FACULTATEA DE ADMINISTRAREA AFACERILOR CU PREDARE IN LIMBA ENGLEZA

THE STUDY OF WINE MARKET IN ROMANIA IN 2007

ACADEMIA DE STUDII ECONOMICE

BUCURESTI 2009
Table of contents

Introduction a. Short History b. General Presentation

1. Area of the market 2. Structure of the market 3. Capacity of the market 4. Dynamics of the market 5. Evolution of Wine Market 6. Conjuncture of Wine Market 7. Demand and supply 8. Prices and tariffs 9. Import and export Bibliography

2

Dionis. the Roman colony from the Black Sea. the historic tradition of the cultivating grape vine being known since ancient times. more precisely from the area populated by the Geto-Dacs.Introduction A. 3 . It is not a coincidence that the Greek God of wine and joy. So. written legacy about the production of wine (there are references made about the Murfatlar wine) were left even by the famous latin poet Ovidiu which lived exiled at Tomis. was originated from Tracia. Short History Romania is by tradition a viticulture country.

being a traditional wine exporter. Romania takes the 5th position at the vineyard area. Romania positions itself among the first 10 viticulture countries in the world and in Europe. Domeniul Coroanei-Segarcea or Cramele Carl Reh. producing the wine and cultivating the grape vine were primary occupations for the occupants of what is now Romania. recognized and appreciated all over the external market. According to The National Patronship of Wine and Vineyards. General Presentation of the Wine Market There are 37 vineyards in Romania. Through the size of the wine-growing areas and through its productions.It is a known fact that in the bronze era. the local market is divided by Murfatlar with 30%. Specialists claim that Romania can produce up to 402 types of wine. Harghita and Succeava because of the improper pedo-climatic conditions necessary. with 123 wine centers. There are the smaller vineyards also: Cramele Recas. the 6th position in the grape production and also the 6th in wine production. 42 are superior quality wines and 349 with controlled origin. Cotnari 18. B.7%. Area of the Market In Romania the culture of growing grape vine can be easily practiced all over the country’s territory except a small number of locations like: Brasov. 11 of which are for the current consume. Covasna. Our country has become since 1928 member of the International Office of Wine and Vineyard (OIVV). at which we can sum up 40 independent ones based outside the vineyards. 1. including higher grades. The level of 4 . Jidvei which has recently taken 300 hectare of vineyard from Vinfrucer Cernavoda (17%) and Vincon with 10%.

different from the urban areas where the sales are dominated by the bottled up wines ( from medium to premium classes) The country’s territory has main wine regions that coincide with the historical provinces and represent the particularities regarding the ecological conditions. level of obtained production and the qualitative attributes of the obtained products. Crisana and Maramures Hills (Crisana-Maramures) 7. Moldavian Hills (Moldavia) 3. but from the commercialization’s point of view the areas intensely populated both urban and rural are higher. the used technologies. Danube Meadow 5 . We will next present the principal areas in Romania : 1.the wine consumption can’t be differentiated geographically. Muntenia Hills (Muntenia) 4. Oltenia Hills (Oltenia) 5. the types of cultivated grapes. Dobrogea Plateau (Dobrogea) 8. Transylvanian Plateau (Transylvania) 2. In the countryside the most appreciated types of wine are the table wines. Banat Hills (Banat) 6.

The Most Important Wine Areas in Romania The value of the sales in 2007 was of 450 million Euro.38 million hectolitres and the quantity of consumed wine on the same year was of 5. 6 . the wine volume produced in 2007 was of 5.1 million hectolitres.

5 or even 2 million hectolitres represent commercialized wines (volume of sales).We can say that the average of the wine production in Romania was up to 6 million hectolitres from which only 1. 7 .

