Foreign Exchange The value to a community of exporting wine out of their region By Jenna Lee  #2011002746 Introduction to ...
Foreign Exchange of Wine <ul><li>History of the foreign exchange of wine from old world to new world tells us that trends ...
Foreign Exchange of Wine <ul><li>Isabel Estate Vineyard is an example of how a New Zealand winery has the ability to expor...
The History of Foreign Exchange of Wine   <ul><li>Timeline of significant wine events for exchange </li></ul>5000BC Georgi...
The History of Foreign Exchange of Wine   <ul><li>5000BC It is still unclear where wine was first made however grape seeds...
The History of Foreign Exchange of Wine   <ul><li>3000BC was when the first wine trade centre was thought to have been cre...
The History of Foreign Exchange of Wine   <ul><li>2000BC Greeks experimented with producing different styles of wine and m...
The History of Foreign Exchange of Wine   <ul><li>500AD the basis of the “Old World” had been established by the Romans.  ...
The History of Foreign Exchange of Wine   <ul><li>1700-1900AD Wine was introduced to the New World.  </li></ul><ul><li>Win...
Foreign Exchange of Wine Today   <ul><li>The world is a very different place from what it once was. It is constantly evolv...
Foreign Exchange of Wine Today   <ul><li>The worlds wine production is currently in decline according OIV State of the Vit...
Foreign Exchange of Wine Today   <ul><li>The new world wine production is relatively stable overall however majority of wo...
Foreign Exchange of Wine Today   <ul><li>It is Europe that creates the wine trends that impacts on the rest of the world. ...
Foreign Exchange of Wine Today   <ul><li>The recession has been particularly hard on wine producers.  </li></ul><ul><li>In...
Exporting Wine to Enhance the Net Wealth of a Region   <ul><li>If international trade did not exist we would be limited to...
Exporting Wine to Enhance the Net Wealth of a Region   <ul><li>A flourishing wine industry will directly result in the gro...
Exporting Wine to Enhance the Net Wealth of a Region   <ul><li>The ability to export wine is important to a business for o...
Exporting Wine to Enhance the Net Wealth of a Region   <ul><li>“ Isabel Estate proprietor Michael Tiller said Emirates wan...
Exporting Wine to Enhance the Net Wealth of a Region   <ul><li>There has also been an increase of staff to meet production...
Challenges for Foreign Exchange of Wine Now and in the Future   <ul><li>There are many challenges that the wine industry f...
Challenges for Foreign Exchange of Wine Now and in the Future   <ul><li>In New Zealand the strong dollar means that produc...
Challenges for Foreign Exchange of Wine Now and in the Future   <ul><li>International trade barriers to entry and excise a...
Challenges for Foreign Exchange of Wine Now and in the Future   <ul><li>New Zealand Wine has a competitive advantage with ...
Challenges for Foreign Exchange of Wine Now and in the Future   <ul><li>In future New Zealand wineries will continue to ex...
References   <ul><li>Book References: </li></ul><ul><li>Ballingall, J. (2011). The Global Economic Recovery, Winepress – T...
References   <ul><li>Online References: </li></ul><ul><li>  </li></ul><ul><li>EIT wine through the ages, lecture retrieved...
References   <ul><li>Image References: </li></ul><ul><li>Egyptian wine trade,  image retrieved 20 August 2011: </li></ul><...
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Foreign Exchange - The value to a community of exporting wine out of their region.

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  • Name: Jenna Lee Student ID: 2011002746 Email address for receipt: j3nnal33@ gmail .com Programme: Vit &amp; Wine Online Course: WSC5.05 Introduction to Wine Business - OL 2011 Lecturer Name: Ken Sanderson Assignment Title: Resource Assessment, Readings and Questions, Research Report on the Global Wine Industry
  • Reference story of wine /century of wine
  • http://en.wikipedia.org/wiki/File:Georgia_high_detail_map.png
  • http://en.wikipedia.org/wiki/File:%C3%84gyptischer_Maler_um_1500_v._Chr._001.jpg
  • http://upload.wikimedia.org/wikipedia/commons/d/d2/Dactylosphaera_vitifolii_1_meyers_1888_v13_p621.png
  • (http://en.wikipedia.org/wiki/Globalization_of_wine)
  • oiv
  • (http://en.wikipedia.org/wiki/Globalization_of_wine)
  • (http://en.wikipedia.org/wiki/Globalization_of_wine)
  • (http://en.wikipedia.org/wiki/Globalization_of_wine)
  • http://www.nzte.govt.nz/About-NZTE/What-we-do/Pages/What-we-do.aspx
  • http://www.nzte.govt.nz/About-NZTE/What-we-do/Pages/What-we-do.aspx
  • http://www.nzte.govt.nz/About-NZTE/What-we-do/Pages/What-we-do.aspx
  • Foreign Exchange - The value to a community of exporting wine out of their region.

