by Markus Stolz

Nemea
takes beating

byMarkus Stolz
November 8, 2010, 10 Comments

Nemea is the one region in Greece that together with Santorini achieved branding itself successfully. It is particularly noteworthy that Nemea also managed to become a synonym to the noble grape variety grown there, Agiorgitiko, whose name is much harder to remember.

A few weeks ago I reported on the effects the ongoing financial crises in Greece is having on the local wine industry. Greek consumers are clearly spending much less money on wines, and as a direct result, a lot of stock remains unsold. AB is one of the largest supermarket chains in Greece, and they continue heavily discounted promotions. The most aggressive campaigns target top appellation regions.

This morning the latest bargain sale started, this time the Nemea region is advertised. The Cooperative of Nemea is a very important organisation in Greece. Thanks to the remarkable talent of its head winemaker, they are able to offer a good and solid portfolio of Agiorgitiko wines. Never too high in alcohol, the wines are fresh, uncomplicated and fruit driven. Given the fact that very large volumes are being produced, and that grapes from all the growers must be accepted, this is an achievement. The prices for the wines have always been extremely competitive. The “Nemea Special” wine sits right in the middle of the portfolio in terms of quality.

The “Nemea Special” is now offered at a discount of 40% and comes in at a shocking 1,99 € per bottle. As the Cooperative itself relies heavily on the Nemea image, the AB supermarket only needs to make sure that the discount and price are dominantly displayed on the advertising boards. The shoppers will likely not notice the fact that it is not a wine from a single grower. The reputation of another great Greek wine growing region is being hit. The vast majority of Nemea wines can hardly be called expensive (although some exceptions do exist), but to portray the Nemea name with prices that usually are only reserved for mass produced, low quality wines will do the region no favour. I sincerely hope that this will be a temporary initiative limited to the local market. As for the wine itself, I have certainly bought and enjoyed it before without the heavy discount.

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  1. Kostas KatsoulierisNovember 9, 2010, 12:22 am

    Just a thought but if this promotion leads to more wine being sold than would otherwise have been sold is that not a good thing for AB, the cooperative, the Greek taxman and lest we forget that downtrodden, powerless oftentimes naive creature the Greek consumer? It’s a shame that wine alone appears to be targetted for such discounts but you only need to step foot outside this country’s borders to see how much the Greek consumer is being screwed on prices for many goods. Anyway hopefully the promotion will just be for Greece – I’m off to AB to get me a case of that wine! Seriously though would be great to see an article on the role played by cooperatives in places such as Nemea, Santorini, Naoussa and Samos.

  2. elloinosNovember 9, 2010, 8:43 am

    Kosta, it is always a pleasure to read your comments, thanks for this! You are quite correct in pointing out that many everyday life products are so expensive in Greece. The Greek IKEA is the most expensive in all of Europe, and there are many more examples. As a consumer, I am delighted that I can pick up a Nemea appellation wine for under 2 €. As a wine professional however I am horrified by this campaign. In my view it is extremely shortsighted and damages the reputation of a great wine region.

  3. Thomas PellechiaNovember 9, 2010, 3:51 pm

    Markus,

    We go through similar issues in the U.S., but I have a thought that I’d like to throw at you.

    In the U.S., wine critics rarely give credence or even mention to the least expensive wines, probably because they are not exactly the most complicated and powerful of the wine world. There’s nothing wrong with that, except that their price often defies the other message that the wine industry tries to implant in consumers’ minds: wine is food for every day consumption.

    I don’t know about Greece, but I can’t imagine that the every day Greek consumer has any more money than the every day American consumer, and we simply cannot afford to buy for daily consumption most of the written about wines.

    With that pricing and consumer disconnect, the discounting might just be a brief benefit for consumers that they understand is not a permanent condition–although, it’s too bad the prices can’t be affordable to every day consumers.