8 . according to which the consumption of table wine continues a traditional trend represented by the rural environment while the quality wine market shows a break-off from the traditional trends. which can be found in restaurants and specialized shops. Market Structure The market segment represents the target. the wine market is addressed to people with the age above 18. psychological or behavioral. Regarding the etnies and religions there are persons who are forbidden to consume wine in certain periods of the year because for the Christians this beverage is associated with Christ’s blood. the group of people that will buy the product. dry wines and the sparkling wines. education and income the great majority of wine consumers pick a wine of a medium quality and price. demographic. Taking in consideration the age. the sweet and medium sweet wines. while the masculine side prefer the strong. Another criteria is the life style. and people that prefer table wine sold in every shops in the country. Knowing that a Romanian drinks an average of 30 litres on wine per year from which only 3-4 litres are bottled-up wines we can say that regarding the occupation. the leisure time wine . Thus. ‘peasant’s and worker’s wine’. We will define the following market segments to which the product is addressed to through the next characteristics: geographic. meanwhile the table wine continues to represent the day to day beverage of the social classes that have a smaller income. Regarding the sex. we will make to robot portraits because on the wine market we can observe single users and families. So. the quality wine is becoming more and more the elite’s wine.2. Taking in consideration the location in which they sell wines their can be distinguished 2 types of people: the ones that appreciate the quality wine (older wines). it can be observed that the feminine side prefers the light wines (with a percent of alcohol under 15). being banded for underage consumers.

Above 90% out of the sold wine quantity in Romania is addressed to home consume. Pinot Noir for red wines Chardonnay.Generally. In conclusion. managers or intellectuals with incomes higher than the average which consume occasionally and prefer a high quality wine. workers or clerks with a medium income of 1000 lei who appreciate the ‘accessible prices’. table wines. Types of grapes According to the specialists. The majority are single persons with no more than 3 family members and ages up to 35 years old. out of which 11 types are for the current consume. As a result. • ‘Sophisticated’ people are the ones that would pay more than 100 lei for such a product. Sauvignon Blanc. Among the noble vineyards of western origin and which were acclimated successfully in Romania there are: Merlot. the wine’s brand (brand loyalty) and the type of wine. the potential consumers appreciate the quality through the name. 35% are red and only 5% are rose. the criteria regarding the territory and the origin almost miss in the decisional buying process especially in the case of young people. without taking in consideration its region or the aspects the control of the name’s origin. Approximately 60% from the produced wines are white. Cases where prices come before quality are most frequent here. 42 are superior wines and 349 types of wine with controlled origin. So being. most of them with 3 members with medium education. Romania can offer up to 402 types of wine. Cabernet Sauvignon. said the manager of Provinum. family people. Romanians prefer generally white medium-dry and medium-sweet wines according to the studies made. the wine market can be separated into two: • ‘Conservators’. male persons that would pay under 50 lei for a bottle of wine. Pinot Gris and Muscat Ottonel for the white wines 9 .

extremely precious are: . Wines of high quality with names of controlled origin (from grapes with minimum 180 gr/litre) Wines from grapes collected at full maturity (min187 gr/litre) 10 .Babeasca si Feteasca Neagra in red wines . The structure of production on wine types 5% 35% 60% White wines Red wines Rose wine According to the wine law nr. Francusa. Busuioaca si Tamaioasain white wines. . Country Wine or Landwein. known in the European plan as Vin de Pays.The Romanian types cultivated in the post-filoxeric period. the categories of wines recognized in Romania are: Wines for current consume: Table wine Superior table wine Quality wines: Wines geographically protected. Grasa. 244/2002.Feteasca Regala. Galbena.

we determined the number of actual consumers: 17. both producers and also distributors should have in mind the consolidation of ’horeca’ segment in order to have a promotional impact on the hole wine market.2435 million.2 million people in 2007. To determine the size of the potential market it is taken into consideration the number of potential buyers for this market.38 million hectolitres. The actual market is formed by the actual consumers of the market.a canal through which the markets unload more than three quarters of the traded wine at the entire sector’s level. Market Capacity The potential market is the total number of persons who could buy the product. Of great importance in the analysis of this market represents the customer’s wish in consuming something different from what they find in the traditional shops. Considering this high average(3/4) .Wines from late collected grapes (min 220 gr of sugar per litre) Wines from shriveled grapes with noble rot (min 240 gr of sugar) The Characterization of the ‘horeca’ Segment of the Market The ’horeca’ market segment materializes in the trading of wines in hotels. representing the number of persons older than 18 years and who are not forbidden by their traditions and religion to consume alcoholic drinks. This number is estimated at 18 million people. 3. bars. Knowing the value of the average consumption per consumer: 31. with the help of the next formula: 11 . A consequence was that the sales went up especially on the premium part.2 litres and the value of the total consumption: 5. in our case a total number of approximately 17. clubs .

