Monday, 30 March 2015

30.3.15 Sherry Boosts Promotion in Spain but Suffers Cuts in Public Funding

The generic promotion of Sherry will focus special attention on the domestic market this year, being the biggest market now, and practically the only one which did not register falling sales last year. The Consejo Regulador has already fine-tuned its promotional plan, basic criteria and priorities but is keeping in reserve €90,000 of its €1.5m budget for this fiscal year.

A further sum of around €300,000 of public money is being added, for the moment, but this is negligible when compared to that received in past campaigns in which grants would double the Consejo’s local funding. While staff at the Consejo are making every effort to obtain more grant money, they are up against public spending cuts, however there may be a ray of light from ICEX, the Government commercial export body. ICEX has money for promotion in Holland and Germany, two of the main European markets in which it wishes to make a push, and there will be a contest for agents to take charge of Sherry distribution in those countries.

The Consejo's generic labels (foto:verema)
Lacking the extra funding, the Consejo presented the basic thrust of the promotional plan to a plenary meeting on Thursday: €350,000 will be destined for the home market. Among the traditional export markets the UK, until recently the principal market, will still get a good chunk of the budget, as will the USA, a market which has shown strong growth in recent years especially for brands for which consumers will pay more. Holland and Germany buy more, cheaper Buyer’s Own Brands (BOB). Third countries, including Japan and Canada already have fixed budgetary amounts assisted by EU money.

It should be remembered that this year’s promotional budget has already increased thanks to higher contributions from the bodegas and the growers. The bodegas doubled their contribution to 2.5 céntimos per litre of wine sold, useful, but far from the 5 céntimos initially hoped for by Fedejerez. At the January plenary meeting at which this increase was approved, the Consejo was asked to present a promotional plan to cover the next 3 years, which if approved might lead to the 5 céntimos Fedejerez had hoped for.

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