UK’s Wine Funds Cut in Favour of New Markets

The Off Licence News is reporting that the UK faces a cut in wine funds as tough trading conditions take their toll and new markets look more appealing: “the heads of leading wine marketing bodies have warned that support for the UK will be significantly reduced amid tough trading conditions and pressure from producers to explore new export markets.”

New Zealand Winegrowers UK and European director David Cox said: “It is a little too early to say exactly how our generic funding is going to be divided up between the various key export markets.

However, we commissioned a very comprehensive strategic review of the state of the New Zealand wine industry and, as a result of the findings, the New Zealand Winegrowers board has assessed which geographical regions offer the best opportunities for profitable growth and which more mature markets have to be protected.

This may well mean that the emphasis on generic spending will naturally be focused on the growth markets of Asia, northern Europe and North America. This will inevitably have an effect on the level of activity and funding for more mature markets, such as the UK.”

Yvonne May, Wine Australia director for the UK and Ireland, said: “With us – and many other generics – funds from external sources such as state or regional bodies are redirecting monies to emerging markets, especially China but in general across Asia. The UK is seen as a mature market and thus established.”

Wines from Spain director Maria José Sevilla said this year’s UK budget has been cut in the face of the economic downturn and the eurozone crisis.

Jo Wehring, UK market manager for Wines of South Africa, said: “Because Wines of South Africa is entirely industry-funded, without any government assistance, we are more market sensitive. There has been a slight drop in exports and also an increase in UK bottling, which has had an impact.

Wines of South Africa is looking at opening other markets and because we only have a certain amount of funds available the UK will be affected. But it is not a reflection of the importance of the UK for South Africa.

Wine Institute of California UK director John McLaren admitted that, while generic activity was “under increased scrutiny”, he felt “reassured by the continuing recognition of the importance of this market to California”.

Reading between the lines it seems that the money will be spent marketing wines to China as the UK tightens its purse strings.

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