Market Dynamics The decrease of the cultivated areas during the period between 2005 and 2006.38 million hectolitres and a total turnover of 450 million euro in the same year. 4.Average consumption= total consumers/number of actual consumers Another economic indicator used for determining the actual size of the market is the sales volume. Years Turnover (million euro) 2005 350 2006 400 2007 450 For analyzing the market dynamic between 2005 and 2007. in 2006 the total value of the market was 400 million euro and in 2007 it reached a value of 450 million euro. So. The wine market has registered in 2007 a sales volume of 5. we use the average variation rhythm of the sales of the product (R) determined by the following formula: R=  n −1 Yn   1  Y  − 1 ∗100   12 . in 2005 this sector had a total turnover of 350 million euro. did not reflect at the level of the turnover generated by the sector which produces wine.

the value of the sales has increased by 13.the sales volume in year 2007 Y1.the sales volume in year 2005 n – the number of years taken into consideration  Y2007  − 1 ∗ 100 =13. 2005 and 2007. Also.5 13 . the wine market had an ascending evolution.5 2005 2005.38% from a year to another.5 2006 Years 2006. in the analyzed period. from analyzing the data it can be observed that during this period.5 2007 2007. The evolution of the market Turnover (millions) The evolution of the market 500 450 400 350 300 250 200 150 100 50 0 2004.38%   Y2005  R=   In average.Where Yn.

be them from the relative nonconsumers.067 million euro for improving and updating the plantation of grape vine. one of the reason being the increase of the areas cultivated with grape vine. the extensive way is materialized especially by entering new geographic areas or new external markets.2 The company’s development of market activity can be realized. If the production in 2005 did not ensure the internal demand. In the spring of 2006. in the next two years the investments in the grape vine growing sector. The extensive way implies attracting new buyers for the company’s products. while in 2007 the consumption reached only 31. Inside the internal market. For emphasizing the type of evolution of the wine market taking into consideration the number of consumers and the intensity of consumption. Market evolution The years 2006 and 2007 are considered one of the most profitable for viticulture.500 31. we put the data in the following table: 2006 Actual consumers Average consumption(litres) 17.000 30 2007 17. whereas in 2007 the area cultivated was almost three times bigger: 2100 hectare.5. 747 hectare were cultivated. 14 . or from a competing company’s clients.2 litres. on three ways: extensively. basically.000. have increased considerably due to a subsidy of 8. intensively and crossed. The internal consumption per consumer increased to an average of 30 litres in 2006.243.

The intensive way consists in raising the average purchases made by a consumption unit. using company. Such a situation can occur due to the raise of consumed quantities by these or by taking out of usage some goods which were made to be used on a longer period of time. The evolution of the market during 2006 and 2007 15 . individual. The crossed way implies combining the other two ways with the result of a change in the same direction as well as quantitative as qualitative. family.

as it results from the graphic above. the wine market has evolved in a crossed way.2 18 19 20 21 Number of actual Consumers(millions) During 2006 and 2007.500 -17.000)*(31.2 30 25 20 15 Crossed growth 14 15 16 17 17.2– 30) = 292.200 litres from which: 16 . Crossed growth = (17.Average consumption 31.000.243.

4 % over the previous year. increase sustained by the manufacturing industry. The rate of inflation. in the intermediate goods industry by 6. in the goods for current use industry by 7.2 % in 2006.9%.708 billions lei.500 ( representing the increase of the actual consumers of wine) 6. followed by the electric and thermal energy industry.Intensive growth = 1.2 litres (repress enting the increase of consumption per consumer) Extensive growth = 243. This evolution is a favorable situation for the wine market. We can also conclude that this is favorable for the market conjuncture. Market conjuncture At the level of year 2007.8%. The unemployment rate has decreased to 4. and in the durable goods industry by 2. the gas and water industry.2%.7% according to INS.78 billions lei.4% and 0. which have decreased by 0. The energetic industry has recorded the biggest decrease of about 1%. The industrial production has increased in 2007 by 5. having increased with 6. the gross domestic product (GDP) has reached 404.0%. This decrease of the unemployment rate emphasizes the fact that in 2007 the active labor force has increased and furthermore the number of employees in the wine making sector has also increased. which had increased by 6.5%.56% and in 2007 it has also decreased to 4.0 % over 2006. when GDP had reached 342. in 2006 had a downward trend in comparison with the previous year reaching 6. On a larger scale there was registered an increase in the stock industry by 9. 17 .84 %.1 % in comparison to 5.

