A few thoughts on the recession

We are in the third year of the Recession here in Ireland and organic wine sales have taken a big hit. Certainly other wine sales have suffered as well and all sorts of reasons have been given. With respect to the organic wine trade we can point to a number of factors:

1) Price. The majority of our wines are priced between € 8.50 and € 15.00. But we are not in a position to sell at around € 5.00.

2) Outlets. 80% of all wines in Ireland are purchased at supermarkets. Supermarkets store very few organic wines and neither do off licences. So where can the interested shopper buy organic wines? Last year the government changed the law on how to get a wine retail licence. A shop interested in selling wine needs to get a court order, publication of intent in a local newspaper, present four sets of plans of the premises to the court and get the go ahead from the police. Furthermore, the fee was doubled from € 250.00 per year to € 500.00. Many health food shops which used to have a few organic wines have decided not to renew the licence as it is just too expensive. Others will not get a licence because it is too difficult and expensive. With these measures the government has achieved fewer outlets for alcohol. The question is: does the reduction of wine selling outlets reduce the incidence of binge drinking and other alcohol related problems? Or, is it just another means to concentrate sales in the hands of a few major supermarkets?

3) "Organic wines will be less favoured, partly due to growing scepticism about global warming." ShelfLife February 2010. I find this an interesting argument. Has the cold winter cast doubt on global warming? Do people who drink organic wine do so for environmental reasons? Do wine drinkers even think that the two, wine drinking and global warming, have anything to do with each other? In fact according to a survey carried out by Bord Bia on the attitude of Irish consumers towards organic products, environmental aspects did not rate highly in their decisions to buy organic. Taste, health and traceability were much more important to consumers. The question that poses itself then is why people drink less organic wine? I believe the reason is that when you can't see a product you won't buy it.

These are a few thoughts on the dwindleing sales side. However, the recession has had an influence also on the production side. Quite a number of small importers and traders have gone out of business. Others have formed stronger organisations by joining businesses. The increased buying power of fewer but stronger merchants coupled with the demand for cheaper wines puts many a small producer into great difficulties. For a family run business to react to these demands and survive is to produce more and keep costs down. That means more kilos of grapes per ha and lower quality. If the year is bad and quantity is low then this can push a producer to the brink. The effect is the same as with fewer outlets, there is a concentration of ever bigger producers which is to the detriment of diversity and quality.