French and Italian winemakers join forces
Staff Writer - May 6, 2004
Two European leading wine producers,  Italian "Caviro", and French "Groupe Val d'Orbieu", announced Wednesday, May 5, 2004 a strategic partnership to face the competition, especially United States and Australian producers, in the battle over emerging markets.
With sales of 221 million Euros ( about $267 million), Caviro is Italy's top producer and represents about 20,000 growers.  With sales of 350 million Euros (about $423 million), Groupe Val d'Orbieu is France's second-largest winemaker and represents 15 cooperative wineries, 135 privately owned cellars and 2,000 independent producers.
In addition to lobbying to defend and promote the partner's interests, the venture was created to cooperate at various production and marketing levels, including bottling materials, R&D, transportation, storage and marketing.
At a news conference at the headquarters of the European farmers' organization COPA-COGEGA, Val d'Orbieu president Joel Castany said that: "We have to sweep away the dust, to modernize, to adapt and become more competitive."
Both Castany and Secondo Ricci, Caviro's president, emphasized that Europeans risk getting squeezed out by multinational corporations such as Fairport, N.Y.-based Constellation Brands Inc., which last year took over Australia's BRL Hardy Ltd. to achieve the top position for wine revenues with over $1.2 billion.
As a first step, the joint venture plans to focus on emerging wine markets such as Russia, Korea, Taiwan, Japan and the eastern European nations - eight of which joined the European Union just five days before the news conference in question. The idea is to streamline market relationship, making it easier for western European nations to export there.
In the longer run, the two companies face potentially huge markets in India and China. The hope is that the rapidly expanding middle class in those countries will develop a taste for wine that the European producers are eager to satisfy.
Caviro Managing Director, Sergio Dagnino, said the companies plan to distribute both what he defines "daily wines", sold in cartons and boxes under 3 Euros (about $3.60) a liter, and more prestigious, bottled quality regional wines.
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