1.

Market Area
1.1 Geographical territory Romania is one of the world's largest wine producers, producing (as of 2009) around 610,000 tons of wine. In recent years, Romania has attracted many European business people and wine buyers, due to the affordable prices of both vineyards and wines compared to other wine producing nations such as France, Germany, and Italy. Romania is one of the world's largest wine producers, producing (as of 2009) around 610,000 tons of wine. In recent years, Romania has attracted many European business people and wine buyers, due to the affordable prices of both vineyards and wines compared to other wine producing nations such as France, Germany, and Italy. Romania has long been one of Europes most important wine producers. Vineyard area hit a peak of 340,000 hectares in the early 1970s, when emphasis was on production of high volumes to supply the ever thirsty Soviet market. Immediately prior to the revolution in 1989, vineyard area had fallen to 277,000 hectares and this downward trend has continued to the present level of around 170,000 hectares. Due to the size of the industry and the complexity of fragmented land ownership (there are estimated to be up to a million vineyard owners), Romanias vineyard register is still incomplete and the country has a derogation until 2010 to complete its inventory. Industry sources estimate that only some 89,000 hectares are Vitis vinifera, the remainder being hybrids that must be removed by 2014. Romania has thus negotiated the right with the EU to replant 30,000 hectares to vinifera varieties. The average harvest size over the past five years has been around 5m hectolitres, although this varies annually according to weather conditions. The harvest in 2005, for example, was notably badly hit, falling to just 2.6m hectolitres. A major concern since joining the European Union has been the issue of seasonal workers. Very little mechanization exists within the growing sector, so hand labour remains essential, but workers are increasingly finding wages more attractive in other European countries. In recent vintages, anecdotal reports indicate that sizeable vineyards have gone unpicked due to lack of workers.
The Romanian wine market grew by 15% in 2011, to a value of about EUR400 million, after two years of decline, according to the data of industry association PNVV. Although consumers' food budgets did not increase last year, sales of premium wines have risen. Winemakers said sales of wine in 0.75 L bottles, with shelf prices of over 12 lei (more than EUR4), increased by 9-20% last year. Constant value sales of wine are expected to witness moderate growth over the next period higher than for volume confirming not only the increasing preference among Romanian consumers for quality wine but also the anticipated reduction in purchases of loose wine directly from producing farms or from open markets. "Bottled imports, including global wine brands, appear to have made a huge step forward in 2007, with several major producers taking on agency portfolios. The wine industry in Romania is changing rapidly and, as one of the largest wine markets in the world, it is likely to gain increasing attention from global brands seeking out a new pool of wine-drinking customers." -

Romania heads in a new direction by Caroline Gilby MW

Wine Murfatlar Pinot Noir,Romania Cramele Halewood,Romania Cramele Recas,Romania Budureasca Origini Tamaioasa Romania Cotnari Francusa,Romania

Grapes Pinot Noir Feteasca Pinot Noir Muscat Francusa

Price 81 lei 27 lei 27 lei 38 lei 27 lei

Popularity 8 721 35 014 35 212 72 128 96 174

1.2 Sale structure : administrative territorial division

Wine regions :There are eight wine regions in Romania.

I. The Transylvanian plateau

This region is situated in the Carpathian Mountains, in the North-Northeast of Romania. The most aromatic, pleasant and lightest wines are produced here. The vines are usually cultivated on sun soaked hills, sheltered from the wind. The white wines are generally well balanced, dry, of good quality and with interesting characteristics. Different varieties of brandy are also produced, such as vinars, plinc, horinc and rchie. They are made from fruit (prunes, apples, pears) and aged in wooden barrels, which gives them a golden colour and high concentration of alcohol. The main vineyards in this region are Trnave and l'Alba Iulia Aiud.

