Rioja must hold price

23 October, 2014

Deep discounts risk denting the image of Rioja and wineries should resist cutting prices to shift surplus wine, according to Marques de Riscal.

Javier Ybañez Creus, export manager at Marques de Riscal, which claims to be the largest producer of reserva wines, said producers were using price to empty cellars and instead needed to preserve the category’s position.

He said: “The Spanish always try to solve their problems by lowering the price, but the minute you do that, you’re dead.

“The UK has always been one of the most important markets for Rioja and we must protect the image.”

Rioja volumes have grown 1.3% in the past 12 months in contrast to the overall wine market, which has declined by 3.8%, and the Spanish category, which has lost 11.2% of its volume over the year (Nielsen, year to June 21, 2014).

But Creus has warned wineries must be more united in their attitude to promotions in order to maintain Rioja’s lead.

He added: “Spain is the poor brother of Old World producers. But now we are making better and more international wines than ever before and there are a lot of new guys coming through.

“If we work together and are tough on buyers, and sell at a price we want, the category will continue to do well. We need to row in the same direction.

“The first thing retailers are selling is Rioja as a region, then Spain comes second. Even during the crisis we have maintained our price. It’s been a gamble, as we have lost a lot of sales in the domestic market with the country’s struggles.”

He said the significant rise in the number of wineries made it harder for the region to agree on certain issues. “Some wineries are just clearing stock with labels and brand names you’ve never heard of before. The perception of Spain is that it has to be cheap. There are now 600 wineries from only 80 in 1999, so controlling what they all do is very difficult.”

However, he urged Wines of Rioja to step up the way it markets Rioja to consumers. “The generic needs to find new ways to promote the region.”

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