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New World wines: A threat or an opportunity for French wines

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When it came to choosing a topic for the Marketing project, we quickly concluded on wine for the simple reason that all four of us were wine lovers. And what could be more natural than examining the forces that threaten our wine producing heritage? Indeed, France is today the leading country in terms of wine production. Currently, France is witnessing an erosion in its export shares, internal competition has weakened its competitiveness and, worse, there is even talk of stockpile destruction ; can these be blamed on the new wine growng countries with less than a portion of France's experience in wine growing ?

What are these wines, the Chilean, Californian, and Argentinean ones called the "New World" which now threaten centuries of tradition? What mechanisms have these countries in place to raise doubts as to whether France is truly the wine country par excellence?

To answer these questions, we wanted to first explain the contemporary situation in the wine world, then a quick overview of French wine to emphasize the strengths and weaknesses. Subsequently, we will work to dissect the New World wines to accurately determine the threats to French wine. Finally, as an amateur wine, we wanted to make four proposals that we seem able to solve, at least in part, the difficulties facing French wine today.

Situation of world viticulture
The French domestic market is the world's largest market and is, quite logically, the object of desire. The top six consumer markets are all wine producing countries: Italy,USA, Germany (20 hl), Spain (14 hl), Argentina (12 hl). We must reach the 7th rank to find a non-wine producing country, the UK, with a consumption of 9.1 hl followed by China and Russia with 5.5each hl. There is an increase in world production of wine which causes a drop in wine prices.

If we consider the last twenty years, the increase in world production of wine is a relatively recent trend.The global wine area has greatly reduced from the late 1970s, when it was over 10 million hectares and the mid-1990s, reaching a low of7.7 million hectares (1994).

During this period, the downward trend is almost universal. The planted areas were down 30% in Europe as a result of the European Community policy of uprooting and abandonment by countries of Central and Eastern Europe (CEE), a non-competitive viticulture region. Thevineyard also declined in the United States (-3%), Argentina (-20%), Chile (-2%) and Africa (Maghreb).

After stabilizing around 7.8 million hectares between 1994 and 1997, the curve is rising again. According to figures from IMS, global vineyard areas grew from 164 000 hectares between 1998 and 2000.
Within countries of the Old Continent, sales of New World wines is marginal. France, Spain and Italy are tough markets for the introduction of New World wines. Due to historical and cultural attachment of the Old Continent consumers in regard to their local production, New World wines are able to gain market share in countries that have been traditionally marginal producers.

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