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California, Other Wine Producers Battle For Exports

June 30, 1993

BORDEAUX, France (AP) _ Not so long ago, making and selling wine was a game whose players talked about bouquet, not shelf space in a supermarket.

Now, wine producers around the world are engaged in a fierce war to win over a dwindling number of drinkers with recession-pinched wallets and changing tastes.

Although quality counts, the new emphasis is on marketing. Producers say that survival in the next decade will go to those who understand pricing, packaging and what people want.

″Wine is a package product, like a car or stereo,″ said Timothy Wallace, a general partner in California’s Glen Ellen Winery.

Glen Ellen was one of 2,000 exhibitors from 42 countries here recently for the biennial Vinexpo, the world’s largest professional wine and spirits show. They wooed buyers, sized up competitors, and took stock of an industry in crisis.

Wine consumption fell about 20 percent in the 1980s, hitting 6.2 billion gallons in 1990. The fall is due to health concerns, higher taxes and crackdowns on alcohol abuse.

Meanwhile, bountiful harvests have led to overstocked cellars and diving prices.

Throughout the 1980s, the industry opened new markets in Asia, especially Japan. But many Japanese put a cork in their wine-drinking when their economy stalled.

Producers are elbowing into each other’s turf. Although France, Italy and Spain still dominate the export market, they’re facing stiffer competition.

California’s exports soared 25 percent a year for the past six years, to $175 million. Australia’s climbed 1,000 percent in 20 years. Chile has done even better.

″I think a lot of our winemakers are finally realizing that if they want to play ball, they have to get into the international market,″ said Paul Molleman, international marketing director for the San Francisco-based Wine Institute.

If winemakers have it tough, wine drinkers can bask in plummeting prices and choices from a bewildering array of producers.

Romania, for instance. Although the Romans planted vines there 2,000 years ago, vineyards suffered neglect after 1945 by Communist planners more interested in heavy goods.

The country has rediscovered wine as a hard currency source. Basil Zarnoveanu, director of a Bucharest-based trading company, Vinexport, hopes to carve out a niche the same way Chile, Bulgaria and South Africa did.

First, by targeting countries open-minded about odd-sounding labels. Most exporters cite Britain, Germany, Scandinavia, Japan, Canada and the United States.

Then, beating the price. Zarnoveanu figures Romania’s unknown bottles could tempt buyers at 3 pounds - about $4.20 - in Britain, under the 5 pounds better-established competitors can fetch.

Cash flow should lead to better wine, more exports, decent market share and eventually higher prices, Zarnoveanu hopes.

″During the old regime, wineries just had to make″ wine, Zarnoveanu said. ″Now, they have to know what the market wants.″

Most tipplers want neither cheap table wine, nor superb vintages whose prices take the fun out of a glass. Tipplers want $5 to $15 bottles of light, slightly fruity wines good enough for dinners or parties.

Glen Ellen was among the first to sense this trend. It grew from a Sonoma Valley boutique outfit in 1980 to the seventh-largest U.S. winery selling $5 a bottle Chardonnay.

Cultivating an image as the ordinary man’s good wine, Glen Ellen pokes fun at snobs with a wine-appreciation book whose cover shows a couple sipping a glass of red through straws.

Others try snob appeal. Moldova, a tiny former Soviet republic, stresses its history as winemaker to Russia’s czars.

″It helps identify the country,″ said sales agent Karin W.M. van Son. ″Let’s face it, most people don’t even know where Moldova is.″

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