wine bars as regards the whole distribution of wines, while they maintain a leading role in the high price wines; (3) the strong growth of alternative distribution methods.The market share of large surfaces reached 43.7%, a bit less than last year (44.2%). Cooperatives as always directed a more significant part on large retailers (about 50% of their products against 51% last year). The decline of wine shops is quite evident from the graph, with their share dropping to 8.3% from 10% in 2006 and 11.5% in 2005. Very similar, although less pronounced is decline of the contrade channel which represents 20%, a bit less than last year. Having said that, you might wonder who grows because all parties we mentioned were down! Direct sales and channel called “others” are taking market share in a significant way, highlighting the increasing role of internet and remote sales.Things turn radically different when we move about the highly price wines (the ones selling for more than 25 euros per bottle). Here the evolution of sales channels is fairly stable, with the large surfaces that seems to have lost further ground moving from 9% to 7% and on-trade channel going from 41% to 44%. The wineries did not shine in 2007, maintaining their very high stake of 28%. The strong growth in direct sales which we noticed for the totality of wine distribution is not evident here, with an increase compared to 2006 (12% vs. 10%) but back to the same level of 2005. Similarly, the other channels do not seem to have had better luck and remain relegated to 8% of the total (compared to 10% in 2006).I include again the two pies with the distribution of wine in Italy. You can see the major role of large surfaces in the sale of wine but not in the high quality wines segment. Looking at this detail, cooperatives seem to segment better their distribution channels: a lot more large retailers for the total wine business, but much less for the really good wines (only 2% compared to 7% for the total of the sample).

(from http://inumeridelvino.it/2008/04/canali-di-vendita-vino-italia-2007-fonte-mediobanca.html#more-1186)

Cantina di Soave buys Cantina di Montecchia

On Wednesday April 24th, the Cantina di Soave winery has merged with Cantina di Montecchia, another important venetian wine cooperative. With this acquisition Cantina di Soave further strengthens its position in the Italian and European market. It owns five production plants, and sells 30 million bottles per year, with a turnover of over 70 million euros. Cantina di Soave has enlarged its social base to 2.200 members, that own 6.000 hectares of vineyards, for a total of one million quintals of grapes produced annually. "We are very happy for this operation - says Bruno Trentini, General Director of Cantina di Soave - becouse it follows a logic of consolidation that becomes more and more indispensable nowadays". Thanks to this acquisition, Cantina di Soave will be able to manage 48% of the Soave Doc total production, 43% of the Soave Classico, and 50% of the Valpolicella denomination. Furthermore it will become the largest producer of Lessini Durello wine. "The acquisition of the Cantina di Montecchia - concludes Attilio Carlesso, new president of the Cantina di Soave - follows a general trend to consolidation between Italian wine cooperatives, with the aim of improving the efficiency of the industry, and of increasing the production quality".

First Berlucchi wine bar in Shanghai

A new Berlucchi Bar has been opened in Shanghai, inside the concept store "Villa Oro", that collects the best of the Made in Italy products. In its first "flagship bar" the sparkling wine producer, based in Franciacorta, sells its entire range of labels, ranging from Franciacorta Metodo Classic to the Tuscan reds and the Gavi produced in the Bollina estate. Villa Oro is a sumptuous residence located in one of the most vivid area of Shanghai, and the "Berlucchi bar" is located at the third and last floor of the Villa, owned by Andrea Mamo, President of Italian Wine & Food, partner of Berlucchi for the import in China. The art direction and the interior of the premises were designed by Lorraine D'Ilio, former creative for Roberto Cavalli and Cacharel, who has choosen furniture inspired by sparkling wine. According to the Institute for Foreign Trade (Ice) the import of Italian sparkling wines in China rose from 0.06 million euros in 2003 to 0.32 in 2007. "The Italian cuisine, with its simple, true, and universal flavors, is very appreciated by the Chinese people. Berlucchi is an Italian brand, that can and must grow in China, but we need to create brand recognition - said Cristina Ziliani, Berlucchi communications director - and Villa Gold, home of the "Italian ars vivendi", is the proper context to attend this goal".
(translated and adapted from http://www.adnkronos.com/IGN/Altro/?id=1.0.2091968902)

