Strategies for growth and internationalisation of the Spanish wine sector

(FoodBev) - In a new report published by Rabobank's Food & Agribusiness Research and Advisory group, Rabobank says that an improvement in the Spanish wine industry's productive structure and orientation to the international market is necessary for the country to remain globally competitive.

Recent EU support programmes have improved the efficiency of Spanish wine production, but oversupply remains an issue.

The two strategic options available to Spain to improve its competitive positioning, according to Rabobank, are:

1. Spain must either increase production of international varietals, or
2. Build foreign market consumer demand for its traditional varietals.

For either strategy, the process of achieving greater success in extra-EU markets could be facilitated by continued efforts to restructure the supply base.

"While Spain has seen marked improvements in its wine production efficiency as a result of EU subsidies, it still struggles to build penetration in non-EU markets," said Rabobank analyst Stephen Rannekleiv. "In conjunction with grubbing-up subsidies, Spain was also a major recipient of vineyard restructuring funds, which has raised yields and is expected to lead to an increase in wine in the market.
"A pressing concern for many is that much of this increased production is destined for markets already dealing with their own oversupply issues, such as France and Italy."

While these EU markets will remain important destinations for Spanish bulk wine, the industry must focus efforts on building market demand outside the EU.