by Francesca Morosi

Created on: May 29, 2008   Last Updated: May 30, 2008

Intro: What are the dynamics of today's world wine market? And what are the marketing strategies available to "old world" wine producers to fight back the pressing competition of the "new world" producers? This report provides a good analysis to answer the above questions

International competition on the wine market is characterized by a considerable disparity of strategies used by the different producers and wine-producing regions around the world.

The objective of this report is to provide an understanding of the competition mechanisms between countries which are traditionally exporters - the "Old World" producers represented by European countries - and the so called "New World" producers which today compete for the supremacy of the traditional model of wine's growing and production.

For hundreds of years the distribution of wine around the world used to depend entirely on the production of the so called "old world" countries; only recently the wine production has started to be more equally distributed and the participation of the "new world" countries in the wine production is now getting more and more significant, with pressing competition on the traditional world's wine producers.

Old World producers are located in Europe. France, Italy and Spain are the main producers, followed by Portugal, Balkan states, UK and Germany. The European countries are still detaining a dominant position and they accounted for 70% of world production and consumption in 1999 (data acquired by Euromonitor).

New World producers are scattered around the world and are represented mainly by Australia, Chile, United States, South Africa, New Zealand, Argentina and Canada.

World wine export are still dominated by the Old World producers, with only three countries (France, Italy and Spain) which account for 60% of the world volumes exports in 2003.

Among New World producers, the largest exports are coming from Australia, Chile and United States. Another interesting characteristic is that the value of wine in exports market are growing at greater rate than volume.

To better understand the position of old world producers in today's world wine market we will take a closer look at France's productions, exports and international image.

France accounts for 20.3% or the world wine production, with one third of domestic production exported to other European countries (UK, Belgium, Germany, The Netherlands) and outside Europe (major clients are United States, Canada, Denmark and Japan). In the most

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