THE GREEK WINE INDUSTRY
The demand for wine in Greece
has dropped sharply during the last 15 years, but recently the wine market seems
to stabilize. In 1995/96 wine consumption amounted to 3.2 million HL against 2.6
million HL in 1991/92. Wine consumption represents 20% of total alcoholic drink
consumption (against 34% in 1982). Average per capita consumption of wine in
Greece is estimated at 30 liters annually and remains one of the highest in the
world. However, it is below the E.U. average, which is 37 liters and
approximately half of the relevant figure in France, Italy, Portugal and
Changes in the socio-economic
structure of the Greek family, high pricing, strong competition from alternative
products, as well as the high taxation of alcoholic products are the main
factors affecting demand.
Table-wine amounts for 90% of
total wine consumption, with the traditional retsina accounting for 30% of the
total, although its demand is declining. White wine is increasing its share to
75-80% of the total market, while rose wine lost ground against white wine.
However, rose wines still hold 10% of the market. Finally, whereas demand for
red wine remained rather stable during the 1990/95 period, in 1996 its share of
total demand increased and reached 15%.
Consumer preferences have been
reoriented towards quality wines, such as Domain, Chateau, etc., produced mainly
by small sized firms or in limited quantities. House wines remain nevertheless,
very popular and have recently improved their position in the market, accounting
for about 60% of the total market (especially in the Attica area).
Production has fallen in tandem
with demand, with co-operatives having lost most of their share in favor of
private firms. In 1994/95 production amounted to some 3.9 millions HL, against
4.5 millions HL in 1989/90 and almost 5.5 millions HL in the early '80s.
Generally speaking the wine
sector in Greece is highly fragmented, mostly in small size firms. Co-operatives
mostly produce and sell wine in bulk and, despite their strength in their close
integration with the agricultural sector, they face severe problems in
management and finance. The private sector primarily produces bottled wine, with
an extensive variety of products. Within the private sector there is a small
number of big size traditional producers with large output, well organized
distribution and high levels of exports (TSANTALI, BOUTARI, ACHAIA CLAUSS,
KOURTAKIS, etc.). However, the majority of private enterprises is small or
medium sized, with limited production and distribution capabilities for their
products. Due to the consumption swing towards quality wine they are expected to
grab larger shares of the market. Finally, several small producers in bottled or
bulk wine face problems in the quality and standardization of their products.
Table wine amounts for more
than 90% of the total wine production in Greece, whereas white wine takes up
almost 74%. Although organized firms account for most of the total output, house
wine (primarily destined for self consumption) still gets 40% of it. This part
includes about 180 thousand cultivators of vines.
Viniculture in Greece has been
shrinking at an annual rate of 25% since the beginning of the '80s. This is due
to the eradication policy which has reduced hectares by 30%. This measure has
been adopted throughout EU, in order to reduce productive capacity. Furthermore,
viniculture in Greece has other structural characteristics such as the big-age
and small size vineyards, which are located mainly in the highlands, with
irregular and dense plantations, elements which lead to high production costs
and do not allow absolute control of the quality of raw material.
Viniculture for wine making
accounts for 45% of total viniculture in Greece, out of which table wine is 80%.
This type of plantations has fallen sharply, since the measure of eradication
has been adopted for table wine. Greek viniculture includes 300 unique types of
vine, which are traditionally cultivated in the country. In order to control the
quality and cost of grapes, wine producers usually have their own vineyards, or
they co-operate with cultivators, to get grapes or must or even wine for further
processing. It is noted that raw material is equal to almost 50% of the total
production cost, whereas packaging is 35%.
Wine is one of the most
important agricultural exports of Greece; its value covers more than 50% of
total exports in the beverage sector. Within the last five years wine exports
have been almost equal to 10 times wine imports, so that the trade balance is
positive, with the surplus amounting to 15.4 billion Drs in 1995. The volume of
exports is fluctuating within the last years, reaching 60.8 million lt. in 1995
and representing 1.5%-2% of EU exports and 18% of Greek production. Exports are
highly concentrated in two markets, since Germany and France account for 68% of
total volume, whereas total exports to EU represent 85%-90% after 1990. A vital
aspect is the shift to smaller bottles (under 2 lt.), which account more than
55% of total exports since 1992. In the past larger bottles, wine in bulk and
must represented the core exports. Table wine remains the most important export
category, with its share declining to 74.4% and white wine in big bottles taking
most of it. VQPRD account for 7%, with an exceptional rise in white bottled
wine. Imports still remain in low levels (1%-2% of total consumption), but they
show remarkable growth rates. Sparkling wine and champagne accounted for 34% of
total volume in 1994, whereas until the end of the '80s this was almost the only
import category; other categories, especially table wine, which now accounts for
23% of total imports gained market share; VQPRD accounts for 5% and Vermouth the
Excerpt from a published study in January of 1997 with
subject "The Greek Wine Industry" (No 142) by Ms Chara Messini.
Conducted for the Sectoral Research Department of the Foundation for Economic
and Industrial Research (IOBE). (http://www.iobe.gr/wine.htm)