This decrease will affect the number of potential wine consumers in an unfavorable way. Average score = (+ 1+0+1+1+1+1-1) / 7 = 0. In this situation we can say that the purchasing power of the Romanian currency has increased resulting in a favorable situation for Romania.328 million inhabitants. Demand and offer 18 .The exchange rate leu/euro was in 2007 3.1 million euro. The foreign investments at the end of year 2006 were about 30. 7. more than in the next year when its value was 21. Dynamics/indicators -2 GDP Industrial production Rate of inflation Rate of unemplyment Exchange rate Foreign investments Population -1 0 ∗ +1 ∗ ∗ ∗ ∗ +2 ∗ ∗ To evaluate the market conjuncture to every qualification will be associated a grade between +2 and -2. The average grade according to market conjuncture will be calculated as the simple average of the grades obtained for each indicator analyzed.891.57 The result obtained reflects a favorable conjuncture as the average score is near 1.524 lei. and in 2007 they have increased considerably reaching 42.33 lei having increased with regard to 2006 when it was 3.584 million inhabitants. Romania’s population in 2006 had a value of 21.770 million euro creating in this way a favorable market conjuncture.

The rules that determine the demand for the two wine categories (the table wine and quality wine) are different. Spain. reaching a margin of 43% of the total sales. Romania is still on the 6th spot in Europe. While an increase in the revenue determines a decrease in the consumption of table wine and an increase in the consumption of high-quality wine. Italy. Potential consumers on wine market in 2007 are around 18 million. having quality degrees. they have a margin of 72% from the total sales. according to a study realized by the company MEMRB Retail Tracking Services. 42 categories are superior wines and 349 recognized by the Fiscal Authorities. The wine in 0. but the substitution of the high-quality wine with the table wine. The Romanian wine production is for 2007 of 1. 52% are white wines and 3% are rosé wines. The consumers’ revenues represent the main factor influencing the demand of wine. Considering the grapes production.The specialists estimate that Romania can produce around 402 different sorts of wine. Research shows that on Romanian market are most wanted medium sweet wines. France.2 l in 2007. after Italy. Spain. 11 of those are for day-to-day consumption.75 l bottles is in the sales top. the medium price is 2 Euros. 45% from these are red wines. The most consumed are the white wines. after France. Romania is one of the 15 most important wine producers in the world and the 6th producer in Europe. These are closely followed by the 2 l bottles. medium consumption per inhabitant (which expresses the intensity of the consumption) increased from 30 l in 2006 to 31. a decrease in revenues does not determine a reduction in the consumption of wine. having a market share of 43% as volume and 72% considering the sales value. Main producers Dobrogea Banat Murfatlar Cramele Transilvania Oltenia Jidvei Carl Moldova Reh Bucium Iasi Muntenia Provinum 19 . Germany and Portugal.05 million tones which result in approximately 600 million litres of wine. Germany and Greece.

8 The most important producers on the market according to the dates given by the Association of Wine Producers and Exporters from Romania are Murfatlar. we distinguish the most important producers for 2005: Name of the company Murfaltar Cotnari Jidvei Vinexport Focsani Vincon Cramele Recas Market share (%) 30 18. Cotnari.7% and Vincon – 10%. with a market share of 30%. 20 .18. Jidvei.Romania Karom Drinks Vinvico Constanta Fruvimed Viticola Sarica Niculitel Ovidius Mercado Alcovin SRL Recas SCDVV Minis Prescon Winery Vie Vin Vanju Cotnari Cramele Halewood Tohani Carpathian Winery ICDVV Valea Calugareasca SCDVV StefanestiArges Vinterra International DVFR de Rovit Mures Mare Casa Vinului Mures Vinarte Vinia SD Banu Vincon Maracine Vrancea Veritas Panciu Vinuri Nicoresti SCDVV Odobesti Bachus Casa Vinuri Husi From the producers above. euro) 36 20 20 8 34 3.17%.9 10 4 Turnover (mil.7 17 11.

