УПРАВЛЕНИЕ И УСТОЙЧИВО РАЗВИТИЕ 2/2017 (63) MANAGEMENT AND SUSTAINABLE DEVELOPMENT 2/2017 (63)

WORLD WINE PRODUCTION IN THE PERIOD 2010–2015 AND COMPARISON BETWEEN WINE PRODUCTION IN AND THE WORLD’S PRODUCERS

Gergana Slavova, Kristina Kozhuharova University of Economics, Varna, Bulgaria

Abstract

World wine production is not a new activity in the world. It is a sector with traditions, that is popular not only in Europe, but on the whole planet. The countries, exposed in the following article, which are the top producers of wine, are the evidence for the previous statement. Among these countries are United States of America, Australia and South Af- rica, beside the European ones. The aim of the article is not only to profile the biggest wine producing countries in the world, but also to catch the dynamics in their production for the six-year period, that we are analyzing (2010–2015) and to compare the produced quality with the exact one in Bulgaria. The tasks we have chosen to accomplish are directly related to the aim of the article – analyzing the quality and the value of the produced wine from the chosen period in our country and the rest of the world at the same time. They are presented average selling prices, different wine varieties, from which we extract – again in Bulgaria and the other countries. The authors’ main conclusions as a result of the analysis are outputted in the following text. They are also captured some of the many opportunities for the future development of this traditional and evolving sector.

Key words: wine, production, European countries, average prices.

JEL: O11,O13, Q13,Q17.

Introduction its distribution. In historical aspect, the drink is Wine is a worldwide-known alcoholic beverage, known from Ancient Greece and Rome. Nowadays mainly made from fermented grapes. These fruits thinking economically, wine is one of the most val- are fermented without added sugars, acids, en- ued drinks, which is preferred for consuming in zymes, water or other nutrients [3]. During the many occasions. The whole production process is process the yeasts in the grapes consume the sug- quite complicated, because the different countries ars and produce alcohol and carbon dioxide [1]. and regions have their own specific elements that The different kinds of grapes and yeasts from all are connected with the agriculture conditions and around the world produce different wine sorts. The traditions. In general, the processes of creating beverage could be made by other fruit, but the most wine could be presented the following way [1]: widespread amongst them are grapes [2]. ‒ extracting juice, from which the wine The aim of this article is to analyze the biggest is produced later; wine producing countries, also to catch the dynam- ‒ fermentation of the juice; ics in their production for a six-year period (2010– ‒ filtration and deposition; 2015) and to compare the quantity of the produced ‒ cultivating and bottling the wine. wine with the same in our country, for the same Depending on the grape’s juice colour and the period. The tasks we have chosen to accomplish production technology, wine could be several types are directly related to the aim of the article- analyz- [5]: ing the quality and the value of the wine from the ‒ White wine; chosen period in our country and the rest of the ‒ Red wine; world, presented by the ten biggest producers. ‒ Pink wine; People have been managing viticulture and pro- ‒ Orange wine. ducing wine from ancient times [2]. In Bulgaria, Depending on the sugar and alcohol composi- wine-trade starts with the Thracian tribes, but as tion, each of the top groups divides to: time goes by-starting with the establishment of our ‒ Dry wine; country until nowadays, the production and con- ‒ Semi-dry wine; suming of wine is considered a family tradition in ‒ Semi-sweet wine; many Bulgarian homes. ‒ . The evolving of wine as a widespread beverage There is two more groups special wine, which comes from Caucasus [3]. From a geographical are very different from the mentioned above: and social point of view, wine distribution is con- ‒ frothy ones, such as Champagne and spar- nected to spreading Christianity around Europe. kling wine; The main reason for that is that according to the ‒ fortified with alcohol, such as Sherry, Ver- Bible verses wine is the symbol of Jesus Christ’s mouth, Madeira, Malaga, Porto. blood. This makes the beverage popular and helps Gergana Slavova,Kristina Kozhuharova

