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THE BUSINESS OF WINE

THE BUSINESS OF WINE Dr. Per V. Jenster Lars V. Jenster Neville Watchurst European Wine Industry "The Business of Wine" represents a unique overview of the modern wine industry and the commercial, political and fiscal pressures under which it operates. The traditional image of the wine trade is of a kind of esoteric gentlemen's club where what little business there is to be done must be conducted before luncheon. Even if that image actually ever did correspond to reality, it certainly no longer has any bearing on fact. The wine business is big business - operating in a global market. Worldwide production of wine in 1991 rose to around 340 million hectoliters - 60% of which was made and around 55% of which was consumed in the EEC. The wine business employs 15% of the total European agricultural work force. The fact, however, that the wine business is so deeply rooted in the European economy does not mean that it is immune to change. The industry is experiencing radical shift on a multitude of levels. Consumer demand is decreasing in many areas of traditionally high consumption and, while it is on the increase in other areas such as the UK, the nature of that demand is in itself changing. Increased customer sophistication, drunk-driving legislation and health awareness are inciting demand for quality over quantity. While such trends pose no threat to the upper echelon of European wines - the Chateau- and Domaine- produced premiers crus - the standard AOC and the vin ordinaire sectors of the market face increasing pressure. The EEC consistently over produces, forcing smaller concerns in the lower two categories to either struggle to upgrade (itself a strictly legislated process), or to become part of a bigger unit with up-to-date distribution and marketing strategies which will ultimately ensure shelf-space for their product. The lower two segments, however, do not only face competition from within the EEC. Although still relatively minor in terms of world total, the wineries of the new world threaten to continue firming-up their market share. Australia and the US for example - each dominated by a handful of highly efficient monoliths - have made considerable inroads into areas such as the coveted UK market. Stylish promotion, prominent branding and the consistency of their mainly varietal-identified wines have earned them the loyalty of a significant section of mid-range consumers. So, while it is, hopefully, still possible to bicycle through Provence unearthing the odd case of undiscovered nectar, the real backbone of today's wine industry lies elsewhere. It is that backbone - its structure and complex functions - that will be examined in detail in "The Business of Wine". SMC Publishing http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Wine Marketing Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0954-7541
DOI
10.1108/eb008611
Publisher site
See Article on Publisher Site

Abstract

Dr. Per V. Jenster Lars V. Jenster Neville Watchurst European Wine Industry "The Business of Wine" represents a unique overview of the modern wine industry and the commercial, political and fiscal pressures under which it operates. The traditional image of the wine trade is of a kind of esoteric gentlemen's club where what little business there is to be done must be conducted before luncheon. Even if that image actually ever did correspond to reality, it certainly no longer has any bearing on fact. The wine business is big business - operating in a global market. Worldwide production of wine in 1991 rose to around 340 million hectoliters - 60% of which was made and around 55% of which was consumed in the EEC. The wine business employs 15% of the total European agricultural work force. The fact, however, that the wine business is so deeply rooted in the European economy does not mean that it is immune to change. The industry is experiencing radical shift on a multitude of levels. Consumer demand is decreasing in many areas of traditionally high consumption and, while it is on the increase in other areas such as the UK, the nature of that demand is in itself changing. Increased customer sophistication, drunk-driving legislation and health awareness are inciting demand for quality over quantity. While such trends pose no threat to the upper echelon of European wines - the Chateau- and Domaine- produced premiers crus - the standard AOC and the vin ordinaire sectors of the market face increasing pressure. The EEC consistently over produces, forcing smaller concerns in the lower two categories to either struggle to upgrade (itself a strictly legislated process), or to become part of a bigger unit with up-to-date distribution and marketing strategies which will ultimately ensure shelf-space for their product. The lower two segments, however, do not only face competition from within the EEC. Although still relatively minor in terms of world total, the wineries of the new world threaten to continue firming-up their market share. Australia and the US for example - each dominated by a handful of highly efficient monoliths - have made considerable inroads into areas such as the coveted UK market. Stylish promotion, prominent branding and the consistency of their mainly varietal-identified wines have earned them the loyalty of a significant section of mid-range consumers. So, while it is, hopefully, still possible to bicycle through Provence unearthing the odd case of undiscovered nectar, the real backbone of today's wine industry lies elsewhere. It is that backbone - its structure and complex functions - that will be examined in detail in "The Business of Wine". SMC Publishing

Journal

International Journal of Wine MarketingEmerald Publishing

Published: Jan 1, 1993

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