3%). the oldest is from 1958. Nicolae Mermeze (3. dry or sweet.The market share for the main wine producers (2005) others.7%). Murfatlar Company is controlled by Euroavipo SA. There are 500. Ion Serban Dorobanteanu (17. Most of them are foreign 21 .70% Murfatlar Cotnari Jidvei Vincon others Murfatlar-leader on the wine market In conclusion one of three bottles bought in Romania is made by Murfatlar. in Bacau.35% Vincon. 25.00 wine bottles in Murfatlar wine basement. the Murfatlar wines cover the widest range of products.000 tourists. According to the company’s dates. Murfatlar is the owner of 160 medals won at the international wine competitions. which owns 61% of the shares. Catalin Bucura (15. 30% Cotnari. 10% Jidvei. Murfatlar registered in 2005 a turnover of 30 million Euros. Euroavipo SA has the following shareholders: George Ivanescu (30.25%).6%). These medals represent an improvement in the Romanian wine image and an increase in the Romanian reputation as a great wine producer.9%). The best year for Murfatlar is considered to be 1986. White or red. the wine cellar being visited annually by approximately 7. 18. Corneliu Emanuel Dorobanteanu (28.9%) si Gheorghe Zlotea (3. The company has contracts with several tourism agencies. Murfatlar produces wine for almost 2000 years on the largest vine estate from Romania belonging to only one producer. 17% Murfatlar. being the most appreciated Romanian wine abroad.

22 . who don’t even need more presentation. they can have a traditional Romanian meal and assist to folkloric spectacles. the red and white wine and other wine categories. but only customer loyalty. the price of wine differs according to the presentation. economic financial elements (taxes. Generally speaking. Murfatlar owns around 3000 hectares of grape vine for whose maintenance work around 1000 persons and 300 additional floaters. direct and indirect taxes. because Romanian people are still judging the wine considering the price. which different countries apply to this product. A special particularity of wine marketing is represented by differences between prices. are only some of the most known taxation elements. license tax. Prices and tariffs Normally. The price of wine is also influenced by the destination of products. The hypermarket’s offer is mainly a high quality one. the size of the distribution channel. income tax). 8. how specialists call them. Despite all these. the provenience year. so they do not benefit from the VAT discount. Both wine and alcohol are not included in the high necessity goods. And it couldn’t be different when next to the “great players”. harvest. there are several small and medium producers that have proved a long time ago that what’s on the packing paper is also in the bottle.citizens and they can visit the Murfatlar property in order to find out about the wine production process. concentration. the differences between prices are important concerning all aspects: the production regions. Another aspect specific for the marketing of wine is the taxation level that interferes in this product’s selling. the Romanians’ education concerning the wine consumption still has to be improved. their size being influenced by: the commercialization through intermediaries or direct commercialization. quality. The VAT. they can taste wines.

99 12. Imports and exports 23 . while some table wines sometimes can’t even find a market segment to start their business in spite of the prices relatively low.5 and 3.64 15. is around 2 and 3 Euros. For 2 bottled litres the price varies between 6 and 9 RON. in bulk wine or bottled wine (recognized of being of high quality from the initials ‘VS’ written on the pack).93 13. being considered of high-quality. the prices are very high reaching levels unattainable by usual consumers. For the collection wines. on a supermarket shelf. depending on the customers’ preferences. 9.64 17.61 12. depending on the producer. sold directly by the producer under a proper brand. In conclusion is very hard to make a general appreciation of the differences between prices especially if we take in consideration that some “high quality wines” can reach spectacular prices.Furthermore we offer a short presentation of the prices of some wines registered in 2007: Product Name Lacrima lui Ovidiu Domeniile Tohani Jidvei Beciul Domnesc Sangria Corido Rai de Murfatlar Busuioaca de Bohotin Murtfatlar Busuioaca de Pietroasa Price (RON/0. In 2007 there have been sold on the internal market around 400.5 RON.44 1 2 3 4 5 6 7 8 9 Red or white.75 l) 23. are sold at the same price.75 litres at a medium price of 1-1. considering that the average price for a bottle of wine having fiscal approval.75 11.000 bottles of 0.91 9.21 21. A litre costs around 2.5 Euros. which claim storage expenses and high money resources.

