Restructuring in the wine making industry : the financial implications

Abstract

This dissertation investigates the restructuring exercises that have been carried out by wine making enterprises in Malta over the past years. In complying with EU requirements all enterprises within the industry have found it necessary to make changes to their enterprises and methods of operating. In order to reach conclusions about the extent of the restructuring process and where this is leading, interviews were conducted with the majority of wine making enterprises. These interviews established what the prime concerns of the vintners are, what action has been taken and what the financial implications of these actions will be. The situation regarding the scarcity of raw materials is analysed in depth. This issue has been facing the industry for the past ten years. As new regulations are enforced the situation will start having negative financial effects on the vintners. The threat to the industry from imported wine is also investigated. In May 2004 levies will be removed from imported wines and this is set to expose local vintners to harsh competition as imported wines become substantially cheaper. As competition intensifies the smaller vintners may have to re-evaluate their presence in an already crowded market. The larger vintners have taken measures to ensure that their organisations are flexible enough to adapt to new market conditions. This should ensure their survival and competitiveness.