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.