the quantity of exported wine in Romania was almost three times bigger than the one exported. The average import price was of 0. in Romania were imported over 10 million litres only from Spain. leave the possibility for long term increase. Italy 2. and the wine import was around 388.04 Euros/l. The main export markets for the Romanian wines are Great Britain and Germany. respectively Ireland and northern countries (Sweden. and the reduced wine consumption in these countries (Great Britain and Germany) considering the European average.62 million litres of wine. Russia. the existence of an against competition behavior on the market and the fact that the import wines have price-quality ratio superior to Romanian wines. the wine export was of 149. Finland.Romanian wines have always enjoyed high appreciation on the international market. According to PNVV in 2007. when the total sum of Romanian exports rose to 8. Suisse and others. are the increase in imports simultaneously with the decrease in exports. respectively the two most important wine exporters from the entire community. USA. The main 5 import markets for the product: 1. Japan. A statistic made by The Association of Wine Producers and Exporters shows that in the first semester of 2007. obtaining many medals for winning international competitions. Spain 24 . we notice that Romania is not present on the markets that have the highest consumption rate.37 hl. Denmark. According to this document. Despite all these. etc). So we can conclude that Romania was and will be an exporting country on the international wine market.65 Euros/l and the export price was of 1. being forced to adapt the European and international standards. This geographic orientation is favorable as long as Romanian wines already have a trademark on these markets. England. Among the main problems faced by Romanian producers. The main countries that realize the wine export are: Germany.85 hl.

Russia 3. SUA 5.the volume of imports in the first analyzed period n – the number of years included in the analysis  Y2007   − 1 ∗ 100 =190% R=  Y   2005  Import (hl) 46. Belarus Dynamics of imports and exports during 2005-2007 Year 2005 2006 2007 \ Dynamics of imports  Yn   n −1 − 1 ∗100 R=  Y  1   Where Yn – the volume of imports during the last analyzed period Y1 . Moldova 5. Germany The main 5 export countries for the product: 1. Estonia 4.56 181.37 Dynamics of exports 25 . France 4.63 149.85 Export (hl) 269. Germany 2.23 713.3.32 388.

html 3.http://www.html 2.ro/articol/piata-vinului-jumatate-de-miliard-de-euro-dau-pe-gatromanii-intr-un-an-110440.R=  n −1 Yn   1  Y  − 1 ∗100   Where Yn – the volume of exports during the last analyzed period Y1 .http://www.html 26 .http://www.ro/articol/Companii/32361/Topul-primilor-cinci-mariproducatori-de-vin-inversat-in-clasamentul-profiturilor. the volume of imports increased by approximately 190% and the volume of exports decreased by approximately 26%.http://business.wall-street.26%   Y2005  R=   In the analyzed period.corporatenews. Bibliography: 1.ro/content/view/11769/3/ 4.the volume of exports in the first analyzed period n – the number of years included in the analysis  Y2007  − 1 ∗ 100 = .ro/articol/FMCG/2629/Cotnari-estimeza-cresteri-de-vanzaride-20.capital.rol.

insse.wineromania.com 14. www. www.htmln 27 .html 6.http://www.standard.curierulnational.ro/zf-24/ins-productia-industriala-in-crestere-cu-5-6-3054784/ 13.http://www. http://www.html 8.wall-street.ro (anuarul statistic 2007) 11.bnr.http://www.ro/articol_89919/fara_brand_de_tara__tot_volume_mici_la_vinuri .5.vinul. www.ro 10.zf.zf. http://www.ro/analize_romania_import_export_vinuri.ro 9.sfin. http://www.ro 12.ro/articol/Companii/28459/Piata-vinului-este-estimata-la-450milioane-euro-in-2007. www.ro/Actualitate%20Companii/2009-0312/Murfatlar+vrea+sa+%22imbutelieze%22+o+cifra+de+afaceri+de+200+milioane+lei 7.