The biggest Piedmont wine coop is born

It's called "Tre secoli" (three centuries), and it's the biggest Piedmont wine cooperative, born by the merger between Cantina Sociale di Mombaruzzo (Asti), founded in 1887, and Cantina Terre di Ricaldone (Alessandria). The new company name has been chosen by a jury made up of about forty people among marketing experts, communicators and Italians and foreign traders. The structure will bring together more than 450 members, and will have a total of about 1,300 hectares of vineyards located mainly in the "Nizza" subzone of the classical production area of Barbera d'Asti, and partly in the Alessandria province, where Brachetto d'Acqui, Moscato d'Asti, Asti, Dolcetto d'Acqui and Cortese of Monferrato come from.

(translated and adapted from http://www.focuswine.it/portal/intxt.asp?idtext=4285&at=16207499M16470073V329401465018&uid=REGGI565)

New Ceo in Gancia

Giuseppe Bottero, General manager of the sparkling wine producer Gancia (Canelli - Piemonte), has left. The new Ceo is Paolo Fontana (53 years), who has a degree in Agriculture, has been a Gancia adviser from 1994 to 1997, and has a rich working background, with foreign groups such as Sonoco Alcore-ECB and Philips. The new Gancia CEO will accelerate the internationalisation strategy of the Italian company, trying to penetrate emerging markets such as Russia, China and Korea. The conquest of American consumers began in 2002.

(translated and modified from http://www.ilsole24ore.com/art/SoleOnLine4/Economia%20e%20Lavoro/2008/04/gancia.shtml?uuid=28e8a2b4-09a0-11dd-8614-00000e251029&DocRulesView=Libero&fromSearch)

Demografic trend of wine buyer in Italy

On Food magazine of March appeared a poll, made by Gn Reaserch, who interviewed the responsible of wine buying of the Italian’s family. Today we will analyze the demografic trend of wine buyer in Italy.

Analyze now how the consumption is splitted by age, area, and city size. The data show that almost of the people don’t drink wine and that the consumption of the people younger of 34 is less than 10%. These 2 key fact are worrisome for the future, because they mean a strong reduction of the volume of consumption. This is partially explained by the missing of a marketing and communication strategy turned to gain new consumer and especially the young one. Let’ see where mainly the wine is bought, for area and city type. Here I am surprised by the market shares that still have the producers and the cooperative especially if compared with the market share of the wine shop; It seems that the main competitor of the wine shop is the producer and not the mass market.

(from http://inumeridelvino.it/2008/04/identikit-del-consumatore-del-vino-in-italia-tendenze-demografiche.html)

Renaissance in Asti

Sales of Asti Spumante rose by 11% in 2007 to reach 78.8m bottles. Nearly 80% of that volume is sold off-shore, where shipments were up 13%. “We could hardly hope for more,” commented Emilio Barbero, president of the Consorzio per la Tutela dell’Asti. The most impressive growth was registered in Russia, were sales were up 48% to 7m bottles, making that country the third most important destination for Asti Spumante. Germany with 15.6m bottles (+5.2%) remains Asti’s largest market, followed by the United States, where sales stagnated at 12.4m bottles. Shipments of Moscato d’Asti were also up dramatically. For the first time in history, sales cracked the 10m bar to reach 11.1m bottles.
(from http://wine-business-international.com/News_Renaissance_in_Asti.html#)