According to data from FAO (Food and Agricul- Chile, Australia, South Africa, China and Germany ture Organization) 75 866 m2 land is used for - [6]. We could present this data in a tabular form in ing grapes [8]. Approximately 71% of the world Table 1, using quantity produced wine in hectolitres production is turned into wine, 27% is consumed in as an indicator. We should know that 1 hectoli- fresh condition and 2% is made into raisins. Part tre=100 litres. Using the information from Table 1, from the cultivated grapes is used for producing we could bring out the difference rate in the last juices. The land, that is covered with vineyards year, which is the highest for Chile and Italy, but is marks a rise with 2% each year [8]. negative for Spain, Germany and Argentina (Ta- The biggest wine producers in the period 2010– ble 1). 2016 are France, Italy, Spain, USA, Argentina,

Table 1. Quantities produced wine in hL by the biggest wine producing countries in the world (2010–2015) Country/year 2010 2011 2012 2013 2014 2015 Difference rate (2015/2014) Italy 48 525 42 772 45 616 54 029 44 229 48 869 10% France 44 381 50 757 41 548 42 134 46 804 47 373 1% Spain 35 353 33 397 31 123 45 308 38 211 36 600 -4% USA 20 887 19 140 21 650 23 590 22 020 22 140 1% Argentina 16 250 15 473 11 778 14 984 15 197 13 358 -12% Chili 8 844 10 464 12 554 12 820 10 500 12 870 23% Australia 11 420 11 180 12 259 12 310 12 020 12 000 0% South Africa 9 327 9 725 10 569 10 928 11 316 11 310 0% China 13 000 13 200 13 511 11 780 11 178 11 178 0% Germany 6 906 9 132 9 012 8 409 9 202 8 788 -4% Source: [6].

As we can see from Table 1, Italy and France biggest consumer of wine and is followed by France are constantly competing against each other for the and Italy. The decreased drinking of the beverage first place in wine production, but Italy keeps its first in Europe can be explained with the preventive position for the analyzed period (2010–2015) and is health care, that Europe engages in and also with followed tightly by France. We could ascertain from the changing cultural perception and the desire for this economical comparison that some of the coun- more high-volume alcohol drinks of the Europeans. tries producers mark a consistent rise, such as USA America isn’t the only country, where wine is wide- and Chile, but there are also others with a standstill spread lots of the beverage is drunk in China, Great like Australia and China. At the same time, Spain, Britain and Argentina. These countries account a Argentina and Germany account a hesitant drop in remarkable rise in producing and consuming for the the winemaking. Overall, there is a trend that could period 2014–2015. We could bring out a tendency be estimated for the analyzed period – the coun- in the production and consumption of wine on an tries in the European Union are producing less international level to make it clear whether the wine, than those, that aren’t members. One of the world provides or drinks more wine. main reasons for that is the agriculture politics in We could analyze this tendency for the period the eradication of the vineyards, in which the 2008–2015. Europe takes part. The last few years, there is an oversaturation of the wine markets and this is why 300 289 this critical measurement has been taken on – the 290 aim is to overcome this so called „wine lake”. Other 280 272 274 crucial factor is the dropping consumption of wine in 269 267 269 270 264 Europe, which is compensated by USA, Argentina 258 and the countries in South Africa. In relation to the 260 last statement, we could determine the biggest 250 consumers of wine in the world and catch the dif- 240 250 242 243 244 243 ference in the consumption for the last year. The 230 241 239 240 same goes with drinking wine, as it does with mak- 220 ing it – Europe drinks less and less wine and marks 2008 2009 2010 2011 2012 2013 2014 2015 a drop in the numbers. The percentages may vary, but the tendency, in general, is a decrease in wine Production (m.hL) Consumption (m.hL) consumption. Not long ago, the biggest users and Fig. 1. Production and consumption of wine in the producers were the same countries, but lately this world (2008–2015) has changed. Nowadays, USA is considered the WORLD WINE PRODUCTION IN THE PERIOD 2010-201 AND COMPARISON BETWEEN WINE PRODUCTION IN BULGARIA …

