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Global Wine Wars: New World Challenges Old

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Introduction

Global Wine Wars: New World Challenges Old With the emergence of New World players in the global wine industry many of the Old World players have been losing market share. At first France, Italy, Spain, and Germany simply laughed at the wine-making techniques of the new players - U.S, South America, South Africa, Australia, and New Zealand. However, it quickly became apparent that the newcomers pose a serious threat to the traditional winemakers. The French were especially hurt when they began to lose their global market share as well as the coveted U.K. market to the Australians. The main issue in this case is the following question: How can France regain and increase its market share in the global wine industry? Analysis The following are the major problems of the French winemakers: 1. Strict AOC regulations One of the advantages that the New World competitors have over France is their innovative culture. France's hundreds of years of tradition are matched by the Australians ability to experiment with different techniques, packaging, and marketing strategies. ...read more.

Middle

However, with wine's extremely long production lag time, the encouraged increase of supply now will create a major lack of demand in the future. Therefore this solution can only be short-term because it creates an uncompetitive culture. If the growers expect the government to buy up all of their excess wine regardless of the quality or market trends, then they will lack the motivation to help themselves. As an alternative, the government should help by providing quality consulting services to the regional wineries which will help them focus on the market 3. Lack of branding and marketing of the French wine, especially Vin de Table category France has the upper hand in the high end of the industry because of its experience. Their commercial wine, however, is not very competitive. That is the wine the French need to focus on because it is the majority of its production. Their marketing efforts should be split into two distinct categories - fine wines and table wines. ...read more.

Conclusion

China can be another promising Asian market because of its potential for sales of great volume. In the long term, the Chinese population can be turned into casual wine drinkers which would boost sales tremendously. Conclusion In the end, the French wine industry will need to naturally level out on its own. The government's help needs to transform from financial help to expert advice. This will allow for healthy domestic competition that will create stronger and more successful global competition. Once the poor growers are weeded out, the remaining ones will have to focus on market demand and consumers' taste to promote their brands. In order for the growers to meet the consumer's needs the AOC should decrease regulation and encourage innovation. Lastly, France should look outside the U.K to expand its customer base instead of limiting themselves to a highly competitive and saturated market. The only way to survive Australia's and the rest of the New World's success is to gain more market share. However, French wine will not gain its market share through fine wines but through lower end table wines that are produced and sold in bulk. ...read more.

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