II. The Moldovian hills regions

This region, situated on the Ukraine and Moldova borders, is the largest Romanian wine region, comprising a third of all vineyards. This region has very diverse soils and climatic conditions, and is planted with a variety of grape varieties, white as well as red, and produces a number of different types of wine. The main vineyards in this region are Cotnari, DealurileMoldovei and Odobesti/ Panciu/Nicoresti.
III. The Muntenie and Oltenie hills

This wine region produces high quality red wine. It covers 400 km of land on the south facing slopes of the sub-Carpathian Mountains. The climate is ideal for growing Cabernet sauvignon, Merlot and Pinot noir, and facilitates the production of sweet red wine, rich in flavour and without excessive tannins.
IV. The wine regions of the Banat hills

At the beginning of the 19th Century, wine from the Banat vineyards was well renowned and was sought after by the Imperial Court of Vienna. Today, the parts that are situated on in sandy soil on the plains provide mediocre white wine. On the other hand, the vineyards situated on the high hills produce a good red wine called Kadarka.
V. Crisana and Maramures wine region VI. The Dobroudja plateau wine region (Dobrogea)

Wine has been produced here since Antiquity. This coastal region stretches from the Ukrainian border to the Bulgarian border and has favourable qualities for vine cultivation. Situated in the Southeast of the country, this region benefits from hot and long autumns. There are around 300 days of sunshine a year. Proximity to the Black Sea provides the coolness and humidity necessary for vine cultivation and the development of grey rot. The hills have limestone soil, whereas along the coast, the soil is alluvial and sandy.
VII. The Danube terraces region VIII. The region in the South of the country with sandy and other terroirs

The total grape production fluctuates from one year to another, being influenced by the specific weather conditions. In the year 2007, the grape production totaled 876.6 thousand tons, out of which 58.7% were noble grapes and 41.3% hybrid grapes. The yields are higher on the noble vine plantations compared to the hybrid vines, i.e. 5435 kg/ha versus 3797 kg/ha. The main factors influencing quality are the following: structure of plantations and varieties, technology and weather conditions, the last factor influencing production quality every year.

Source: Ministry of Agriculture and Rural Development (MARD).

2.Market structure
2.1 The main segment of the market to whom the product is addressed
The profile of a common customer of wine,according to a study made by Short Cut Research, is a person that lives in Bucharest and in large cities of the country. In principle, people with higher education and professions for whom assertion matters. Have over 2,000 lei salary and have a lifestyle that calls for hedonism. Are mentioned all professions from architects, lawyers, managers, doctors and specialists in communication. Also those who grew up being part of the middle clas,mostly people who who care about nurturing and affirming outside job. Mircea Niculescu, WineRo sales manager, says there are several types of wine consumers. The low-income backgrounds, who have a lower level of information and are more oriented to the volume of wine consumed,spend 10 to 15 lei price for a bottle. Middle-income consumers are very interested in buying a product with a good price performance ratio and can not afford to buy more expensive wine. They buy wines between 25 and 50 lei glass. "In this category can also be found informed consumers who choose quality wine, but with easy taste," says Niculescu. In this category there are two types of consumers: those uninformed, but with relatively high incomes who wish to avoid criticism and informed consumers of wine with above average

income level who want to consume a quality wine. And qualify to pay over 50 for a bottle of wine is divided into two. The first are those who want to impress through the value of wine and other are those who have high incomes and are savvy. The latter simply want limited edition wines because they necessarily consume super premium quality. Niculescu states that there is an increase in the consumption of wine, but only one segment namely the premium.

To define the main market segments to which wine is addressed it is necessary to analyze the market on the follwing criteria: geographic, socio-demographic, economic, psychographic and behavioral. With the help of these a profile of the wine consumer will be made. Geographically speaking, we are interested in the regions with the highest sales during last years. Moldova represents the most important area for the 0.75 liter bottled wine followed by Bucharest, Muntenia, Oltenia and Ardeal in the last place. From the point of view of value and income Bucharest is the leader. Demographically speaking the market is formed not only by physical persons but also legal persons. In romania the target market is represented by consumers who live in the urban areas with ages between 30 and 45, mainly males. Related to consumers personal income and education the targeted persons are part of the middle to high class and high studies who are part of the business area. Psychographically speaking the persons which are supposed to drink wine are usually openminded, modern, outgoing, willing to gather new information and try new products. These persons drink other types of booze also and enjoy places like clubs, pubs, restaurants and coffee shops.

