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2009 ThesisBlog.com

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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