News briefs: Wines ups and downs

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What's on the up and what's going down in the industry this November



11 October 2008

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So far, Chile has been bucking global financial woes by reporting a near 23% increase in bottled wine exports for 2007, with a value increase in exports of over 30%. As expected, 2008 has been slower but up to the middle of the year, value increase had reached 11%. Ireland is now Chile’s 7th largest market, buying well over 1.3m cases at a cost of more than $43m. last year.
One wine country hoping for a bright couple of years is South Africa, as the trade plans to capitalise on the World Cup, being held there in 2010. One innovative project, called Laduma (a Zulu word for goal), has brought Wines of South Africa together with a number of private producers to sponsor a programme for the training of young people in aspects of the drinks and hospitality trade. To raise funds, they’ve launched a special wine brand called Fundi. Some of the range will be sold on international markets and when sufficient funds are raised the label with be withdrawn.


Sales of alcohol have taken a sharp downturn with beer and wine most affected. August was the wickedest month, as sales dropped by 14% for that period alone. Wine sales are down around 7% on this time last year, with some traders reporting beer sales to have fallen by as much as 35% in recent weeks. Christmas may help but, by year’s end, alcohol sales are expected to have fallen by at least 8% on 2007 levels.
Bit of a setback for English wine producers– unsurprisingly, their harvest is seriously down for 2008. Along the Kentish coast, things were not too bad with falls of 20-30% but in the south-west, it seems that quantities may be down by 80%. The worry is that some vineyards will quickly run into financial difficulties if they have no wine to sell. Established wineries are saying generally that they have sufficient quantities to meet demand for the next year but some newer vineyards will need to have decent weather next summer in order to survive.
Some restaurants have reported that wine spending is down with a drift towards house wines and wines by the glass. A fall off in corporate spending has been blamed. Some traders have responded by reducing margins and hoping that falling property prices will soften lease costs. But rises in staple foodstuffs look set to offset other reductions- baking flour has risen by almost half in the last year and rice by even more.



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