Expert's Opinion : Gregory Autin (Hérault wine observatory): "the worldwide bulk wine market: an opportunity for the future?"

regory Autin, from the Hérault “Conseil Général” wine observatory, assesses growth opportunities within the worldwide bulk wine market for French wines in general and Languedoc wines in particular:
"Around 20% of our French still wine volume is exported in bulk, compared to 53% for Spain, 33% for Italy, 40% for Chile, 30% for Argentina, 50% for South Africa, 47% for the USA, 39% for Australia and 25% for New Zealand in 2009. At the Hérault “Conseil Général” wine observatory’s evening meeting that took place on Tuesday, 30 March, Alfredo Coelho presented the economic data available on the worldwide bulk wine market. This presentation can be viewed on the Hérault wine observatory website.
The international commercialization of wine in bulk offers attractive benefits: reduction in carbon emissions, lower transportation costs and taxes…but on the other hand, there are drawbacks such as high price volatility, low available margins, loss of employment in production due to the move from packaged to bulk product ,…Daniel Murphy, of Murphy Wine Company, estimated the worldwide bulk wine market potential to be 168 million hectolitres. Over the evening, Jane Masters shared with us the English buyers’ view of things, and particularly that of the bottling companies. The blending work, the despatch of samples in good condition within the requested lead times and with correct identification , are the important keys to successfully maintaining a long term commercial relationship with the bottler. Deals are regularly lost for the wrong reasons…
Languedoc producers sell around 70% of their wine production in bulk. The Languedoc wine region has decreased by more than 165,000 hectares in size over the past 30 years. The 2009 harvest was 7% lower than the previous harvest, which was already one of the lower harvests in history. Daniel Murphy estimates that 59% of the 2009 harvest was sold by the end of December 2009, i.e. 13% more than in 2008 over the same period. With the continued grubbing up of vines in the Languedoc, won’t the Languedoc be short of wine and slip below the 10 million hectolitres production barrier? Laurent-Emmanuel Migeon, director of EVOC (Businesses and Vineyards of west Carcassonne), explained that, for bulk wine commercialization to be profitable for the Languedoc region, some adjustments would be needed: increase in yields and/or production cost reduction particularly for the internationally known grape varieties. To meet the challenges inherent in the worldwide bulk wine market, the Languedoc, with its many advantages, must specialise its wine production and stay close to the market."