Imported wine gives shivers to local producers

The competition on the Romanian wine market seems to be getting tougher, as several foreign companies have shown interest to buy land and start production here. “In 2006 we imported wine of EUR 27 million and we exported wine of EUR 18 million. We expect that imported wine value to go higher this year,” said Basil Zarnoveanu, GM at Provinum, a local wine producer.

Big investment plans for local producers
Companies such as Vincon Vrancea, Murfatlar, Cotnari, Jidvei and Vinexport Focsani, the main national producers according to the marketing research company MEMBR Romania, announced major investments to modernize production lines and deposits in vineyards or to buy land.
“The bottling capacity of Murfatlar is at present 150,000 bottles per day. We plan to increase this capacity by 100,000 bottles per day by installing a new production line. The investment is evaluated at EUR 1.1 million. Also, we plan to invest EUR 1.7 million to replant 115 hectares of vineyard,” said Laura Musat, PR Manager at Murfatlar Romania. Last year, the company's turnover was EUR 36 million and for this year the main objective is to increase up to EUR 42 million.
Also, Vinia Iasi has plans to take a loan of approximately EUR 12 million for new investments. “Most of the money will be invested in the acquisition of new plantations and also to buy new agricultural machines,” said Titi Babusanu, marketing manager at Vinia Iasi.
Vincon Vrancea, a company owned by former Romanian football player Gheorghe Popescu, has plans to grow substantially. Company representatives have said that this year they target a turnover of EUR 39 million, 15 percent higher than in 2006.
consumer habits change
Expectations for bigger profits this year are supported, as producer representatives say, by several changes in the consumption habits of clients. According to a MEMRB study, the sales in supermarkets, hypermarkets and general stores have grown steadily.
“Our target is to inform and educate Romanian clients to try the new imported wines in retail stores,” said Dragos Mindreci, marketing and communication manager at Wine Deposit (DDV), part of RTC Group. The Wine Deposit has introduced Romanian consumers to wines imported from Chile, South Africa, Australia, Italy, France and Spain.

Big expectations for exports
At the same time with expanding local production, the main Romanian producers plan to conquer international markets.
“Last year, Murfatlar exported 20 percent of its total production to the U.S., Israel, Italy, Finland and Germany. For this year, we aim to raise the exports up 20 percent and to get to new markets such as China. We bet on Romanian communities in these countries that are a niche of important consumers,” added Laura Musat.
Also, Halewood expanded the distribution network in the U.S. this year. “We had a great success with Tamaioasa Romaneasca and Feteasca Neagra in the U.S.; they were satisfied with Halewood wines,” said Dan Muntean, GM at Halewood Romania. The total investment made by the group last year rose to EUR 10 million.

Million-euro marketing
In the last two – three years, the marketing and PR budgets have grown substantially for local producers and importers. “The budget is calculated considering the sales numbers. It can go up to 20 percent. Murfatlar, the market leader on the 0.75 bottles segment, spends annually EUR 5 million to promote the company's products,” said Rodica Capatina, president of the Wine Exporters and Producers Association.
Importers also have for this year bigger budgets for promotion. “For marketing we have a budget of EUR 170,000 compared with the 2006 one, which was EUR 60,000” said Dragos Mindreci.
Besides this producers say the participation and the money spent at international fairs are not enough to create a positive image for the Romanian wine industry. According to the Foreign Trade Department officials, almost EUR 400,000 was spent at the last four wine fairs where Romania was present. “We haven't succeeded until now to create a coherent offer. We could begin to communicate this national tradition even in a national brand, but nothing was done yet,” added Capatana. Therefore, players on this market, estimated at EUR 450 million in 2006, have to pick their own fights with the tough competition from the West.

Dana Ciuraru

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