Global Wine War 2015: New World Versus Old

Global Wine War 2015: New World versus Old
[Name of the Writer]
[Name of the Institution]
[Date]
Global Wine War 2015: New World versus Old
Introduction
The Global Wine Wars: New World versus Old case study demonstrates how the evolution of the new World players in the recent times has resulted in the loss of significant market share of the old World players within the wine industry across the world. The old market players initially snickered at the novel as well as innovative techniques utilized by the new players including, South Africa, New Zealand, South America, United States and Australia; however, it quickly became apparent to them that these new entrants can pose a serious threat to the customary winemakers and their old techniques. The most noteworthy decline in exports was experienced by France, whereas the United Kingdom also lost its dominant share in the global market to the Australian players (Bartlett, 2009; Veseth, 2011).
Moreover, during 19th and early 20th century the established winemakers including France began to confront an assortment of issues like phylloxera that cause significant damage to the French vineyards; thereby, leading to declining in the wine supply while the demand continued to rise. In addition, other issues persist due to lack of control over the entire value chain, increase in tax as well as political barriers to production. At this stage, the New World players started to outshine the existing competitors in the global wine industry as they acquired several benefits in the form of suitable land which was relatively less expensive. Moreover, the same era witnessed significant advancements in the technology which empowered the new players in the global wine market to experiment their winemaking techniques and final products as noted by Black, (2011). These technological advancements resulted in the noticeably lesser production and distribution costs for the New World players in contrasts to the Old World players. In fact, the new entrants in the wine markets also controlled the whole value chain that enabled them to manage quality in a more effective manner. For paradigm, in the competition held in 1976, the quality of wine from California was ranked superior in contrast to France (Bartlett, 2009). This particular paper shed light on the “Global wine War” that initiated in 2015. It highlighted the issues confronted by both old World wine players and new World wine players and proposed suggestions accordingly.
Discussion
Issues and Opportunities
The global wine war among the Australia, France and United States resulted in an assortment of the issues for the three major players, and hence, each is now in search of an efficient strategic restructuring. For instance, the French wine industry witnessed issues because its wines were labeled too costly and at the same time the industry lacks product portfolio diversification. In addition, the winemakers in the country do not acquire innovative marketing strategies. Likewise, the cost of wine production is extremely high in the United States while the demand for the wine products has also lessened in the recent times. Furthermore, Black, (2011) and Eckersley, (2010) pointed out that Australia also confronted several issues pertaining to late penetration in the global wine market as a member of New World players.
On the other hand, the traditional players in the Global wine market also experienced numerous challenges in relation to the shift in the demands of the customers for premium quality wine. For instance, Italy and Spain winemakers did not acquire innovative techniques for producing high-quality wine. On the contrary, the new entrants are unencumbered by regulatory requirements and they have sufficient capacity to produce different forms of wine from a range of vineyards. This gives an edge to the new players to swiftly and effectively respond to the changing consumer trends as noted by Veseth, (2011).
In the year 2001, Italy was the largest exporter of wine in terms of volume and accounted for approximately 27 percent of the wine exported globally. At the same time as Italy has suffered from quality scandals, the winemakers in the country are losing the Chianti-in-a-straw-bottle image. They have also increased the price of their products. Similarly, Germany is the fourth largest Old World producer of wine as well as the sixth largest producer across the globe in terms of volume. However, since 2001, the national production of the German winemakers is declining. The wine market in Germany is chiefly dominated by sweet and inexpensive wines like Riesling that accounted for approximately 80% of the wine production. While Germany has dependably been an expansive winemaker, the populace multiplied at regular intervals amid the 1800's, making demand surpass generation, and by the 1900's Germany was a net merchant. Germany was the fourth biggest consumer of wine universally at 2.0 billion liters of wine in 2001. For a European winemaker, German per-capita utilization is generally low at 24 liters/year and has expanded marginally as of late. Germans are consumer red wine the more significant part of which is imported in. Red wine right now represents 47% of German wine utilization contrasted with 27% out of 1990.
Furthermore, in contrast to the customary wine producers, the new world produced a considerable share in the international wine market due to better control over distribution channels. On the other hand, the traditional wine producers chiefly used the services of small distributors to market their wines which restricted their exposure in the international market. In a nutshell, it can be put forward that the New World producers had better control over the marketing and distrib...