Bulgarian wine makers are threatened by losing their external markets due to poor quality of their products.
Over the last couple of years, the Bulgarian wine makers have made good profits by exporting cheap wine to Russia. But now they can lose this market easily. They might also be pushed into altering their production concepts – shifting to quality wines rather than the currently produced cheap products.
Well, this might prove to be an uphill task – if such a re-direction has already started to take place in the Bulgarian market, the situation is different in the markets abroad: once they have been lost, they can be reconquered much more arduously and over much longer periods.
Beginners’ Wine
The Bulgarian wine making sector has been on the rise over the last two or three years. Many wineries invested in their own vineyards, part of which have begun yielding good grapes. The wine producers started offering ever more quality products; and both the prices and the wine quality are increasing in the domestic market. Competition from abroad is also increasing; wines from Chile, Argentina and from traditional European locations are finding their place in the Bulgarian market. However, the bulk of the Bulgarian-produced wine is being sold abroad, chiefly in Russia. Bulgarian wine exports rose to 112.2 million litres in 2006, from 80.2 million litres in 2001. In 2006, of a total 90.9 million litres of exported bottled wine, more than 58 million litres went to Russia, data from the National Vine and Wine Chamber showed. The reason behind that fact is that Russia closed its market for products from Georgia and Moldova, thus opening a niche for the Bulgarian producers. market players say, however, that the wines which are sold in Russia are of low quality and are cheap—regardless of whether these are Ukrainian or Moldovan wines which are bottled in Bulgaria, or wines produced in Bulgaria. It is not rare for Russian inspectors to encounter Bulgarian fakes. It is the low quality and the fake products that might prompt Russia to close its market to Bulgarian wines, too.
“Bulgaria has good positions in Russia, Poland, the Czech Republic, Slovakia and the Nordic countries. But in all these countries, the Bulgarian wines are stocked on the lowest shelves in the supermarkets,” says Villi Galabova, sales director at Vinimpex, an exporting company of Belvedere. The inexpensive Bulgarian wines find also positions in the relatively new Far Eastern markets: China, Mongolia, Vietnam, Hong Kong. Only small quantities of medium to high priced products are exported to the countries in Europe, and this only by a limited number of wine producers: Domaine Boyar, Domaine Menada and others.
The Spirit of Water
Despite some discrepancies in the various market research, there is an overall trend for a rise in sales. According to some leading wine makers, between 30 million and 35 million litres of wine are sold annually. Data of Kapitalov Pazar, an analyst firm, show that 39.9 million litres of wine were sold in 2006, down 14.4 pct year-on-year. But there was a considerable rise in the first quarter of 2007: 19.1 pct more wine was sold than in the same period of 2006, according to a survey of Kapitalov Pazar. According to research of Euromonitor International, wine sales will total 50 million litres in 2007, versus 48.7 million and 47 million in 2006 and 2005, respectively. The wine-making companies themselves envisage sales to go up by an annualised 7.0 to 8.0 pct in 2007. Currently the wine market is valued at 223.1 mln levs. According to Euromonitor, some 37.7 million litres are being sold on the retail market, i.e. this is the so-called off trade volume, where the product is consumed outside the venue it was bought in.
Also the average prices of wine are on the rise. In 2006, the prices of red wines went up 22 pct and of the white wines grew by 35 pct, according to Kapitalov Pazar. Euromonitor has found out that the biggest sales are in the medium segment—between 5.0 and 8.0 levs a bottle.
($ = 1.4094 Bulgarian levs)
15-21/09/07, P56-57
Search for: market |
Search for: company |
Search for: sales |
Search for: Bulgaria |
Search for: Moldova |
Search for: research |
