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Greeks opt for cheaper and red wine September 28, 2007

Posted by grhomeboy in Business & Economy, Wine And Spirits.
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One of the most important problems that the Greek wine industry is facing is the absence of a register for vineyards and wine producers, the IOBE report suggests.

Wine consumers are gradually turning to lower-priced products imported from countries outside the European Union as well as to private labels, according to a study by the Foundation for Economic and Industrial Research (IOBE). Growth in consumption is expected to continue at least up to 2009.

Bottled wine, particularly red, is the top choice of Greeks. Against this background, imports are showing an average annual increase of 7 percent, while exports are steadily decreasing.

The dynamic entrance to the global market of the so-called “new” countries such as Australia, Chile, Argentina, South Africa and New Zealand, have changed the landscape in the wine market as their production costs are less. Consequently, imports have grown from 20.99 million euros in 1999 to 31.21 million in 2006, whereas exports declined at an average rate of 1.9 percent per year and at end-2005 they totaled 59.67 million, down from 70.27 million in 1999.

The IOBE report shows that domestic demand for bottled wine grew annually at an average rate of 2.3 percent in the period 1999-2005, with turnover amounting to 156 million. In terms of volume, wine consumption is growing at a rate of 7.5 percent annually, while consumption of bulk wine shows a marginal growth of 0.4 percent per year.

Red wine has boosted its market share, from 10.5 percent in 1999 to 21.6 percent in 2005. Wines with Appellation of Origin of Superior Quality have also grown in popularity, from 6.4 percent in 1999 to 10.9 percent in 2005. In contrast, dessert wines are showing a steady annual decline of 7 to 9 percent.

The IOBE report highlights the domination of the industry by five companies with a total market share of 64.5 percent. It adds that the industry faces three main problems: the lack of a register for wine producers, the high prices of local bottled wines in restaurants, and the inadequacy of checks to curb the use in wine production of the same grapes two and even three times.

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