Varying consumer tastes - and some savvy marketing - are changing customer demand for wine in the on-trade. NIGEL HUDDLESTON reports on the best-selling wine-producing countries
GB wine sales by country
This 2004Val £m'sVal £m's MAT
yearMAT to May 04MAT to May 05change %
1(1)France824746-9
2(2) Australia429411-4
3(3) Italy415395-5
4(5) Chile13815815
5(7) USA12214419
6(4) Germany159142-11
7(6) South Africa1281344
8(8) Spain951049
9(9) New Zealand434811
10(10) Argentina223144
1. France
Annual sales: £746m
Change on last year: -9%
Sales of French wine continue to slide but its presence on restaurant and gastro-pub wine lists still keeps its on-trade value close to twice that of its nearest competitor. While branded wines give consumers confidence in the New World, France's strength remains in its rich diversity.
Falling sales have led to bad politics in the wine industry at home. Supply in many regions outstrips demand, leading to falling prices and emergency measures such as those in Bordeaux, where a 'crisis distillation' of some surplus wine was permitted this year.
There's also talk of ripping up vineyards to reduce the fruit available to make wine, though the introduction of a new Vin de Pays category seems a more positive route forward.
Vin de Pays de l'Atlantique will give the region a more credible commercial flag under which to sell surplus wine and could push varietal labelling to the fore in the style of Vin de Pays d'Oc from the south of the country.
Over-production and low prices have also been an issue in Languedoc, where anger among growers spilled over into violence in the summer, with riots and even a bombing.
The good news in the on-trade is that France remains reasonably price inelastic as far as consumers are concerned.
A Wine Intelligence study conducted this year showed that price was a relatively low deterrent to purchase for French wine drinkers, particularly in food pubs.
That may in part be due to the relative lack of major French brands, and therefore consumer knowledge of what prices would be in the off-trade, where brands such as JP Chenet, La Chasse du Pape and Calvet compete with the best the New World can throw at them.
Around the French regions, Champagne is in a boom phase of its traditional commercial cycle, Beaujolais (without the Nouveau) is on the way back after the 2003 vintage was acclaimed the best in almost 30 years and Alsace wines are at last receiving the respect they've long-deserved, buoyed by a marketing campaign linking their aromatic style with Thai food.
2. Australia
Annual sales: £411m
Change on last year: -4%
A dip in sales for the fastest-growing wine producing nation over the past 20 years is a tribute to the advances made by competitor New World countries, most notably Chile.
But just as the Aussie cricket team has shown it is far from ready to give up its world-beater crown since the Ashes defeat, it would be wrong to assume that the Aussie wine bubble has burst just yet.
Brands such as Constellation's Hardys and Banrock Station remain among the strongest in the business, and the acquisition this year of Southcorp by Foster's gives new impetus to a combined portfolio that includes Lindemans, Penfolds, Rosemount, Wolf Blass and Yellowglen.
However, fashion is arguably working against Australia at the moment.
There's less of a consumer thirst for in-your-face fruit than there was a few years ago, and many producers are now tempering their varietal styles towards Old World subtlety, with Shiraz makers in particular increasingly looking to France's Rhane Valley for inspiration.
The focus is also turning on the unique selling points of particular regions such as Margaret River and Yarra Valley, which are helping to demonstrate a diversity that many consumers may never have previously imagined of Australian wines.
3. Italy
Annual sales: £395m
Change on last year: -5%
Italy's historic strength in the on-trade is, of course, largely tied into the size of the Italian restaurant market, but in pubs Italy still supplies arguably the most common sight on back-bar blackboards: Pinot Grigio.
The inoffensive white wine has become a brand in its own right in the pub trade, and although the variety is produced around the world, usually under the French name Pinot Gris, no other country has managed to challenge Italy's domination.
The irony is that the uniformity of delivery of Pinot Grigio is in contrast to the rich variety of styles and grape varieties that Italy as a whole has to offer, diversity that only France can surpass in the wine world.
But as with France, while Italy's diversity is its strength, it's also its downfall, with fundamentally lazy consumers unwilling to pick their way through the regional maze.
Although Italy has prestige producers, such as Antinori, and recognisable brands, including Canti, it lacks the big names of Australia or California, largely because the industry is so fragmented at vineyard and production level.
The re-unification of the Chianti Classico DOCG region under one regulatory body this year, for example, brought together no fewer than 600 producers and 6,000 hectares of vineyards.
4. Chile
Annual sales: £158m
Change on last year: +15%
The role of Wines of Chile, the energetic generic body, shouldn't be underestimated when looking at the country's sales success with Chile knocking the spots off its competitors among the established exporters to the UK.
Leading producers such as Concha y Toro, Cono Sur and Errazuriz have hit on a winning formula with strong varietal ranges, high-quality production values and excellent value-for-money.
In addition, Chile's wine industry is unfettered by the unwieldy legislation of France or the ingrained consumer perceptions of California.
Syrah (or Shiraz) was absent from Chile a decade ago, but has been embraced by the country's winemakers so readily that there are 2,500 hectares of the stuff planted and it is arguably the main driver of growth, along with Chardonnay for whites.
Although heavily produced, Chile has not been afraid to down-tone the emphasis on its speciality, Carmanere, recognising that while it may provide a unique point of difference, other grapes can offer better value and more commercial appeal.
Like the rest of the New World, Chile is being spun towards regionality as a hook on which to demonstrate that it has diversity to go with its quality.
The developing cool-climate Leyda Valley region, in particular, is tipped as one to watch for quality Pinot Noir.
5.
USA
Annual sales: £144m
Change on last year: +1%
California's quest to occupy the middle ground in wine may be taking longer to feed through into the on-trade than the off, with only slight value sales growth, although still enough to take it past Germany in the rankings.
California has long been strong, with entry-level wines in supermarkets and heftily-priced super-premiums that make it on to restaurant lists, which led in 2004 to the concept of Brand California, and the selection each year of a range of 'benchmark' wines to represent the best the country has to offer in the mid-market, defined as £5 to £10.
While the wine-tasting road movie 'Sideways' seems to have little impact on sales of the Pinot Noir that the film's protagonists enthuse over, the 2005 benchmark selection did feature some Pinot, along with a smattering of Cabernet Sauvignon, which may have more long-term effect in positioning the US wine industry as about more than Chardonnay and Zinfandel.
With Gallo, Fetzer and Blossom Hill all setting out to colonise a range of price points there's plenty of variety for mainstream licensees to choose from, but the harder-to-come-by regions of Oregon and Washington State, plus cult Californian labels like Bonny Doon and Ridge, are more likely to be on the radar at the gastro end of the market.
6. Germany
Annual sales: £142m
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