We see from Fig. 1, that before 2008 the con- tuguese. That same quantity changes considerably sumption of the drink in hectolitres is bigger that the in the next five years, which is shown in Table 3. production, but there comes a time (2012), when the numbers are equivalent. For the whole period, Table 3. Production of (2011–2015) we could account, that people consume less than Year Produced wine (mln. hL) they produce. If we compare the two main proc- 2011 188 471 esses here, the absolute costs show us bigger pro- 2012 137 650 duction, but also a relatively stable consumption. 2013 188 341 Nowadays, 40% of the whole made quantity is 2014 79 503 drunk in a different from the origin country. That is a 2015 151 090 drastic increase in comparison with the first years of our century, when the world import had been only In 2014, our country is among those with the 25%.The more developed international trade leads most serious drop in the production, according to to a better and free choice. In 2015, the import OIV [7].The situation is radically different in 2015, worldwide is about $32.6 billion. The import follows when both Bulgaria and Chile mark the highest the consumption, so it’s not a surprise that the fast- leap-we score a 106% rise. est rising country in drinking wine is also the big- gest importer – we could see the data in Table 2. 210 000 188 471 188 341 Great Britain is on the second place, followed by 190 000 Germany. 170 000 151 090

Table 2.Ranking of the wine world import in the 5th 150 000 biggest importers (2015) 130 000 N Country Import ($ million) Percentage 110 000 137 650 1 USA 5.6 17.2% 90 000 2 Great Britain 4.5 13.9% 70 000 3 Germany 2.8 8.4% 79 503 50 000 4 China 2 6.2% 2011 2012 2013 2014 2015 5 Canada 1.8 5.5% Production (m.l.)

Concerning the sort structure in Bulgaria, red Fig. 3. Produced wine in Bulgaria in million litres wine sorts are cultivated on about 58% of the land (2011–2015) and white wine sorts – 42%.We can find their per- centage in divided sorts in the country for 2015 on The Bulgarian export for 2015 overcomes 50 Fig. 2. m.l. and the produced quantity is about 130 m.l. In the same year, we export mainly for China, Great Britain and Germany, where the customers have 6% higher requirements. In 2012, 90% of the Bulgarian 16% 7% export for third parties is shipped to Russia, but for the last year the percentages go down to 70%.The cabernet import in our country is a small part of the whole sauvignon market – 5–10%, depending on the year. From the merlot imported in 2014 wine, white wine is 36.6%, fol- 14% lowed by red and rose sorts – 35.3%. In general, the import is declining since 2012 with 44% and 14% with 2.2% since 2013. Bulgaria imports mainly from dimiat Italy, France and Germany. The next serious im- porters are Chile, New Zealand and Argentina. 14% red misket For the past few years, there’s been noticed an increase in the quality of the produced wine, which