    1. 1. Foreign Exchange The value to a community of exporting wine out of their region By Jenna Lee #2011002746 Introduction to Wine Business Assignment 1 Part B
    2. 2. Foreign Exchange of Wine <ul><li>History of the foreign exchange of wine from old world to new world tells us that trends are still dispersing from the old world waiting for the new world consumers to catch up with the level of wine sophistication required for wine exports to flourish. </li></ul><ul><li>Currently the wine industry is struggling to balance the supply and demand of wine with significant impact from oversupply in the past. </li></ul><ul><li>The recession has also had produced difficulties for wine producers ability to produce wine and for consumers to have the disposable income to purchase wine. </li></ul>
    3. 3. Foreign Exchange of Wine <ul><li>Isabel Estate Vineyard is an example of how a New Zealand winery has the ability to export wine and enhance the net wealth of the region by doing their part to make a direct and valuable contribution to the community and the New Zealand economy. </li></ul><ul><li>The wine industry faces many challenges with recovery from the global recession, a strong dollar with competitive markets, international trade barriers and excise in New Zealand -forcing wine producers to be taxed for New Zealand’s societal drinking issues. </li></ul>
    4. 4. The History of Foreign Exchange of Wine <ul><li>Timeline of significant wine events for exchange </li></ul>5000BC Georgia Nile Delta 3000BC 2000BC Roman Empire Old World 500AD 1700-1900AD New World
    5. 5. The History of Foreign Exchange of Wine <ul><li>5000BC It is still unclear where wine was first made however grape seeds collections found in modern day Georgia- indicate the production of wine could have been first established here. </li></ul>
    6. 6. The History of Foreign Exchange of Wine <ul><li>3000BC was when the first wine trade centre was thought to have been created by the Egyptians whom used the Nile Delta to transport wine to other Mediterranean trading centres. </li></ul>
    7. 7. The History of Foreign Exchange of Wine <ul><li>2000BC Greeks experimented with producing different styles of wine and more importantly – quality wine, which only the wealthy could demand. </li></ul><ul><li>But it was the rise of the Roman Empire that was pivotal for the foreign exchange of wine. </li></ul><ul><li>As the Romans conquered region-by-region they expanded by taking wines, vines and introducing advancement in viticultural techniques wherever they went. </li></ul>
    8. 8. The History of Foreign Exchange of Wine <ul><li>500AD the basis of the “Old World” had been established by the Romans. </li></ul><ul><li>This had impacted upon the net wealth of Rome. The standard of living, trade, military campaigns and settlements grew a market economy had been established and the wine industry flourished until the fall of the Roman Empire. </li></ul><ul><li>The fall of the Roman Empire lead to a declined in wine trade and the wine industry. </li></ul>
    9. 9. The History of Foreign Exchange of Wine <ul><li>1700-1900AD Wine was introduced to the New World. </li></ul><ul><li>Wine storage and wine making advances in Europe revolutionised the wine industry as alcoholism prospered before the Phylloxera beetle destroyed vineyards of Europe. </li></ul>
    10. 10. Foreign Exchange of Wine Today <ul><li>The world is a very different place from what it once was. It is constantly evolving with technology. Wine today is very different from the wine that was produced thousands of years ago. </li></ul><ul><li>Wine tastes different and it is now produced with advances in vineyard management with taste in mind. </li></ul><ul><li>Wine is now packaged and stored so it will not spoil in transit or storage. </li></ul><ul><li>Technology has changed the way we communicate and we now have to market to the world with labels and brands. </li></ul><ul><li>Globalisation, consumerism and its effects have significant impact on Foreign exchange today. </li></ul>
    11. 11. Foreign Exchange of Wine Today <ul><li>The worlds wine production is currently in decline according OIV State of the Vitiviniculture World Market March 2011. </li></ul><ul><li>The world is estimated to have produced 260 millions of hl in 2010 which is a percentage change of an estimated –4.1% from 2009 world production of all wines. </li></ul><ul><li>This is heavily influenced by the European Union new community regulations, which gives wine producers in the old world incentive to permanent abandon vineyards for a premium. </li></ul>
    12. 12. Foreign Exchange of Wine Today <ul><li>The new world wine production is relatively stable overall however majority of world wine production and consumption is old world. </li></ul><ul><li>The world is estimated to have consumed 236 millions hl in 2010 which is a percentage change of an estimated –0.1% from 2009 world production of all wines. </li></ul><ul><li>Even thought world production and consumption in trending in decline we are still producing more wine than we are consuming </li></ul>
