Wine industry’s open secret is secret no more with the release of the latest wine report by Rabobank, which concludes that the industry is showing signs of recovery but high-end wine sales are still struggling in 2010, with nearly all major global suppliers reporting improved export trends for the first quarter 2010 thanks to an upturn in the global economy.
‘While 2010 will almost certainly prove to be a much better year than 2009 for global wine trade, pricing for super-premium wines has yet to fully recover,’ says executive director Stephen Rannekleiv of Rabobank reportedly " Oversupply is set to remain a key factor determining success in the global wine sector,” he adds.
‘According to the International Organization of Wine and Vine (OIV), wine production exceeded wine consumption by approximately 9% in 2007 and 2008, and with the recession, consumption was believed to have declined twice as fast as production, further widening the gap,’ says the editorial report by Harpers.
"The excess supply constantly available in the market has made it difficult to build solid brands with strong pricing power, creating headwinds for profitability in the sector," says Rannekleiv, according to the report.
The Rabobank projects euro to remain relatively weak for most of this year, with mild improvements starting next year. This could drive European wine imports into the US and may also improve European producers' competitive position against Australia and Chile in the price-sensitive emerging markets which would include India.
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