Wine as a tradable commodity
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Wine as a tradable commodity

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  • Wine has been traded since before the days of the Roman empire. Rome in particular, established a vast trading network with surrounding places such as Britain, Spain, France, the Middle East, and North Africa. Rome imported items such as wool, tin, glass, silks, and dyes, in exchange for Roman goods, which included wine.This trading network, including the exchange of wine, was vital for the success of the Roman empire, in fact when the Roman empire collapsed, so did the trade system, and the Mediterranean waterways became dangerous places for merchants, due to unpoliced piracy.
  • It is currently thought that the Nile Delta was the first major centre for early wine trade. Some historians believe that this early trade model is the foundation of modern economy. Ships and land vessels would carry wine hundreds and thousands of kilometres to other parts of the Mediterranean. This also influenced other empires, such as the Babylonians, who around this time establishes rules around small trade of wine, in the form of shops.
  • During medieval times, wine trade was crucial to the Christian church and Monasteries. The production and trade of wine provided needed finance for political and military dominance. The Cistercian Monastery in the Rheingau area, became the most important and biggest producer of wine in Europe during the 12’th and 13’th centuries, having up to 200 outlets for trade.
  • Although wine making in France is now larger in size, than in the 14’th Century, the wine making area in Germany is three times smaller now, than is was back then. Whole shipments dedicated to this trade, called “The Wine Fleet”, were crossing between English, French, and German ports by the hundreds. In other flourishing parts of Europe, such as Italy, wine producers first began to garner respect in the area of wine making, and some of these families are still some of the most highly respected names in wine making today. These Italian families traded in wines from Tuscany, Bordeaux, Spain, and Portugal.
  • Although California and other new world wine regions, including New Zealand, thrive in today’s markets, it was initially tough going for new world wine regions breaking into the already thriving market, due to scrutiny and prejudice from old world wine regions. Help came in the form of Phylloxera, which wiped out huge portions of European wine regions, providing the US an opportunity to fill the gap in the market. Today, European wines do less well on a global scale, due toeing undermined by the new world as a whole.
  • The competitive advantage new world wine regions have over their old world counterparts is largely due to the more liberal approach to wine making. New Zealand appears to have the most liberal laws, followed by Australia and South Africa. This allows the wine making process to be better manipulated in favour of lower overheads, and also widens the scope of options in which to manipulate the wine itself to better suit a target market. This can include adding sugar, or, caramel, to “improve” the wine for markets demanding sweeter wines.
  • Because of the less retrained ability of new world wine producers, along with the lack of conviction to remain loyal to traditional methods, the world wine market tends to favour new world styles in general, du to their lower cost, and the fact they are produced with target markets in mind.

Wine as a tradable commodity Wine as a tradable commodity Presentation Transcript

  • Wine as a Tradable Commodity By Hayley Green http://ethicalweddings.com/blog/wp-content/uploads/2007/03/37418.jpg
  • “Wine is one of the most civilized things in the world and one of the most natural things of the world that has been brought to the greatest perfection, and it offers a greater range for enjoyment and appreciation than, possibly, any other purely sensory thing.” - Ernest Hemingway
  • Wine as a Tradable Commodity Wine has been traded since before the days of the Roman Empire. Rome, in particular, relied on trade to remain strong. This included the export of Roman Wine to other areas.
  • Retrieved from: http://historylink101.com/2/Rome/roman-ships.htm Roman Trade Routes – How Far Wine Travelled!!!
  • Early Wine Trade  Although most significant in Rome, wine trade is thought to have first originated in Egypt.  The modern economy is thought by some to be founded on the Egyptian wine trade.
  • Medieval Times  The wine trade began to expand more, with wine being made by monks and the Christian Church.  The biggest exporter of wine in the 12’th and 13’th centuries was a Cistercian Monastery.
  • France’s Wine Trade  Wine became crucially important to France as a trading commodity in the 14’th century.  France, in particular Bordeaux, was exporting so much wine to England, records were not broken until 1979.
  • Movement to the New World  Although today’s Chilean area was first to establish Vitis vinifera, it was the area of California that flourished as a New World wine area initially.  The establishment of vines in the 19’th century, along with the opening of trade markets during the gold rush, established the region as the greatest wine producer in the United States.
  • Today’s Market  Today’s market is heavily dominated by new world wines.  This is mainly due to the more liberal approach to wine making in these regions.  Less strict laws provide a competitive advantage due to lower production costs, and ability to better make a product suited to a target market.
  • Today’s Wine Regions, Old and New Retrieved from: http://winefolly.com/review/new-world-vs-old-world-wine/
  • Wine Trade Influences  The tendency of today’s wine market to favour new world wine styles, has led to the world of wine being blown open.  Old world wine making techniques are still valued, but are not necessarily in as high demand as new world wine styles, which push the boundaries of wine making and are more experimental.  This demand for new world wine has produced a tendency for temporary trends to develop.
  • Current Health of the Market  The consumption of wine on a global scale is stronger than ever, due to its constant upward trend.  The decline in wine consumption in traditional wine-drinking countries, is more than compensated by the incline in wine consumption in non-traditional areas.
  • Future of the Wine Market  By viewing economic patterns, wine demand is expected to be concentrated in three main areas.  These areas are China, India, and South East Asia, excluding Muslim Countries, steeped in tradition.
  • Challenges for the Future  France is expected to suffer a great decline in demand for its wine, in consistence with its already decreasing interest.  The only way to prevent this would be to loosen the laws around wine making, and taking a new approach to old traditions.
  • Challenges to the Future  Global warming poses a big threat to the future of the wine industry.  Climate change will change the terroir of main wine regions.  New approaches to wine making and viticulture will need to be established, and new wine regions will develop as their climates fall more in to line with ideal grape growing conditions.  Genetically modified varieties are already being considered.
  • References History Learning Site. (n.d.). Ancient Rome and Trade. Retrieved from http://www.historylearningsite.co.uk/ancient_rome_and_trade.htm The Story of Wine. (n.d.). History of Wine and the Vine [electronic hand-out]. Retrieved from WSC5.04 Introduction to Wine Business Online 2013 website: http://eitonline.eit.ac.nz/pluginfile.php/176763/mod_resource/content/0/Week_02/HistoryofWineAndTheV ine.pdf Tipples, R. (2008, September). Can Europe recover? Old World wine tradition undermined by New World attitude: the counterattack – Arrogant Frogs and Butterflies. Paper presented at the National Centre for Research on Europe Conference. Retrieved from http://www.eusaap.org.nz/docs/panel01/Can%20Europe%20recover%20-%20powerpoint%20ve2.pdf Landsperger, J. (2007). The Impact of New World Wines on the UK Market (Bachelor’s thesis, Edinburgh Napier University). Retrieved from http://books.google.co.nz/books?id=xQSFTLW90P8C&pg=PA51&dq=modern+world+wine+trade&hl=en&s a=X&ei=Eo0NUsKtHI79kAW9iIDQCg&ved=0CEQQ6AEwBQ#v=onepage&q=modern%20world%20wine%20t rade&f=false New World vs. Old World Wine. (2007). Wine Folly > Learn about Wine. Retrieved from http://winefolly.com/review/new-world-vs-old-world-wine/ Anderson, K. (2004). The World’s Wine Markets: Globalization at Work. Chester, UK: Edward Elgar Publishing Limited. Comite National Des Conseillers. (2010). Wine in the World as we Approach 2050: 21’st Century Market Challenges – Foresight: Report. Retrieved from www.cnccef.org/TPL_CODE/TPL.../ID.../46-publications.htm