UK faces cut in wine funds

23 March, 2012

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. 

Despite affirming their commitment to the UK, wine generics admitted budgets had been reduced and that the activity they decided to fund was increasingly scrutinised to ensure it delivered value for producers. 

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.

“Our budgets are reduced and therefore we will have to be very savvy in terms of where we are going to invest this year, in comparison to where we were in other years,” she said.

But she said the body is committed to the UK. “The UK market remains a target market for us, not only for our own organisation but mostly for producers,” she said.

“The reality is that Wines from Spain is a collaboration between the trade in the UK and the trade in Spain, and our success or failure will always relate to this partnership.”

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 what is available to the UK will be affected. But it is not a reflection of the importance of the UK for South Africa.”

New Zealand Winegrowers UK and European director David Cox said the generic had carried out research into how it should allocate this year’s budget, which could result in the UK losing out.

He 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.”

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”.

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