Since early 2007, the Romanian wine market, which has witnessed slow growth lately, has seen importers fighting to win over Romanians' consumer preferences.
The entrance of foreign players in full gear, which began in 2006, and was helped by the elimination of custom duties on January 1 of this year, could herald serious problems for Romanian producers, who have had a hard time recovering after a weak harvest in 2005.
The import boom witnessed last year, when imports were more than 60% higher than exports for the first time in Romania's history, is expected to continue in 2007, thwarting domestic producers' plans. Imports are currently in favour on the local market owing to low prices compared with domestically produced wines. Nevertheless, few were the import wines that reached Romanians' tables as such, with a large part of them being bulk wines. Under the circumstances, producers no longer found exports as attractive as they had several years ago.
"The small production in 2005 had negative effects on wine exports, with two major consequences. Romanian wine prices are high, which has affected our competitiveness. Also, the small supplies currently available made Romanian producers opt for the domestic market, rather than exporting abroad," said Basil Zrnoveanu, vice-president with the Association of Romania's Wine Producers and Exporters (APEV).
At the same time, there is also tight competition abroad, with producers constantly aware that price increases will affect consumer choices.
After a disastrous year in 2005, production for 2006 is normal, "an average one in terms of quality".
"However, production was not large enough to supplement the inadequate supplies from the previous harvest. The outcome? Prices remain high in Romania, while competitiveness remains low. The market remains unbalanced for Romania as an EU member," Zarnoveanu explains.
Considering the insignificant advance of the domestic wine market compared with other sectors such as beer or fruit juices, Romanian producers are again facing to a big challenge.
"Strategies differ depending on each producer's market position. Some will try to offer imported wines; some will try and secure their business through specific brands, while others will completely vanish. What is important is that each producer should find that reason, which makes a consumer choose it," stated Daniel Negrescu, brand manager with Murfatlar, one of the biggest domestic wine producers.
Imported wines will not rapidly gain market share from the Romanian winegrowers, and are expected to have a stronger presence in the second half of the year.
The wine market
Witnessed a slow growth rate of late
Last year's import boom will continue this year thwarting domestic producers' plans
A weak harvest in 2005 has had a negative impact on wine exports in terms of prices and competitiveness
2006 domestic production was not large enough to supplement the small supplies from the previous harvest
Imported wines will rapidly gain market share from Romanian wine producers, but will have a stronger presence in the second half of 2007
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