Direct sales by Hungarian wineries
Keywords: wine, viniculture, direct sales, retail trade
This paper looks at the scale of direct sales in Hungarian viticulture and viniculture, and the willingness of winemakers to engage in direct sales. The questionnaire-based research was conducted in 2010 in the winemaking region of Eger. The results indicated that there were significant differences between the wineries regarding the extent to which and the effectiveness at which various forms of direct sales were employed.
The most important benefit of the direct selling of wine is that it eliminates the dependence of the producer to the processing firms and to retail trade. Selling wine directly to consumers generates greater profit than selling through intermediaries. Direct contact with customers and the consumers of wine can boost sales and be a source of useful advice (e.g. regarding label design). At the same time, winemakers themselves are responsible for sales and for good consumer relationship, which makes sales more transparent and manageable.
Direct selling also requires time and energy on the part of the winemaker, which often requires hiring additional employees. This results in greater expenditure and requires more organisation efforts. Direct sales also requires additional infrastructure, which results in additional costs, partly to ensure compliance with various statutory requirements (e.g. hygiene).
Various avenues for development are open to the winemakers engaged in direct selling. Currently, few winemakers fully exploit the opportunities provided by the Internet in terms of advertising or online sales. Continuous communication with the consumers allows the development of consumer-friendly innovations (e.g. replacing corks with a bottle-cap). Cooperation between the winemakers could go a long way towards establishing a joint industry organisation to protect their interests and to facilitate the joint marketing and presentation of Eger wines.
The increasing input costs, which wineries are only partially able to collect from the selling prices, are a threat to winemakers. There is a lack of trust towards the cooperation of producers and towards industry bodies, which has negative consequences on the long term. The sector is missing a secure purchaser as the company Egervin, which went bankrupt. Another cause of uncertainty is the fact that several older winemakers have nobody to hand over the business to.