Fig. 2. Produced wine in Bulgaria, as a percentage of leads to higher prices. definite sorts (2015) The Bulgarian high-graded drink has an average price of 10.40 BGN, which is completely compara- The total production of wine in Bulgaria for 2011 ble with the prices on the other European markets. is 188 471 mln. l, which – confronted with the pro- A significant part of the produced wine in the coun- duced quantity in Europe – takes about 2.5% of the try – about 80%, is sold on the home market. That French wine and 16.2% of that that origins in Por- is an interesting fact in terms of the lower solvency of Bulgarians, as consumers, but as we can see, Gergana Slavova,Kristina Kozhuharova the long traditions, inherited by the Thracians in Some of the ways the sector could evolve in the drinking the beverage, help the produced quantity future are introducing new sorts Bulgarian wine out to be sold almost completely in the country pro- of our country’s borders, getting involved in wine ducer. tourism or in annual enterprises. We could make an actual comparison of the Bulgaria has solid traditions in the field of pro- wine prices in the EU as a quality low-volume alco- ducing and consuming wine and that is why we holic drink (Table 4). believe, that our country could defend and extend its positions on the market in the future. Especially Table 4. Average prices of wine in Bulgaria and a part if we take in mind the seriously high increase in of the producing countries in EU (€) viticulture and winemaking for the last two years. Country Average price of high-graded wine Not to mention that Bulgarian producers take part in Bulgaria 5.10 National support programme in the wine sector of Spain 5.50 the Republic of Bulgaria for the wine years 2014– Great Britain 12.00 2018. Germany 1.20 We could conclude with the following statement: Bulgaria has always had, has and always will have In 2016, during the international wine producers’ enduring positions on the international wine market, fair – Mondial de Buxelles [11], held in Brussels, that lead to production diversification in the means Bulgaria was honoured with 109 medals – 58 sil- of creating wine tourism, clusters, wineries and vered, 47 golden and 4 Grand prix. This proves, chateaus, that have appeared in Bulgarian in the once again the high quality of Bulgarian wine, de- last five years. scribed in the Bible as „the nectar of Gods”. References Conclusion 1. Mandjukov, B. Winemaking foundations: Theory and We believe the future of Bulgarian wine lies practice. Dionisi. 2015. within the small specialized wineries and their own 2. Chalkov, I. The secrets of winemaking. Dionisi. 2006. chateaus that are producing wine from the local 3. Dochev, S. Vine. Grape. Wine. Kolhida. 2013. grape sorts – Рamid, Cabernet Sauvignon, Merlot 4. Kirechev, D. Directions of contemporary investing in and Rkatsiteli. For the actual spreading of the local viticulture in Bulgaria. Bulletin of Scientists’ union, Economical sciences – series. Varna. 2013. winery, our country should guarantee an average 5. MacNeil, K. The Wine Bible. 2015. purchased price that brings opportunities for renew- 6. Johnson, Н., Robinson, J. The World Atlas of Wine ing the technological equipment and creating more belongs on your shelf. 2013. market-wise wine. 7. Kirechev, D. Analyzes of producing structures in When it comes to wine making, many resources viticulture in Bulgaria – aspects of stability. Man- are being invested. France and Italy remain the agement and sustainable developing. 3(40). 2013. strongest producers in Europe, as we saw from the 8. Food and Agriculture Organisation. 2017. economical analyzes in this article. Spain is the one [http://www.fao.org/home/en]. with distinguished traditions in the wine business, 9. Top Ten Wine Producing Countries. 2017. [[www.mapsoftheworld.com/world-top-ten-wine- but is always „chasing” the two leaders. Out of producer-countries.html]. Europe, USA is both the biggest consumer and 10. The ranking of the biggest wine exporters in the producer, which could be explained easily with the world. 2017. [www.worldstopexports.com/wine- fact that most of the country is formed by Europe- exports-country]. ans with tradition in this particular sector and that is 11. 24th Edition of Mondial de Bruxelles Annual fair of directly affecting the methods of producing and wine producers held in Brussels. 2017. consuming. The return on investment in this busi- [http://www.concoursmondial.com/en/] ness isn’t only formed by profit, but there are also 12. National support programme in the wine sector for reinvestments in new equipment and modern ca- the wine years 2014–2018. Executive Agency on Vine and Wine 2017. [http://www.eavw.com/]. pacity. WORLD WINE PRODUCTION IN THE PERIOD 2010-201 AND COMPARISON BETWEEN WINE PRODUCTION IN BULGARIA …

ПРОИЗВОДСТВО НА ВИНО В СВЕТА, В ПЕРИОДА 2010–2015 И СЪПОСТАВКА НА ВИНОПРОИЗВОДСТВОТО В БЪЛГАРИЯ СЪС СВЕТОВНИТЕ СТРАНИ ВИНОПРОИЗВОДИТЕЛИ

Гергана Славова, Кристина Кожухарова Икономически университет, Варна

Резюме

Производството на вино в света не е нова дейност. Това е сектор с традиции, който е популярен не само на континента Европа, но и по цялата Земя. Доказателство за това са и разгледаните в настоящата статия страни най-големи производители на вино, сред които освен европейските държави се подреждат също Америка, Авст- ралия и страните от Южна Африка.Целта на настоящата статия е не само да се анализират тези най-големи винопроизводители в света, но и да се обхване динамиката в тяхното производство за анализирания шест годи- шен период (2010–2015) и да се направи съпоставка с произведеното количество вино на територията на нашата страна за същият този период. Задачите, който сме си поставели са в пряка релация с поставената цел, а имено да се анализират количествените и стойностни показатели на произвежданото вино в анализирания период, както в страната, така и на световно ниво, обхващащо десетте най-големи винопроизводители в света. Анализи- рани са също средните продажни цени на виното, както и основните винени сортове от които се произвежда грозде, както в страната, така и на европейския и световен пазар.Изведени са основните изводи до които авто- рите са достигнали при анализ на винопроизводството и свързания с него пазар. Застъпени са и някой основни възможности за бъдещото развитие на сектора.

Ключови думи: вино,винопроизводство,европейски страни, средни цени.