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Greece: A beneficial crisis in the long term, extremely worrying in the short term

Greece
Par Sharon Nagel Le 01 septembre 2015
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Greece: A beneficial crisis in the long term, extremely worrying in the short term
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reece has never hit the headlines as often as in 2015, even though the crisis goes back several years. Although most reports cover the debt issue, Vitisphère decided to find out what impact the financial crisis has had on the wine industry in recent years. Sofia Perpera, enologist and director of the Greek Wine Bureau in North America, answers our questions.

How would you describe the current state of the Greek wine industry?
When the problems started at the end of 2009 but mainly in 2010, people initially did not stop drinking wine because wine is part of our culture and goes with our food. However, they did start drinking cheaper and more bulk wines. They also stopped going out to restaurants as much. Prices in restaurants had risen due to increases in VAT. On a more positive note, because people stopped going out to restaurants, wine bars started popping up. People still wanted to go out because they are very sociable, but they didn’t necessarily want to pay for a whole meal; they were willing to pay for a glass of wine and perhaps an appetiser. Wine bars started mushrooming, not only helping wine consumption but also educating consumers. This had an influence both on restaurants, which were selling jug wines, and on coffee shops which started selling wines. The Greeks drink a lot of coffee and we have thousands of coffee places all around Greece. They are a modern take on the traditional café, where you can get something cold to eat like a club sandwich, a dessert, or an aperitif. So there has been an increase in consumption and more attention has been paid to the quality of the wines. 2014 was therefore a good year for the wineries.

Were there any other effects?
When the crisis started, wineries that focused more on exports started improving their export performance, particularly in the United States and Canada. Exports used to account for about 20% of sales, now that share is closer to 35-40%. All was well with the wine industry until the end of 2014. However, lately, especially since the economic shut down in recent weeks, it has been a disaster because nobody can pay for anything outside of Greece or selling anything. We import everything, from corks to bottles to barrels so this is very tough for the wineries. We are hoping the situation will be resolved very quickly because everybody needs to get ready for the harvest.

Do you think the latest part of the crisis could jeopardise the forthcoming harvest?
With the recent debt arrangements I hope payments outside Greece will be allowed again. With the current situation, nobody can pay for anything outside the country and so of course, nobody will send anything to Greece. People around the world seem to be sympathetic to the Greek cause and the international press has been calling for people to support Greece by drinking its wines. Have you experienced this?

Yes, I’ve seen that lately. In the US and Canada for instance, we’ve had a lot of support in general and a lot of positive articles. It is as if the press wants something positive to write about Greece and wine is giving them that opportunity.

How is this year’s harvest shaping up?
The winemakers I have spoken to expect a good harvest in terms of quality since we had enough rain throughout the year and the grapes seem to be in very good health. It’s still very early though and of course there is the possibility of rain during the harvest, which is what happened last year. Santorini is expecting a small harvest, perhaps 30% down, but generally speaking, the harvest at the moment is looking good. Some islands begin harvesting at the beginning of August, whereas other regions end harvesting towards the end of October.

Are there any foreseeable changes to government policy that may affect the wine industry?
VAT increases will hurt restaurants and hotels badly and therefore wineries. The measures will have a huge impact on people and the Greeks will find it very difficult to bear them. There is also a proposal to ultimately increase VAT on the islands – at the moment they have a special tax regime to compensate for the fact that everything has to be shipped there. However, the good news for the wine industry is that there will be a development package of 35 billion euros and this will go mainly to private companies. We don’t have details of this as yet but I’m sure it will create jobs and help the economy.

Have the €72 Mln allocated by the Greek Minister for Rural Development and Food in 2013 and 50% funded by the EU to promote Greek wine in the United States, Canada, Russia, China, and Switzerland for 2014-2018 been earmarked/spent?

Absolutely. This is the funding that EU producer countries receive from the EU for promotion in third countries as part of the CMO for wine. This money has helped a lot and obviously, if Greece were no longer in the Euro zone, this would be a problem. The money has not only promoted awareness of Greek wines but also sales.

How has the Greek industry fared in recent years due to the crisis?
Vineyard acreage has decreased in recent years but it is difficult to tell whether it has anything to do with the crisis or not. It has been happening for several years. Export statistics from the US and Canadian governments have shown that over the past five years, there has been an increase of approximately 25% by value in Greek exports to Canada and a little more in the US. Our dry white wines tend to be very popular in export markets, followed by the reds. For the whites, we can offer some very unusual varieties with interesting aroma and good acidity. We are very competitive in that category and offer great value for money. In today’s market, making good quality wine is taken for granted, you have to be able to offer more and we can do that with our native varieties. This allows us to focus on differentiation.

How do you see the future for the Greek wine industry?
The Greek wine industry is at an excellent stage right now. Quality is great and the wineries have invested a lot. The Greek wine renaissance began at the end of the 1980s and start of the 1990s, and a lot of money was invested in establishing great wineries. We are now going through a second renaissance and wine companies are investing a lot in the vineyards and will continue to do so. Research is being conducted into clones and various viticultural practices. Winemakers are taking the better-known varieties to different levels but also working with indigenous grapes. We need the deals with the EU to go through so that we can realise the next step in our development. Once Greek wines get into the hands of consumers and distribution networks, then we’ll see a big difference.

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