Question:Ã¢ÂÂ¢What challenge in the global industry structure and competitive dynamics led France to lose market share to challengers from Australia and other New World countries?Global wine market has undergone great changes during recent years. Besides declining consumption pattern that saw a 25% drop in 1976 to 1990 here has been other impacts why world wine market share pie has been redivided. Let me introduce you to my understanding of past and present of existing situation.
France wine industry has been sleeping on its past laurels and arrogantly refusing to notice changes in global wine industry and more important- changes in consumers, its tastes and consumption habits.
Over the years attempting to protect reputation, quality standards and market by raising entry barriers French wine industry has made for itself tons of laws, regulations, classifications and policies controlling almost every step and aspect of wine making process. The well ment AOC law and VDQS classificatory became an iron corset for French wine makers keeping the industry constrained by embedded traditions and practices.
For example French vintners are prohibited from using irrigation to improve the grape crop, using oak chips to flavor wine, adding sugar or experimenting with non-traditional grapes in making their wine.
Such restrictions do not exist in New World production so the New World vintners, unconstrained by any traditions took the best from Old World production traditions and combining new technologies with innovative approaches were experimenting in both fields of grape growing and wine producing.
Another big issue for French wine industry was lack of uniformity in wine production process. Typically the tasks of grape growing, wine making, distribution and marketing was performed by different entities with differing quality standards and knowledge, making the process long, sometimes unpredictable and expensive. On the other hand New World vintners typically controlled the...