by Markus Stolz

Greek wine market

byMarkus Stolz
September 13, 2011, 2 Comments

The collapse of the local Greek wine market is picking up in speed. While at first the high end segment was hit hard, prices now erode quickly in the middle section. Greece’s largest supermarket chain, AB Vassilopoulos, has been discounting wines up to 40% on a weekly or bi-weekly basis for months now. Their offerings include wines from large and medium sized producers alike and comprise some of the very top names. I am not sure if the producers do have a say in this, but it is interesting to see that some brands have never been included in this policy. Be that as it may, the price cuts have now clearly shifted to wines originally priced in the 5 to 8€ range.

Restaurants have also not surprisingly lowered prices on their wine lists. In addition, the distribution system within Greece is in the danger of falling apart – cash flows have dried up, some businesses have already gone bankrupt, others struggle for survival. A growing number of wineries are taking matters in their own hands, self-distributing their portfolios.

It is only logical that prices continue to erode in Greece while the financial crisis is getting out of control. The implemented austerity measures have sent the Greek economy into a downward spiral, and every family is struggling. Wine has turned into a luxury good.

There might yet be a silver lining – the one thing Greek wines have lacked in the past are a large number of competitively priced, solid quality entry level wines. It is here that the dynamics might become very interesting in regards to the export markets: Some of the shelf prices we are seeing today in the local market would be deemed as quite competitive by international standards. In addition, Greek wines are enjoying a remarkable change in perception globally, and start being viewed as trendy. Trendy wines with competitive pricing are a very powerful combination and can help to unlock a vast future potential. The current gloom and doom might well the beginning of a new dawn.

Within the industry, lots of power shifts are taking place. They might not be obvious yet, but I will not be surprised to see new and different names taking over the centre stage within the next 2 to 3 years. The cards are being shuffled right now, and the crisis is the dealer.

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  1. Rudy D.September 14, 2011, 9:16 pm

    Hi Markus, thanks for the posting.

    As a Phihellene the state of the domestic market is dismal and upsetting. Yet, circumstances abroad continue to support your sentiment of cautious optimism regarding greek wine exports. Here’s why. In the U.S., for instance, varying market reports state that off -premise year over year wine sales to date have increased between 4%-7%. Most of this growth is estimated to have occurred in the wine price range between $9-$12, and over $20 categories — “sweet spots” for many imported greek wines. Import sales and growth have dipped slightly (around 2%). But, in my opinion, import sales (in general) will rebound in the short and long term largely driven by Millenial generation wine drinkers. This market segment has a sincere appreciation for wines that show diversity, posses a unique story, and are price-value balanced. Surely, many greek wines fit those descriptions.

    As your efforts demonstrate, however, this is only part of the equation. Consumers need to be aware of the value proposition of greek wines and the wines need to be available for sampling and purchase. Again, this prospect is extremely challenging given your update and posting on August 1, 2011, regarding internal rifts between industry associations and its negative impact on the New Wines of Greece Campaign.

    Certainly more tough times lay ahead for both Greece and its wine industry. For my part, I will continue to keep updated and to promote and drink greek wines. It may take time, but I believe that greek wines are intrinsically positioned for appreciation amongst emerging and prominent new consumer groups.

  2. elloinosSeptember 14, 2011, 9:30 pm

    Rudy, thank you for the detailed information. I am seeing more and more serious interest from the US and have every reason to believe that the current offering will be expanded. I agree with your reference to the Millenial generation of wine drinkers. Also, many Sommeliers treat Greek wines with honest excitement. As to the marketing efforts from the Greek wine industry, the mentioned rifts are certainly a setback, there is no point in denying this.