    13. 13. Foreign Exchange of Wine Today <ul><li>It is Europe that creates the wine trends that impacts on the rest of the world. </li></ul><ul><li>Italy exports 22% of the worlds wine market followed by Spain that produce 18%, France 15% and South America with a total of 11% of the worlds wine market. </li></ul><ul><li>The worldwide economic crisis has also had a strong impact on the wine industry world wide, with the decrease in production, consumption and an increase in the trade of bulk wine . </li></ul>
    14. 14. Foreign Exchange of Wine Today <ul><li>The recession has been particularly hard on wine producers. </li></ul><ul><li>In New Zealand the Savalanche of 2008 lead to large corporate wine producers to use supermarkets as a dumping ground. </li></ul><ul><li>Good quality wine at a cheap price has corrupted the New Zealand marketplace and tarnish the name of many good brands here. </li></ul><ul><li>Now that the savalanche is over, industries are still demanding quality wines at cheap prices which are just not sustainable for wineries in New Zealand to produce. </li></ul>
    15. 15. Exporting Wine to Enhance the Net Wealth of a Region <ul><li>If international trade did not exist we would be limited to using only the resources that our nation could produce. </li></ul><ul><li>Foreign exchange is therefore necessary to obtain goods it cannot produce itself. </li></ul><ul><li>Therefore we attempt to produce better quality goods at a minimal cost. </li></ul><ul><li>We can then pass this cost on to consumer all around the world allowing a stabilised price international for the cost of wine. </li></ul>
    16. 16. Exporting Wine to Enhance the Net Wealth of a Region <ul><li>A flourishing wine industry will directly result in the growth of other industries within that community. </li></ul><ul><li>The packaging industry will be affected with the increase in demand of glass bottles, screw caps, labels and cartons depending upon the requirements to meet the needs of the end consumer of multiple target markets across the world. </li></ul>
    17. 17. Exporting Wine to Enhance the Net Wealth of a Region <ul><li>The ability to export wine is important to a business for operational growth resulting in increased profitability and long-term sustainability. Thus making a direct and valuable contribution to the community it operates within. </li></ul><ul><li>It will boost the nations economy and society with a higher standard for living for those in that community, creating more jobs due the growth and expansion of that business. </li></ul><ul><li>Workers in that industry that strives will also have the opportunity to receive better pay thus having a higher disposable income to spend in other industries in that nation. </li></ul>
    18. 18. Exporting Wine to Enhance the Net Wealth of a Region <ul><li>“ Isabel Estate proprietor Michael Tiller said Emirates wanted about 850,000 bottles (20 shipping containers) of small-sized 2010 sauvignon blanc and the winery is running 12-hour bottling runs to fill the order.” (Marlborough Express) </li></ul><ul><li>Isabel purchased specialised bottling equipment to meet the single serve airline requirements for Emirates Airline. </li></ul><ul><li>The specialised production methods have resulted in profits and long-term sustainability for the business. </li></ul>
    19. 19. Exporting Wine to Enhance the Net Wealth of a Region <ul><li>There has also been an increase of staff to meet production deadlines for this Emirates order. </li></ul><ul><li>The flow on affect for this significant order for Isabel has stemmed growth in other local industries. </li></ul><ul><li>Packaging sales of screw caps, bottles and labels have increased to meet Isabel’s needs. </li></ul>
    20. 20. Challenges for Foreign Exchange of Wine Now and in the Future <ul><li>There are many challenges that the wine industry faces when it comes to international trade. Worldwide the wine industry has been trying to recover from the global recession. </li></ul><ul><li>The world is still struggling to balance out the equilibrium supply and demand by giving incentives in the old world to cut back on vineyards to focus on quality not quantity when it comes to wine. </li></ul>
    21. 21. Challenges for Foreign Exchange of Wine Now and in the Future <ul><li>In New Zealand the strong dollar means that production costs are now higher and competitive markets are very tough. </li></ul><ul><li>In the past it was cheaper for other countries to export our wine into their country but now it is expensive for them and they are essentially getting less wine for their currency. </li></ul><ul><li>This is also deeply affecting any vineyards here as they are struggling to pay debts as a multiple unpaid payments from offshore are affecting wineries abilities to pay vineyards and their suppliers here. </li></ul>
