Spanish wine exports boosted by low-price shift

Related tags Spanish wine Table wine

A shift towards lower priced table wines helped lift Spanish wine
exports in the first quarter of the year, but the lower revenues
mean that double-digit volume gains were rather more modest when
converted into value figures.

Data from the Spanish wine association FEV show that first quarter volume sales were some 21.4 per cent higher than in 2003, reaching 340.6 million litres, but that value sales were just 3.8 per cent higher as a result of consumers switching to cheaper variants. A 14.5 per cent drop in the average price per litre resulted in total revenues reaching €329.9 million.

Denomination of origin (DO) wines - traditionally more expensive than table wines - continued to struggle, with sales falling 7 per cent in volume and 4.2 per cent in value, although these declines were partially offset by a 3 per cent increase in the average price per litre.

But while first quarter figures as a whole were disappointing for DO wines, the performance in the last month (March) showed signs of a recovery - sales of DO wines increased by 3.4 per cent both volume and value terms.

Table wine sales, meanwhile, rose by 26.9 per cent in value and 38.5 per cent in volume, with bulk sales in particular performing very well, rising 44 per cent in value and 54 per cent in volume.

Spanish wine exports have blossomed over the last few years, helped by a number of factors. Promotional efforts on the part of Spanish wines - in particular those other than Rioja and cava, both of which were already relatively well known - coupled with quality improvements and, latterly, a surge in interest in the important US market as consumers there registered their disapproval with France's stance on Iraq (and Spain's support for the US intervention there) by switching loyalties.

But the principal problem facing Spanish wine exporters is how to convince the growing number of Spanish wine fans to switch back to more expensive DO wines - especially as the heatwave-hit harvests in both France and Italy last year mean that there will be potentially less competition from Old World rivals this year.

The bulk wine export figures are particularly telling, suggesting that Spain is seen as a cheap, short-term alternative to other wines which may be in short supply, or that, more worryingly perhaps, the quality message is not getting through as clearly as it does for, say, French wines - that more expensive wines are, by and large, of better quality.

Of course, the lower rate of growth in value sales could also reflect the general weakness of the global economy - consumers simply has less disposable income than they did a year ago, and as a result are searching for wines which offer better quality:price ratios.

Either way, the good momentum of Spanish wine exports in recent years is only likely to be maintained through a continued and concerted marketing effort - to convince consumers, in the US and elsewhere, that Spain has more to offer than just Rioja.

Related topics Markets Beer, Wine, Spirits, Cider