French fight for stake in UK wine market

By Leah Vyse

- Last updated on GMT

Related tags Cent Terroir Marketing

A 40 per cent increase in marketing funds should help French wine
makers tackle falling sales in the UK and combat the very real
threat from New World wines.

After years of inertia, the French Government is backing the increase in a clear attempt to compete with the more sophisticated marketing strategies of its New World counterparts.

Although France remain the biggest supplier of wine in Britain, supplying 2.6 million hectolitres in 2004, sales of French wine in off-licenses and supermarkets have now been overtaken by Australian wine sales.

France, which is renowned for its poorly marketed products due to its perceived snobbery, can no longer afford to be complacent about the image and reputation of its wine - in 2004 French wine exports fell by 9 per cent and again by 13 per cent in the first quarter of this year.

Other old world wine producing nations, such as Italy, Spain and Germany are experiencing similar problems. In 1994, they controlled 90 per cent of the value of international wine trade, compared to only 64 per cent today.

However Sopexa, an organisation created to champion French food and wine overseas claims that a promotional campaign by Britain's largest retailer Tesco between March and July led to an extra 1.8 million bottles of French wine being sold.

The organisation estimates sales for 2005 may increase by 10 per cent as up to 10 million extra bottles will be sold during 2005 by Tesco.

Sopexa also claims that promotional investment in Britain this year is set to rise by 24 per cent when the Ministry of Agriculture allocated some extra funds, taking the total increase to 40 per cent.

Prior to the government's pledge, a forecast study released by UK by consultancy IWSR indicated the world wine retail sales may increase by 62.5 per cent over the next decade, with retail revenues from wine sales forecast to rise by 23.5 per cent. Most of the growth will occur for wine selling at more than €5 a bottle and this will represent a quarter of consumption in 2008, IWSR said.

French winemakers will also be keen to take advantage of IWSR predictions that consumption per capita in the UK is forecast to rise to 28 litres per person by 2008 from 24.8 litres in 2003, a gain of 12.9 per cent.

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