3.Market capacity
Wine market posted a total turnover of 350 million euros in 2009, while consumption is 26.6 liters per capita is expected to grow in 2009 to 30 liters per capita. Romania is one of the world's largest wine producers, producing (as of 2009) around 610,000 tons of wine.
Wine Production The evolution of wine production during the 2007-2011 period was the following:

3.1 The number of potential consumers ( potential market ) The potential consumers of wine market, represents the entire Romanian national population, who turned 18 years, plus other nationalities who, by their religion and tradition, they are allowed to drink alcohol. Most people, 18 million, according to 2002 census, are not prohibited the consumption of alcoholic beverages. 3.2 The number of effective consumers (effective market ) The effective consumers of this market are the people older than 18 years. In Romania, they are around 14 million.

3.3 Sales volume and sales value of the product ( by geographical regions/ administrativeterritorial divisions/ developments regions)
The structure of the wine sales by counties in 2010 , liters of wine:

Alba Arad Arges Bacau Bihor Bistrita- Nasaud Botosani Brasov Braila Buzau Caras Severin Calarasi Cluj Constanta Covasna Dambovita Dolj Galati Giurigu Gorj Hargita

10.161.200 12.528.600 17.875.200 18.806.200 15.960.000 8.299.200 12.023.200 15.696.660 9.948.400 13.220.200 8.857.800 8.645.000 18.699.800 19.045.600 5.931.800 14.417.200 19.551.000 16.494.660 7.982.660 10.374.000 8.671.600

Hunedoara Iasi Ilfov Maramures Mehedinti Mures Neamt Olt Prahova Satu Mare Salaj Sibiu Suceava Teleorman Timis Tulcea Vaslui Valcea Vrancea Bucuresti

13.568.660

12.901.000 21.705.600 7.982.660 8.139.600 15.430.660 14.632.660 12.770.660 22.051.400 9.762.200 6.596.800 11.198.600 18.300.800 11.597.600 18.008.200 6.836.200 12.103.000 10.985.800 10.294.200 53.226.600

3.4 Structure of the sales volume and value In the segment of 0.75-litre bottles, the Romanian consumers prefer the white wines (about 72%), followed by the red wines (22.4%) and the ros wines (5.6%). The sales by wine type reveal the Romanians preference for the semi-sweet wines (41.9%), followed by the semi-dry wines (24.2%) and the dry wines (19.5%). The sweet wines account for 11.2% in the Romanians preferences. While in Moldavia the consumption of bottled wine in 2-litre bottles is on the top position in consumers preferences, in Transylvania the consumers prefer the wine bottled into 0.75-litre bottles.

4.Market dynamics
The wine market has evolved upward in the period 2006-2008. In 2006 there was a growth up to 400 million euros, in 2007 it reaches 450 millions euros, and in 2008, 500 million euros. To study the wine market evolution we need to take into consideration the following indicator: the average variation rhythm of the sales value of wine during the period 2010-2011. To determine it use the following formula:
R n1 Y n 1 * 100 , where: Y 1

Y n- the sales volume in the year 2011= 700 mil; Y 1- the sales volume in 2010= 600;
n - the number of years taken into consideration =2 = ( 21

700 1) * 100 16 % 600

Taking into acoount the average variation rhythm of the sales value and the sales volume in 2007, 2008 and 2009, we can say that the wine market has risen slowly.

5.Market evolution
5.1 Evolution of the market The economic crisis forced the Romanians to reduce the consumption of food and drinks that they normally purchased. Sadly, the crisis obliged them to cut down on the consumption of alcohol as well. However, there is also some good news : in comparison with the previous 10 years, alcohol consumption had risen. The wine consumption at a national level from 2002 to 2011 increased, but the sprits consumption severely decreased. In 2002 the wine consumption was 0.78 liters / person. And this gradually raised to 1.36 liters per person, which is almost double. Though, in 2010 and 2011 its evolution started to enter a decreasing path.

Year Wine

2002 0.184

2003 0.185

The evolution of the wine consumption 2004 2005 2006 2007 2008 0.178 0.187 0.199 0.188 0.193

2009 0.199

2010 0.178

2011 0.178

Somehow predictable, the biggest wine consumers are the white-collars, as they hold a greater amount of financial resources. A white-collar consumes, on average, 1.383 liters of wine per month. The next ones are the persons over 65 years, who purchase, on average, 1.23 liters per month. The lowest quantity is consumed by the unemployed, which is explainable through the lack of financial resources. Consumption of alcoholic beverages in Romania in 2011 (%) 2010: 0.178 liters / consumers / year , 13.3 consumers 2011: 0.178 liters / consumers / year , 14.2 consumers Hence, Mv 2010 = 2.36 liters and Mv 2011 = 2.52 liters , so Mv = 2.44.