    22. 22. Challenges for Foreign Exchange of Wine Now and in the Future <ul><li>International trade barriers to entry and excise are another major challenge to the wine industry. </li></ul><ul><li>Excise in New Zealand has increase as of July 2011 in aid to help to combat the excessive drinking of the youth in New Zealand society. </li></ul><ul><li>“ Government has raised the excise on wine, but it's producers rather than consumers who are likely to wear the increase.” (New Zealand Herald) </li></ul><ul><li>It is difficult for wineries to survive in such a challenging industry even though wine export in New Zealand are in growth. The New Zealand government have been content with increasing New Zealand’s standard of living based on supporting New Zealand’s ability to export dairy, meat and forestry. </li></ul>
    23. 23. Challenges for Foreign Exchange of Wine Now and in the Future <ul><li>New Zealand Wine has a competitive advantage with very good reputation worldwide as a consistent producer of high quality wine. </li></ul><ul><li>However it will need time for other markets to mature and realise that France are not the only country that produces fine wine. </li></ul><ul><li>China is the superpower of the world. In time it will become a sophisticated wine drinking nation but for now their consumerism is based on brand and their business dealings have a tarnished reputation with many fraudulent and counterfeit wine operations publicised in the media. </li></ul>
    24. 24. Challenges for Foreign Exchange of Wine Now and in the Future <ul><li>In future New Zealand wineries will continue to export to meet international customer specialised requirements to create growth opportunities for New Zealand wine. </li></ul>
    25. 25. References <ul><li>Book References: </li></ul><ul><li>Ballingall, J. (2011). The Global Economic Recovery, Winepress – The official magazine of Wine Marlborough. </li></ul><ul><li>Brook,S. (2000). A Century of Wine – The Story of a Wine Revolution. North America: The Wine Appreciation Guild. </li></ul><ul><li>Johnson, H. (2004). The Story of Wine – New Illustrated Edition. Great Britain: Mitchell Beazley </li></ul>
    26. 26. References <ul><li>Online References: </li></ul><ul><li>  </li></ul><ul><li>EIT wine through the ages, lecture retrieved on 2 August 2011: </li></ul><ul><li>http://eitonline.eit.ac.nz/file.php/1356/Week_02/WINE_THROUGH_THE_AGES.pdf </li></ul><ul><li>EIT History of wine and the vine, lecture retrieved on 2 August 2011: </li></ul><ul><li>http://eitonline.eit.ac.nz/file.php/1356/Week_02/HistoryofWineAndTheVine.pdf </li></ul><ul><li>Exports, Exports, Exports, article retrieved on 6 August 2011: </li></ul><ul><li>http://www.nzte.govt.nz/features-commentary/Commentary/Pages/Exports-exports-and-exports.aspx?pageId=0 </li></ul><ul><li>Isabel eyes up the long run, article retrieved on 16 August 2011: </li></ul><ul><li>http://www.stuff.co.nz/marlborough-express/news/5451778/Isabel-eyes-up-the-long-run </li></ul><ul><li>Protest reflects wine industry's web of failed payments, report retrieved on 2 august 2011: </li></ul><ul><li>http://www.stuff.co.nz/marlborough-express/news/5452140/Protest-reflects-wine-industrys-web-of-failed-payments </li></ul><ul><li>Soaring dollar adds to wine woes article retrieved on 2 August 2011: </li></ul><ul><li>http://www.stuff.co.nz/marlborough-express/news/5375448/Soaring-dollar-adds-to-wine-woes </li></ul><ul><li>State of the Vitiviniculture World Market March 2011, report retrieved on 2 august 2011: </li></ul><ul><li>http://news.reseau-concept.net/images/ oiv _ uk /Client/2011_note_conj_mars_EN. pdf </li></ul><ul><li>  </li></ul><ul><li>Strong dollar is tough on wineries, article retrieved on 4 August 2011: </li></ul><ul><li>http://www. gisborneherald .co. nz /article/?id=24001 </li></ul><ul><li>  </li></ul><ul><li>Wine: Taxing times for winemakers, article retrieved on 6 August 2011: </li></ul><ul><li>http://www. nzherald .co. nz /lifestyle/news/article. cfm ?c_id=6& objectid =10741153 </li></ul>
    27. 27. References <ul><li>Image References: </li></ul><ul><li>Egyptian wine trade, image retrieved 20 August 2011: </li></ul><ul><li>http://en. wikipedia .org/ wiki /File:%C3%84gyptischer_ Maler _um_1500_v._ Chr ._001. jpg </li></ul><ul><li>  </li></ul><ul><li>Map of Georgia, image retrieved 20 August 2011: </li></ul><ul><li>http://en.wikipedia.org/wiki/File:Georgia_high_detail_map.png </li></ul><ul><li>  </li></ul><ul><li>Phylloxera beetle, image retrieved 20 August 2011: </li></ul><ul><li>http://upload.wikimedia.org/wikipedia/commons/d/d2/Dactylosphaera_vitifolii_1_meyers_1888_v13_p621.png </li></ul><ul><li>  </li></ul><ul><li>All other photo imagery used in this document is property of Isabel Estate Vineyard Limited, images retrieved 20 August 2011 </li></ul>

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