Uncorking investment after flat year for wine market

Wine producer Halewood has seen its exports declining, while sales onthe Romanian market remained constant last year. But things will change this year, when consumptionon the domestic market will decline,believes DAN MUNTEAN, general manager of Halewood Winecellars(Cramele Halewood). The company is planning to achieve similar results in terms of sales and profitability as it did last year, while investing EUR 1million in re-planting vines and equipping its organic vineyard in Murfatlar.

By Corina Saceanu

To what extent did Halewood feel the lack of liquidities on the market last year?

We felt the lack of liquidity through the banks’ lack of appetite to provide credit, especially as in our case our bank wants to pull out of Romania altogether.

What are your plans for sales and profit in 2010, in comparison with 2009? And how do you aim to achieve them?

We hope to retain the same level of both in 2010 through a better quality/price ratio and better communication with our end-user.

What is the value of the local wine market, in your estimation? And what share does Halewood have of this market?

Wine statistics are unfortunately still very unreliable in Romania. We have repeatedly heard that the local market is somewhere in the region of EUR 450 million. There is nothing however that we have seen so far to substantiate this. According to the International Wine and Spirit Record (IWSR), Romania is the ninth largest wine market in the world! Very few people, except for the producers that want to sell wine to Romania, know this. But it is very difficult to say how much of this market is wine produced for self consumption. With this in mind it would be very hard to say with any accuracy where we stand in terms of market share.

How did export and domestic market sales evolve last year and what do you expect for this year?

Exports to the markets that have suffered because of the crisis, for example Latvia, have declined while the domestic market has remained constant. But we expect this to change in 2010. Exports will recover, while the domestic market will decline.

What are your investment plans for this year at Halewood Estates? What about investments in other divisions in the group?

We will grub about 45 hectares and re-plant it with new vines at a capital expenditure of about EUR 1 million. Some more funds will have to go into equipment for our organic vineyard in Murfatlar.

What were the best sold products in your portfolio last year, both in Romania and outside?

Prahova Valley remains the best selling brand, both locally and internationally. We expect this brand to continue to perform well for us despite the tendency of the market to better absorb value products in a more competitive environment.

What are the main export destinations for Halewood?

As a British company Great Britain remains our biggest market with Germany and the Baltics coming close behind.

What is your sales strategy for this year? On what sales channels will the company focus?

Exports, unless the RON keeps on strengthening!

corina.saceanu@business-review.ro