6.Market conjuncture
GDP dynamics

Inflation rate

Unemplyment rate

Exchange rate Ron/Euro

7.Demand and offer

Currently, five big wine producers dominate the domestic market, with a common share of almost 70 % in 2011, the remainder being disputed by all other Romanian and foreign wine producers present on the market. Supply is the amount of an economic good that a producer or all producers can and are willing to sell during a period of time.We know that in Romania there are many wine producers, offering an impressive assortment, which are added and wine importers. The main Romanian bidders based on the geographical area are: In Dobrogea we meet: Murfatlar Romania, Karom Drinks, Vinvicon Constanta, Fruvimed, Viticola Sarica, Niculitel Alcovin SRL, Ovidius Mercado In Transilvania: Jidvei i Prescon Mure In Banat: Cramele Recas, SCDVV Minis. In Oltenia : Carl Reh Winery, Vie Vin Vnju Mare, Vinarte, SC Banu Mrcine, Domeniul Coroanei Segarcea. In Moldova: Bucium Iai, Cotnari, Vinia, SCDVV Iai, Vincon Vrancea, Veritas Panciu, Vinuri Nicoreti, Prowine International. In Muntenia: Provinum, S.E.R.V.E., Vinterra International, Cramele Halewood, Carpathian Winery, Videlmar, DVFR, ICDVV Valea Clugreasc. The most important producers in 2011 are:
Name of producers Murfaltar Cotnari Jidvei Vincon Market share (%) 27,8 19 14,5 8 Turnover (mil. euro) 42 25 13 7

Romania ranks 11th among the world's largest wine producer, with production of 6.3 million hectoliters, and the tenth position in the consumer, with 5.4 million hl per year, according to a report by the International Organization of Vine and Wine (OIV).

Evolution of the total wine production 2007 - 2011

8.Prices and tariffs

8.1 Identifying the price segments The behavior of wine distribution companies is not subject to price stability established by regulated competitive market requirements. For some brands, the price is above the level of competition and market, as it is for the segment of the population with high income and high demands. Products on the wine market have a price disparity compared with the ones in the vine domain. In general, price differences refer to all respects: - the production regions - white and red wines - wines classified as high quality. In conclusion, it is difficult to make an overall assessment of the differences of prices in the wine, especially if we consider "quality wines", which can reach spectacular price levels, while some types of table wines can not find a market place despite relative low prices. Quality is a primary criterion for the Wine Marketing Policy. Classifying wines in table wines and high quality wines expressed the differences in the consumers behavior and often shows the diverging trends in the evolution of consumption. 8.2. Determination of price changes in the last five years and the reasons underlying these variations The price of a liter of table wine in 2005 was 2.5 lei, and of the quality wine 7.0 lei. Production in 2005 was very poor, about half of what in a normal year should be. This meant small stocks in cellars, and higher prices of Romanian wine. These prices can not be immediately transmitted to consumers. At this moment in Romania, about 70-80% of

Romanian wines in the supermarket are more expensive than 60% of wines in supermarkets in Germany. During 2006-2008 prices have increased slightly, due to good production recorded.But buyers paid on average 10-15% more for varieties of Romanian wines, towards producers selling price.Thus, buyers pay about 0.5 - 3 lei more for wine, if they are buying from the big commercial networks.

