Read the following case situations and answer the questions given at the end :

40
(a) Differentiation in the Wine industry : an Australian success story but the
French fight bac!
"y #00$ the traditional do%inance of French wines in the &' had ended( with
sales of Australian wine outstri))ing the% for the first ti%e! Australian wines
accounted for $*!+ )er cent of &' wine sales in ter%s of value (u) #+ )er cent
over $***)( with French wines showing a steady decline! And for wines over
,+!00 (!- ./!+)( Australian wine had already overtaen French wines! 0he success
of Australian wines with retailers was )ut down to several factors! 0he quality
was consistent( co%)ared with French wines that could differ by year and location!
Also( whilst the French had always highlighted the i%)ortance of the local area
of origin of the wine within France( Australia had( in effect( 1branded1 the country
as a wine region and then concentrated on the variet y of gra)e2a 3hira4 or a
5hardonnay( for e6a%)le! 0his avoided the confusing details of the location of
vineyards and the na%es of chateau6 that %any custo%ers found difficult about
French wines! 0here was so %uch concern in France that in #00$( the French
govern%ent a))ointed a si62%an co%%ittee to study the )roble%! 0he co%%ittee1s
)ro)osals 2 that France should fight a war on two fronts( by i%)roving the quality
of its a))ellation wine and by creating an entirely new range of quality( generic
wines 2 shoced the )urists! 0he intention was to strengthen( and )arallel( the
syste% of A))ellation d17rigine 5ontr7lee( not to weaen or abandon it! 0he
)ro)osals a%ounted( nevertheless( to a radical change( not 8ust in the labelling of
French wine( but in the official French %ythology of wine!
0he syste% of A))ellation d17rigine 5onti!7lee (A75) is the legal e6)ression
of 1terroir1! 0he individual wine2grower is a custodian of the terroir and its
traditions! "ut the sa%e a))ellation can )roduce both wonderful and terrible
results2hence the un)redictability of French wine( which is char%ing to the
connoisseur( but infuriating to the dinner2)arty host( who e6)ects to get what he
or she )aid for! 0he 9ew World a))roach to the )roduction of wine of all qualities(
however( originates fro% the consu%er( not the soil! 0he %aers of %iddle2range
Australian wines base their )roduct on a )o)ular gra)e variety( such as
5hardonnay( rather than a single vineyard! 0he co%)any decides the style( quality
and taste of the wine that it wants to achieve( based on consu%er de%and( and
buys the gra)es it needs 2 fro% wherever it can find the% 2 to create a reliable(
standardised )roduct! :t is 8ust this a))roach 2 creating so2called 1vins de ce)age1
(wines based on a gra)e variety) that the French co%%ittee were )ro)osing! A
half2do4en new( readily identifiable French labels would be created( to rival the
;acob1s 5rees and the Rose%ounts of Australia!
<uestions for discussion!
What were the reasons for the success of Australian wines = Were these
sustainable =
What else would you advise French wine )roducers to do to counter the
Australian success =