Sherry has missed a great opportunity to put an end to the
prolonged drop in sales, but at least the volume lost has been compensated for
by the recuperation of prices. In the Spanish market, poorer sales of
Manzanilla brought down the good results of other wines because of the lack of
agreement on the use of bag-in-box (BIB), which is not permitted in the
Denominacion de Origen (DO), despite growing demand.
Everything was set to change in 2013 after long years of
falling sales, but in the end another drop was recorded, of 7.56%, or 10% in
exports and 2% at home, despite growing critical acclaim. Sales of Manzanilla –
the best-selling Sherry in Spain - are down 5%, while Fino and Cream are up an average 3%.
The fall in sales of Manzanilla is a result of producers simply
de-classifying their wine and selling BIB without the DO to the many fairs and
festivals. The OIV (International Wine Organisation) has proposed a change to
the tariff code for BIB, considered up till now as bulk wine for customs
purposes, as this format is common in other DO’s and is very popular with
consumers, especially in Scandinavia. The Consejo Regulador however, sees the
BIB as inferior in quality to glass.
Nonetheless, increasing numbers of Manzanilla producers are
prepared to forego the DO and sell at least some of their wine in BIB. At the
end of the day, it is the same wine, however, but there is a risk that the DO
might lose some of its brands, in a similar way to some brandy brands which
chose to blend brandy with spirit and call themselves “spirit drinks”. Wines
sold without the DO do not figure in the Consejo statistics, and could amount
to hundreds of thousands of litres, distorting the figures considerably.
There is still work to be done in foreign markets, but at
least prices are firmer, especially in Buyers Own Brand (BOB) and Distributors’
brands. A key factor in this is the disappearance of Nueva Rumasa, whose
aggressive low-price strategy forced prices down to little above cost – as low
as 70 centimos a bottle. Now, as prices rise, sales are dropping, but perceived
quality is rising, especially in Holland and Germany, the two big BOB markets.
In the UK, the biggest export market, sales have also been
falling - by a million litres, or 8.5% - especially with Cream and Pale Cream
styles, mainly from a lack of special offers over the festive period by the two
leaders, Croft and Bristol Cream. BOB sales have risen slightly, however.
Sales of Cream in the USA have also slipped, but those of
the dry styles have increased markedly, especially Fino, Manzanilla and
Amontillado. The Asian market has also seen a large boost, albeit from a small
base. In conclusion, Jerez has seen smaller volume sales but is keeping up
turnover.
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