The French Wine Industry Over the past several years, the French wine industry h
ID: 1132513 • Letter: T
Question
The French Wine Industry
Over the past several years, the French wine industry has been suffering. From 2010 to 2011 alone exports of French wines have dropped 5.4 percent and millions of litters of unsold wine are accumulating in French celars. France’s market share in the United States hat dropped from 7 percent to 5 percent in the past three years. During this period, sales of producers in California, Australia, and Chile have been rising sharply in the world’s important markets of North America, Northern Europe and Asia.
What are the major reasons for this shift in demand fom the worlds leading wine producers to a group of upstarts in the rest of the world. According to a recent aticle there are several:
1. French vintners are restricted by the government as to the types ot grapes that can be produced in a particular region, and how they are cultivated
2. They are paid by the amount of grapes they deliver, thus impairing careful growing and resulting in inconsistent quality
3. Predominantly, French producers are small, scattered frms (there are about 20,000 of them) that are finding it difficult to compete efficiently with large, new -word companies. Onl one French company is among the world’s ten largest producers.
4 The many different regional and local labels of French wines makes it difficult for consumers ( expect for connosseurs) to understand what they are buying. compared to the simple labeling by the new word’s large wine producing companies
QUESTION
1.HOW CAN THE FRENCH WINE INDUSTRY SURVIVE THE COMPETITION IN THIS MARKET STRUCTURE?
Explanation / Answer
The French wine industry can survive the competition in the market structure where sales of producers in California, Australia, and Chile have been rising sharply by the following ways
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