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Can Mrs. May learn about negotiation by looking at the wine industry?

January 23, 2019 Tags: 0 comments
I just read that EU and Australia have almost reached a compromise on the Prosecco dispute, Australian producers will, still to be confirmed, be able to keep producing and selling Prosecco, amongst many other European protected food, by adding “Australian” on the label.

If you did not know, Australian wineries have been growing Prosecco grapes and producing a sparkling wine called Prosecco, from the name of the grapes, for a couple of decades and well before Prosecco acquired the DOC status, and therefore became a protected appellation, and the name of the Prosecco grapes were changed to Glera to avoid confusion for consumers and producers bottling sparkling wine using the grape’s name.

Currently Prosecco produced in Australia cannot be sold in the EU, including the UK, but in Australia is a big seller, and due to the size of the Prosecco market, Australian producers don’t want to drop the name, they don’t want their wine to become another sparkling wine, they want it to remain Prosecco, the majority of consumers don't even notice or would care where the Prosecco is from, and the Italians, on the other side, want to be the only Prosecco in town for this very reason. We are all aware of the Prosecco appeal.

Due to the size of the two markets, Australia and EU, and the positive financial implications of a trade deal, both sides have been trying to reach an agreement and know that they need to compromise. If Australia were to win, not only Australian Prosecco will still be produced and sold in Australia but potentially could be exported all over the world, with serious consequences for Italian producers. On the other side, if EU wins, Australian wineries will not be able to bottle Prosecco anymore and will not only lose their share of the market but will probably need to start thinking of replacing Prosecco vineyards with other, more profitable, grapes.

If the rumours are correct and the compromise is the inclusion of the word “Australian” on the label, it will be a compromise that, I think, will benefit Australian producers more and the first and immediate reaction would be to try and hide the word “Australian” as much as possible and assess the impact until a more permanent solution can be found but knowing the Australians marketing skills, I can see the “Australian Prosecco” to become a sort of a “cru”. The trade deal is not expected to be signed before 2021, so there are a couple of more years for an agreement to be reached and formalised, I can’t see a solution that will benefit both countries, but any decision will create opportunities, it is whether they will grab them.

Could Mrs. May learn something about negotiations by looking at this?

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