dossier

Canada: Love and Monopoly, Part One

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By 2020, Canada will be among the world’s top five wine consumers by value. The second fastest growing market, with a rate of around ten percentage points in 2018.
A market, therefore, on which Italy should make a joint and far-sighted effort, without fearing too much the albeit hindering state monopoly.
With a population of around 33 million people and extremely limited wine production, concentrated on whites, Canada is thirsty for red wines and it is no coincidence that the three best-known Italian regions are Tuscany, Piedmont and Veneto.

 


Italy on the podium
There are three major players in the Canadian market: if Italy is in first place in terms of volumes, it reaches third place in terms of value, after the US and France.
In 2016 alone, these three nations together accounted for more than $1 billion of Canada's $1.6 billion in imports.
“The USA – as told”Wine Numbers” – they have penetrated heavily into the Canadian market in recent years with growth close to double digits and to conquering the leadership, but in 2016 they had to deal with the strengthening of the currency, which clipped the wings of 2016 exports, which fell by 4%.
France and Italy did quite well, with an increase of 1% in euros and 4-5% in local currency. We are practically at the same level as the Americans”.

 

"While Italian wines are extremely popular in Canada, it is in Ontario where they enjoy the greatest popularity and have built the largest market share for a value of 340 million dollars in 2016, 70% more than France."
testifies Michael Godel, among the key figures in wine communication with 25 years of experience in the restaurant sector and important collaborations with overseas consortia in terms of training for those working in the Canadian market.
A constant growth (in 2015 it was around 324.6 million dollars for 23 million liters) that does not seem to want to slow down.

In 2017, the situation is in fact similar to 2016, with Italy strengthening its position thanks to bubbles – a preference that should be further pushed, especially in view of the presumed drop in English consumption following Brexit.


competitor

In the medium-high price range, Italy competes with the celebrity of French wines, the popularity of Californian wines, but also with Canadians' love for their quality wines.
"Canadians strongly support their industry" points out Gurvinder Bhatia, responsible for the wine column on Quench and on Global TV, among the major Canadian media; “However, Italy must also be wary of Chile, Argentina, Australia and New Zealand.” warns Godel.

At the bottom of the value scale, competition becomes fierce and runs on the edge of the bottom, with Italy, due to production costs, starting out at a disadvantage.

"There are two types of opponents here.” – he points out Christopher Wilton, a careful observer of retail sales for decades as well as a certified communicator. “At the import level, Italy is struggling against highly mechanized regions such as California or regions such as Southern France.” – it is worth remembering that in 2016, France was the largest importer of bulk wine from France, according to FranceAgriMer, a French agency dealing with agriculture.
The economic imbalances and tensions generated in France by the importation of wines from Spain which are then blended with French wines and resold at a lower price were recently discussed in an article in the New York Times (read the article).

On Canadian soil, Italy is instead fighting against domestic bulkers whose consignments arrive from abroad, are then assembled in Canada and enjoy advantages in terms of protectionist policies.

 

However, as he points out Gurvindher Bhatia, "the battle to the bottom is a losing battle from the start, as the consumer does not remain loyal to any brand but only to the lowest price"....

continued in the next article:
"Canada: Love and Monopoly – 2/2"

 

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