Global Wine Wars

1815 WordsJan 21, 20158 Pages
How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable? “By the Christian era, wine became part of the liturgical services, and monasteries planted vines and built wineries. By the Middle Ages, the European nobility began planting vineyards as a mark of prestige, competing with one another in the quality of wine served at their tables – the first niche market for premium wine.” The French were the dominant competitors in an increasing global market because they believed in the same old tradition that brought so many of their ancestors’ success years prior. Many consumers…show more content…
There was more fertile land widely available, that was less expensive which promoted the growth of more extensive vineyards. By 2006, the United States had 213 Hectares, Australia had 167 hectares but traditional vine growers such as Italy and France had only 1.3 hectares and 7.4 hectares respectively. The growth in the wine industry in France attracted political attention, and series of regulations for wine producing such as the Appellation d’Origin Controllee (AOC) laws which proposed strict principles for vineyards and wine makers. Similar standards were introduced in Italy which controlled the several aspects of wine production. The new world countries, such as the United States and Australia, did not have production regulations allowing them to deviate from traditional wine making practices and developed different methodologies to increase the yield. Many of the new innovations and better climatic conditions lead the new world countries to produce high quality wine at a much lower cost than their European counterparts. For example, the cost of popular priced wines in France was €238/ton and in Australia the same type of wine was only €137/ton. The new world wine producers experimented with new techniques in grape growing and wine making technology. Unlike French AOC laws, which prohibited the practice of irrigation, controlled drip irrigation systems in Australia allowed expansion into peripheral lands and reduced

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