Globalisation of the world's wine markets

This paper begins with a brief history of wine industry globalisation over the past four millennia and then a review of recent developments. While globalisation is not new to the world's wine markets, its influence over the past decade or so has increased significantly. One indicator of that is the growth in the share of global production that is exported, which in volume terms rose from 15 to 25 per cent over the 1990s and in value terms is now around 40 per cent. While that influence has been very positive for stakeholders in much of the New World (North and South America, South Africa and Australasia), it has presented and will continue to present some serious challenges to Old World producers in both Western and Eastern Europe. Moreover, following a dramatic expansion in their vineyard plantings in the latter 1990s, New World regions too are beginning to face challenges as the grapes from those recent plantings add to the stocks of wine available for sale. Looking forward, the paper then draws on a new model of the world's wine markets that distinguishes non-premium, commercial premium and super-plus premium wines in each of 47 countries or country groups spanning the world. It projects developments to 2005, based on trends in income, population and preferences on the demand side and vine acreage and productivity trends on the supply side of each market. The effect of a slowdown in the global economy in the medium term is also considered. Implications of recent and prospective developments on the key wine-exporting regions are exposed by the model's results. Finally, we explore the possibility that in the case of wine, the forces of globalisation and consequent market responses could well be such as to please both the pro- and anti-globalisation groups, while at the same time allowing both small and large firms in the industry to prosper