South African wine sales over-takes France's in the UK

The latest sales numbers reveals that in the UK South Africa sells more wine than France. For the 12 month period to the end of January sales of South African wine was up with 20% in the UK bringing the total volume to 12.27 million cases (source: Decanter/Nielsen). French wine only sold 12.26 million cases, which was a decrease with 12%. South Africa is now in fourth place and France in fifth, after Australia, USA and Italy. Our hypothesis is that this is a due to production and market structures: The big retail chains accont for an increasing percentage of sales (Sainsbury etc). They prefer buying from suppliers who can deliver big volumes. South Africa has many such wine producers (on a vineyard area that is approximately the same size as Bordeaux there is less than 600 producers, compared to 10,000 in Bordeaux). In France the production is fragmented and the industry is dominated by many small producers – who have difficulties dealing with very large buyers demanding volumes. The situation is the same in Sweden (South Africa is the biggest supplier of wines to Sweden and France is in fifth or sixth place): one large buyer (who in this case has a monopoly) prefers dealing with large volumes from few suppliers rather than a wide variety of small producers. What do you think? Read more: www.decanter.com