The Chianti Classico? Certified by SMS

A messaging service allows you to read the identity card of a wine and avoid unpleasant surprises. The message says everything: vintage, wine cellar, game, alcometric title, dry extract net acidity. An electronic identity card to avoid unpleasant surprises, and above all, once uncorked wine and poured in the cup, have the certainty of drinking an authentic Chianti Gallo Nero, produced and stored as God commanded. From now on, one of the most important wines of Tuscany and Italy whole, the Chianti precisely, will have a system of traceability via innovative mobile. Sending an SMS to 366.3333603 and in the message specifying the serial number and size of the bottle on the status of band classics bottled by 2004, you can have in just a few seconds another sms response with all the information on the bottle in question. A safe way to circumvent counterfeiting, which unfortunately afflict the industry and have the safety of drinking a wine quality. It is a system that we designed to offer a service to the consumer - says Marco Pallanti, president of the Consorzio Chianti classico. It is innovative because it is the first of its kind in Italy, and secure on the traceability of the product. Customers can get information on the entire production, about 40 million bottles a year. The system is multilingual. The sms responds recognizing the international prefix and information starting in Italian or German or English. This service is only the tip of the iceberg of "Search the bottle. "We have worked to achieve a search engine - say the designers of the project presented today in Florence - capable of detecting etihette generality of the Gallo Nero www.chianticlassico.com through the portal. Clicking on the traceability is thus possible to have the same information via computer offered by mobile phone with SMS. In short, more and more hi-tech at the service of taste. 270.000 hectolitres - The numbers of Chianti Classico are multinational: 10 thousand hectares of vineyards, 280 thousand hectolitres produced in 2007 with a growth trend continues. The 30% of the wine is sold in the United States, 27% in Italy, 10% in Germany, 9% in the United Kingdom. Followed by Switzerland (8%), Canada (5%), Japan (5%), Russia (2%).
(translated from http://www.corriere.it/cronache/08_febbraio_19/sms_tracciabilita_chianti_classico_bd3df06c-ded1-11dc-9d37-0003ba99c667.shtml)

Italian sparkling wines

Exports of sparkling wine in 2007 were the main factor driving foreign trade of Italian wines. They grew from 300m to 387m, +29%, with an improvement in terms of both volume (+14%) and price mix (+15%). The post will also provide you details of the first 10 markets of Italian sparkling wines (where we immediately highlight the performance of Spain and Russia) and an analysis of the weight of some markets for the sparkling wine against the weight for bottled wines. The first graph shows the evolution of the value: the blue bars are all up and this means that exports grew in each month compared to the previous year, and the black line stops just a 387m: as you can see visually, growth accelerated in the final months of the year, which are those where exports are concentrated (40% in the last 3 months).The export volumes decreased slightly in December (-16% 110k/hl), bringing the total annual 1.207m/hl, against a level of 1.059m/hl of 2006 and touched a high in the 12 months to November 2007 1228k/hl. The critica market for volumes of sparkling wines is Germany, which suffered a decline in the month of December by 34% after two months with an increase of 10%. If viewed over the year volumes are up about 10% in Germany, even though during the year this growth was reaching 15%. The markets that keep growing volumes are three: the United Kingdom, Spain and Russia, which together cover about 200k/hl year, while the United States are gradually losing strength (+4%) and could go negative during 2008.The mix improved significantly. Enlargin the graph to the long term, we would understand that this is a recovery of a past, because 3.38EUR is not a high level. We have to warn you because these numbers are somewhat’ strange. The mix improved significantly in the last quarter thanks to Spain and the United Kingdom, which showed very high levels (such as to think of an anomaly in numbers).Finally we include detailed numbers for breakdown by nation. As you can see markets that are driving exports are the United Kingdom (doubling in the year), Spain at +132% and Russia at +67%. The United States are still performing well, given the tough exchange rate, while Japan is not performing well, with a 4% decline.The last chart provides you a comparison between sparkling and bottled wines. The % is the weight of the export market for that type of wine. The USA are much more important for still wines than for sparkling wines while Russia works out in the opposite way. The UK market seems more balanced from this point of view. As you can see, in the USA we export 27% of total Italian still wines exports but only 15% of sparkling wine exports.
(from http://inumeridelvino.it/2008/04/esportazioni-di-spumante-italiano-sommario-2007.html)