  4. elloinosNovember 9, 2010, 4:25 pm

    Thomas, you make a very smart point here. I drafted the article in a careful way, as I do honestly value the competitively priced (before the heavy discount) wine of this Coop. I agree fully with you that many perfectly enjoyable wines get overlooked. In this regard, you offer quite a positive different look on things. I appreciate your input. I still find it very dangerous and irresponsible to use such a campaign by focusing on the brandname of the whole appellation.

  5. Ioannis PapadakisNovember 9, 2010, 4:27 pm

    Markus, the damage on the image of Greece’s top appelations has started long before the crises, when private-labeled bottles bearing the O.P.A.P. (V.Q.P.R.D. or A.O.S.Q. if you will…) ribbons were sold in super-discount chains such as Macro or Lidl for around 1 Euro a bottle. More than this, the contents of these bottles is of the lowest quality as a result of the non existance of a serious regulatory body that would run quality assessment sessions before awarding the Appelation of Origin ribbon to a bottle of wine, based on its real character than merely on the (claimed) grape origin and variety. The wine which you are referring to has of course nothing to do qualitywise with those wines, but I believe that the harm on the prestige of Greece’s top appelations has been caused mainly by the existance of these low-quality “budget” super-market wines than by aggressively discounting an otherwise decent bottle of wine from the same appelation.

  6. elloinosNovember 9, 2010, 4:51 pm

    Ioanni, I was not aware of this, thank you for pointing this out. Lidl actually has fairly descent Greek varietal bottlings that sell for 3 to 4 €, perfectly enjoyable wines. I have not come across OPAP wines that are offered at such low prices, but I have never been to Macro either. I think what upsets me is that the top appellations are currently targeted, first Santorini, and now Nemea. What is next, Naoussa?

  7. Paul DNovember 11, 2010, 2:25 pm

    Probably a very dull question but what would happen with wines in question if they weren’t discounted so heavily?

  8. elloinosNovember 11, 2010, 2:41 pm

    Paul, not a dull question at all – this wine is offered by AB all year around, and should sell well. The offer was sold out within 24 hours at my local branch, one of the largest in Athens.

  9. Steve SchranJanuary 4, 2011, 10:54 pm

    Concerns about debasement of the brand/appellation due to price discounting on the low end is misplaced. The marketing of Greek wine in general, and Nemea in particular, has many problems, but this doesn’t seems to be one of them.

    This “40% off” sale implies that the front line store price was 3.3 €. A luxury brand it wasn’t to begin with. We are talking about (I trust) tasty, high-yield, (essentially) tank-fermented juice (I am assuming that new Nevers oak isn’t part of the formula) that buyers can get, ex-cellars, from co-ops across Europe for even less than 2 €. So, in this instance, margins are squeezed a bit and customers get a good deal on an economy brand. That is fine for business, I should think.

    If Nemea is a brand that could ever be debased, it first needs to be established, and this needs to occur at the high end. And here, the question must be asked, what is Nemea supposed to be? That this question has not been answered means that appellation laws that restrict experimentation tend to be more hindrance than help. Substantive progress, when it comes, will result from one or more pioneering growers establishing a recognizable Nemean identity that offers both quality and value, and then this narrow range of best practice can be replicated by other growers.

    In every quality appellation in the wine world, there are many minor producers “debasing” the brand to no effect. There are vast lakes of Bordeaux and Cotes du Rhone, but these have no impact on First Growths or Chateauneuf du Pape. To the contrary, the latter impart a premium to the former, and encourage progress in their quality.

  10. elloinosJanuary 4, 2011, 11:56 pm

    Steve, thank you very much for your thought provoking input. I would fully agree with your arguments if Nemea would be an established brand already. But it is not, as you quite correctly point out. Nemea is known as a name, yet falls short as a brand. This is exactly why this campaign might hurt. If brand equity would have been built, this might simply be viewed as a good deal on an economy brand. As things are, the name Nemea rings a bell, but now a low price tag is being introduced. It is a dangerous path, as the average consumer is not yet familiar with the high end products. Once the notion is set that Nemea VQPRD wines are available at discount prices, it might well have an effect on price expectations for the region in general. I hope that some “first growths” will be able to counter this.
    I really appreciate your comment very much, great start for a solid discussion!