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REV: JULY 21, 2003

CHRISTOPHER A. BARTLETT

Global Wine Wars: New World Challenges Old (A)
It’s an art, not a science. We’re creating products that are crafted, just as an artist or a chef would create. — Jean-Claude Boisset, CEO of a French wine company We bring a total commitment to innovation . . . from vine to palate. — Mission Statement, Australia Wine Foundation Inearly 2002, these two views reflected an honest difference of wine-making practice that had grown into a fierce competitive battle between traditional wine makers and some new industry players for the $90 billion global wine market. Many companies from the Old World wine producers—France, Italy, Germany, and Spain, for example—found themselves constrained by embedded traditions and practices,restrictive industry regulations, and complex national and European Community legislation. This provided opportunities for New World wine companies— from Australia, the United States, Chile, and South Africa, for instance—to challenge the more established Old World producers by introducing innovations at every stage of the value chain. After decades of being dismissed and even ridiculed for theirattempts to compete with exports from traditional wine countries, in the 1980s and 1990s the New World companies began winning international respect, and with it global market share. At the November 2000 annual charity wine auction in Beaune, Louis Trébuchet, head of the Burgundy Growers Association, told his French colleagues that they needed to be on guard against increasing challenges fromAustralian, South 1 African, and South American wines. The warning was underscored by a market forecast that in 2002 Australia would overtake France as the leading wine exporter to the United Kingdom, the world’s highest-value import market and a bellwether for trends in other importing countries.

In the Beginning2
Grape growing and wine making have been human preoccupations for many thousands of years.Early archeological evidence of wine making has been found in Mesopotamia, and ancient Egyptians and Greeks offered wine as tributes to dead pharaohs and tempestuous gods. Under the Roman Empire, viticulture spread throughout the Mediterranean region, where almost every town had its local vineyards and wine maker. In the Christian era, wine became part of liturgical services, and monasteriesplanted vines and built wineries. While today wine is often considered a sophisticated drink, during most of European
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Professor Christopher A. Bartlett prepared this case with the research assistance of Janet Cornebise and Andrew N. McLean. This case was developed from published sources.HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163,or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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Global Wine Wars: New World Challenges Old (A)

history it was a peasant’s beverage toaccompany everyday meals. Eventually, the Benedictine monks raised viticulture to a new level, making wine not only for religious use but also to show hospitality to travelers requiring lodging. By the Middle Ages, the European nobility began planting vineyards as a mark of prestige, competing with one another in the quality of wine served at their tables. A niche market for premium wine was born....
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