Case study : Price of Cotnari wine in supermarkets

According to representatives of Cotnari wine producer, the company supplying the commercial networks with types of wine Feteasc Alba (dry), Francusa de Cotnari (dry),Grasa de Cotnari and Tamaioasa Romaneasca (dry) at a price of 14.28 lei. In Kaufland store chains, the prices of assortment of wine are higher with 1.71 lei, reaching 15.99 lei, while the units Carrefour sells Feteasca Alba 15.85 lei, Francusa de Cotnari with 14.86 lei,Grasa de Cotnari with 14.70 lei and Tamaioasa Romaneasca with 16,05. In Cora hypermarkets, Feteasca Alba is sold at 15.99 lei. Cotnari-Vinul Voievodal (medium dry) is marketed by the producer at price of 14.84 lei and arrive at 16.89 lei in Kaufland network, it sells in Cora hypermarkets at 16.72 lei and receives in Carrefour stores, an addition of 0.58 lei. An added greater is recorded at assortment Chateau Cotnari. Kaufland offers 3 lei over the price of the producer, and Carrefour hypermarkets added 1.11 lei. The assortment goes from producer to 19.99 lei. Also according to the price list provided by Cotnari assortment Grasa de Cotnari 2005 (sweet) and Tamaioasa Romaneasca 2005 (sweet), marketed by the producer with 14 RON, will be sold in Kaufland at the price of 15.99 lei. In addition, the same shops, Francusa 2010 (dry) retails for 12.99 lei from 11.95 lei as is producer price, Feteasca Alba 2007 (semidry) is solded with 10.95 lei from 10.45 lei, and wine "Casa de piatra" 2007 (semidry) is sold with the addition of 1 leu.

9.Imports and Exports

9.1Wine Exports In 2011, Romanian wine exports reached a level of 102.5 thousand hl, in value of 15.8 million , in increase compared to 2010.
Romanian wine exports, 2007-2011 (000 hl) Romanian wine exports, 2000-2010 (mil Euro)

By main destinations, Romanian wine exports in 2011 presented as follows: Romanian wine exports by main countries of destination, 2011 (%)

The top ten countries of destination held in 2011 a share of 89.7% in quantitative terms and of 86.5% in value terms. An interesting feature, worthwhile mentioning, is that Romanias IntraEU wine trade held in 2008 a share of 74.4% in quantitative terms and of 65.4% in value terms, the difference being shared by over 33 third countries around the globe. At the same time, the top ten countries of destination held in 2008 a share of 88.3% in quantitative terms and of 85.1% in value terms. 9.2 Wine Imports In 2011, Romanias wine imports reached a level of 912.8 thousand hl, in value of 51.2 million , showing a sharpt increase compared to 2010. During the period 2007-2011 the wine imports evolution of Romania looked as follows:
Romanian wine imports, 2007-2011 (000 hl) Romanian wine imports, 2007-2011

By main countries of origin, Romanias wine imports in 2011 were the following: Romania: wine imports by main countries of origin, 2011 (%)

Imports in 2011 were mainly in bulk, with the exception of France, from which imports consisted of bottled wines. The top ten countries of origin held in 2011 a share of 97.7% in quantitative terms and of 96.3% in value terms.

Reference list
1. http://www.wineromania.com/files/docs/romania_EN.pdf 2. http://www.traderom.ro/prezentare%20sectoare%20economice/Vinuri%202010en.pdf 3. http://www.romanianwinegrowers.com/downloads/Wine%20Industry%20Outlook091 014.pdf 4. ftp://ftp.repec.org/opt/ReDIF/RePEc/iag/iag_pdf/AERD0902_277-292.pdf 5. http://www.ceeretail.com/83986/Romanian-wine-market-expecting-decline-thisyear.shtml 6. http://www.dce.gov.ro/info_business/apev/engleza/Vincon_v/vincon/presentation.htm 7. http://www.dce.gov.ro/info_business/apev/_engleza/Jidvei/index.htm 8. http://www.dce.gov.ro/info_business/apev/_engleza/Cotnari/index.htm 9. http://www.dce.gov.ro/info_business/apev/_engleza/Murfatlar/index.htm 10. http://en.wikipedia.org/wiki/Marketing_channel 11. http://www.scribd.com/doc/50191654/piata-vinurilor-mrk 12. http://www.ann.ugal.ro/tpa/Anale%202010/vol%201/Full%20paper%20GIordachescu. pdf 13. http://www.wine-pages.com/features/romanian-wine.htm 14. http://marketyourwine.com/services.php 15. Importurile de vin,la nivel record.Published by Alina Stanciu,at 20.02.2012,available at http://www.rtv.net/importurile-de-vin-la-nivel-record_16842.html 16. http://www.wine-searcher.com/topvalue.lml 17. http://www.winealley.com/dossier_49867_en.htm 18. http://www.wineromania.com 19. http://www.tradingeconomics.com/romania/. 20. Marketingul pe filiera vinului in Romania,Victor Manole,Mirela Stoian,Dan Boboc,Raluca Ion,Rozi Berevoianu,Adrian Turek ,Editura ASE-Bucuresti 2005