Greek wines go for Olympic gold

Related tags Euromonitor

Greek wine producers are gearing up for an Olympic performance next
year when the eyes of the world turn to Athens for the summer
Games. But while this should help raise awareness of wines, sales
are still likely to be hampered by the high cost.

With Athens hosting the Olympic Games next summer, Greek producers are hoping that the worldwide interest in the country will help raise awareness of their wines - although the almost prohibitively high prices charged for many Greek wines are still likely to keep sales low compared to other European producer nations, claims Euromonitor

The market analysts' research shows that the Greeks spend more on wine than almost any other European nation. In 2002, the average Greek spent US$370 on wine purchases, beaten only by France and Switzerland with respective per capita sales of US$404 and US$380.

While this may at first glance seem surprising, there are a number of factors which converge to ensure that Greek wines are among the highest-priced in Europe, according to Euromonitor.

Although Greeks have been making wine for centuries - long before most other European nations had emerged from the Stone Age - Greece's geography is not suited to the kind of large scale production necessary to make a mark in today's competitive market place.

The vineyards are small and often spread over more than one site, making them hard to cultivate. Furthermore, the stress of growing on a mountainous terrain also causes a Darwinian effect - only the strongest grapes survive. As a result, only relatively small quantities of wine are produced, which means that there are few economies of scale available to growers.

This inevitably impacts on the average unit price of wine, which currently stands at US$15.90 per litre, according to Euromonitor, higher than other producer nations such as New Zealand, France and Italy.

But price is not the only factor affecting expenditure on wine in Greece. Greeks drink wine in relatively large quantities: Euromonitor's latest research suggests that the average person in Greece drinks 29 litres of wine every year, of which 90 per cent is thought to be of native origin. This puts Greek per capita wine consumption above the likes of Australia, New Zealand and the UK.

Yet despite this high penetration in the domestic market, most producers are looking to export markets for real growth - hence the importance of the Olympic Games for showcasing these products to the world.

But European and US retailers have been slow to pick up on the Greek wine phenomenon, according to Euromonitor. Germany is currently the most important market for Greek wine exports, with volumes sales there reaching 13.9 million litres in 2002 - 49 per cent of total exports. The remaining 51 per cent of exports go mostly to the rest of western Europe, led by France and Italy, albeit with a far lower volumes - between 2-2.5 million litres each.

There are a number of reasons for the absence of Greek wines on European shelves, according to Euromonitor. German holidaymakers apart, many consumers are unaware that Greece has a wine industry at all, with relatively little marketing of the wines in major consumer countries - a problem compounded by the fact that New World wines are both better marketed and much more competitively priced.

The language barrier is also one which is harder to overcome, with many Greek wines having names which are difficult to pronounce for western consumers and made from indigenous grape varieties which they do not know, such as Moschofilero and Assyrtiko.

But this is where the Olympics should offer a golden opportunity for Greek wine makers to become known to a wider audience. Companies and associations, in co-operation with the Greek government, have embarked upon a number of ambitious marketing and promotional activities, Euromonitor said, with the hope of raising awareness of the wines and strengthening its image to traditional tourist nations already familiar with Greek wine.

While the level of investment in marketing undertaken by the Greeks may reassure retailers that consumer interest may be piqued, concern will remain over price, Euromonitor claims. With the standard bottle of Greek Chardonnay averaging at around £6.99 in the UK, compared with an Australian equivalent at around £4.49, it will be difficult for Greek wines to compete, particularly in the midst of the current wine glut which has seen retail prices fall.

Thus there remains ambivalence as to whether Greece will be able to convince retailers of the value of stocking its wine. But given the evidence of demand for premium and niche brands within spirits and beer throughout western Europe, the US and Australia, wines which offer a true difference could have potential for growth, particularly for the more informed wine consumer unlikely to be put off by an unknown grape variety or a difficult-to-pronounce name. The question remains whether Greek producers will be able to maximise this marketing opportunity to its full potential.

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