International Wine Trade Essay

Wine is considered to be one of the traditional drinks that became symbols of many countries. For instance, such countries as France, Italy, Argentina and some others are well-known as major wine producer and wine constitute not only a part of the local economy but also a part of the local culture. At the same time, wine trade was traditionally highly profitable since wine is one of the most popular drinks, though in recent years significant cultural changes resulted in the decrease of the growth of international wine market because of the growing popularity of alternative drinks, such as beer, though, it is hardly possible to speak about the possibility of direct competition between wine and other drinks because historically they are consumed by different customers and, in general, they occupy different niches in the market. Nevertheless, it should be said that the current situation in the wine market may be not perfect and producers of wine can face certain problems since the production of other alcohol drinks and their consumption growth faster, but the major producers and exporters of wine are still in a good position.

At any rate, the major producers and exporters of wine are in consistently better position compared to other countries which produce wine and their position has hardly changed in the course of the time.

In such a situation, it is extremely important to understand the major reasons for such an advantageous position of the major producers and exporters of wine, among which it is possible to name France, Italy, Argentina, Australia, Spain, Greece, the US and some others (Spahni, 144). On analyzing the position of these countries in the world market and the development of their wine industry, it seems to be obvious that one of the major causes of their leadership in the international wine market is the natural conditions. To put it more precisely, wine production is accompanied with significant challenges caused by the lack of opportunities to grow grapes, which is the basic ingredient used in the production of wine, are quite few since this plant needs very specific climatic conditions in which it can grow and in which it is possible to have good crops of high quality (Spahni, 184).

Naturally, in such a situation, countries that meet the basic conditions for growing grapes are in an advantageous position compared to the rest of the world. In fact, even though a country can develop the production of wine it cannot afford the competition from the part of major wine producers if it does not have natural conditions for cultivating grapes.

However, it should be pointed out that in the modern market situation, natural conditions are not the only reason for the dominance of the major wine producer in the world. In this regard, it is possible to add some more reasons which are not less significant than the previously discussed one.

Firstly, it is necessary to underline that the major producers of wine has initially consistently stronger position in the international market because they have a long history of production and sales of wine that means that they have a huge experience in this field.

In commercial terms, this means that the major producers of wine have already gained the larger share of international market. In actuality, there are really little opportunities to enter the market. In fact, the entering barrier is very high in the modern wine industry because of the dominance of the major producers of wine.

Basically, the major producers of wine are recognized in the world and often customers prefer wine produced in particular countries not because of the quality or price but mainly because they get used to the fact that wine produced in such countries as France, Italy, Argentina, and others are considered to be the best. In such a situation, it is possible to speak about the positive customer experience in relation to the major wine producers. At the same time, these countries and companies operating in the wine industry of these countries have already gained popularity and public approval that makes their brand very popular and respectable. It is not a secret that in the modern wine trade the role of brand is of a paramount importance and, what is more, the brand may constitute a significant part of the market value of a company.

Naturally, in such a situation, countries, which do not have natural conditions for cultivation of grapes and, therefore, development of wine industry, nor they have popular brands and experience, are doomed to be in a disadvantageous position compared to the major producers of wine who can benefit not only from the high quality of their wine but also from the popularity of their brands. In such a situation, it should be said that even globalization of the international wine trade does not change the balance of power in the wine market. Even though the cooperation between some major wine producers and the rest of the world is steadily growing, wine produced in the rest of the world cannot be viewed by customers as equal to the wine produced in traditional regions. As a result, there is a substantial gap in price as well as sale rates of wine sold by major producers and by other countries of the world. In addition, it is worthy of mention that local or national markets of the major wine producers also play an important role, which though steadily decreases as the globalization progresses. In fact, the local consumption is quite significant, especially in such countries as France, for instance, where wine consumption is traditionally high and where wine is an essential part of the national cuisine and culture (Taber, 207).

Thus, in conclusion, it should be said that the modern international wine trade is characterize by the dominance of the major wine producers who are traditionally the major suppliers of wine in the international market. Due to the natural conditions, historical and cultural traditions, popularity of their brands, the major wine producers are in a consistently better position than other countries which are practically unable to compete with them in the international market.

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