AROUND THE WORLD

USA – In contrast to Australia’s situation, it seems that the California grape surplus – and the price-cutting it generated – could be coming to an end…Sweden – Wine and beer duty might continue to rise in the UK, but the Swedish government is proposing to cut taxes on beer and wine by 30% next year…

Americas

USA

In contrast to Australia’s situation, it seems that the California grape surplus – and the price-cutting it generated – could be coming to an end in most counties in the north of the state. However, a record 2004 harvest on the Central Coast has delayed the price recovery, which has declined 20% since 2000. The Central Valley, however, the region that has faced the most severe price-cutting in recent years, this year saw average prices rise for the first time since 1999, to US$467 per ton.

Chile

Chile’s largest wine producer, Viña Concha y Toro, has reported a rise of 19.5% in total revenue for 2004 to Ch$188,207m (US$338m), while net income for the year increased 19.1% to Ch$22,689m. CEO, Eduardo Guilisasti comments, “In addition to strong financial performance, our brand enjoys strong recognition and consumer preference. Export growth of 33% in value (US$) and 29% by volume in 2004 is a clear indication of our strong competitive position.” The domestic market saw an annual sales increase of 17.6%. Concha y Toro also recently acquired the main assets of Viña Francisco de Aguirre. Guilisasti says, “We believe this acquisition will have a positive effect on the company’s results. These assets are strategically important in the present situation of strong sales growth.”

Europe

Italy

Wine sales in Italy are on the rise as consumption reached 1 billion bottles last year, rising 8m bottles against 2003, according to recent figures from Italian farmers’ union, Coldiretti. Red wines accounted for 56% of the total with 600m bottles, while white wines accounted for 37%, and rosé 7%. Household spending on wines was also up by 3% year-on-year to €1.5bn in 2004, with the value of exports growing 3% overall. The value of wine exports for 2004 is expected to total €3bn, of which nearly half was generated in Europe and 25% in North America.

Sweden

Wine and beer duty might continue to rise in the UK, but the Swedish government is proposing to cut taxes on beer and wine by 30% next year as rising cross-border shipping continues to damage the state liquor monopoly. The report also suggested that the legal drinking age should be raised from 18 to 20, more in line with the American model. Current duty rates are 15 kronor (€1.65) on a bottle of wine, while half a litre of beer is taxed at almost 4 kronor (€0.44). If the proposal is passed by parliament, the average consumer price would fall by about 10%. Prices at the state-run Systembolaget stores are among Europe’s highest, but sales have fallen sharply since nearby Estonia joined the European Union and neighbouring Denmark and Finland slashed their alcohol prices.

In August last year, a 40% tax cut on hard liquor was also proposed. The parliament is expected to vote on the proposal later this year. The report has already come in for criticism from anti-alcohol campaigners who fear a fall in taxes would lead to an increase in alcohol harm.

UK

An armed gang has seized over £500,000 worth of Scotch whisky from a lorry near Glasgow Airport. The thieves got away with 10,800 bottles of Buchanan’s 18-year-old deluxe export-only blended malt. According to the Scottish Daily Record, two men kidnapped the driver of the lorry for five hours while the haul was unloaded. Anyone with information can call police on 01505 404000

Asia

Taiwan

The Glen Garioch Distillery has released one of its rarest luxury whiskies exclusively to Taiwan. With the snappy name of Glen Garioch 15 year-old Bordeaux Wine Cask Finish Highland Single Malt Scotch Whisky, the release will be limited to 1,800 bottles, and the whisky has an abv of 50%. Fergus Hartley, regional director for duty free, Asia Pacific and Americas, for Glen Garioch’s owners says, “It’s absolutely right that this rare bottling is exclusive to Taiwan – we’re proud that this is one of Glen Garioch’s strongest markets and we know that the Highland stature of Glen Garioch, in combination with the wine influence, will be a character highly appreciated by the discerning Taiwanese consumer.”

India

The Indian government has approved Scottish & Newcastle’s proposal to increase its stake in India’s United Breweries Ltd. S&N’s proposal to increase its holding from 26% to 37.5% will cost around INR7.8bn (€135.5m). S&N will increase its stake in the Indian company by purchasing 3.77m new shares at a price of INR575 (€10) each. In a statement the government said that Scottish & Newcastle India Private Ltd can buy the stake in

UBL either directly or through any of its overseas units. S&N will also offer to buy up to 4.32m shares held by minority holders of UBL for the same price to fulfil the regulatory requirements.

Australia/Oceana

Australia

Problems with over-supply of grapes in Australia continue with news that the Federal Government is to conduct an investigation into the Australian wine industry, prompted by the low grape prices being offered to growers by wineries this year. Growers in South Australia’s Riverland are being urged to drop their grapes on the ground rather than sell them for low prices, which would only add to the wine surplus. The Riverland Wine Grape Growers Association has warned that at prices of less than AU$200 per tonne, growers will not even be able to cover harvest and freight costs.

New Zealand

A wine glut looks less likely in New Zealand as wine exports have hit a record 44 million litres. In the 12 months to the end of February, up 55% on the previous year, Sauvignon Blanc remains New Zealand’s strongest selling varietal, with 31m litres exported during that period. Pinot Noir exports rose an impressive 57% to 2.2m litres, while Cabernet Sauvignon, Merlot and other blends were up 43% to 1.4m litres. Britain was New Zealand’s biggest wine export market in 2004, taking 17.06m litres, the US was next with 9.37m, and Australia in third place with 8.33m. These top 3 markets take 84% of New Zealand wine exports.

© db April 2005