Current and Future Trends in the International Wine and Spirit Markets – with an Outlook to 2010 ( Updated in December 2006 )

Methodology For the 5 th time, and since 2002, the International Wine and Spirit Record (IWSR) has been commissioned by Vinexpo to produce a detailed report on global consumption, production and international trade for wines and spirits, with forecasts to Since 1971, the IWSR database has been providing the most detailed, accurate and largest running source of data on the global beverage alcohol market. The current study covers 28 wine producing countries and 114 markets for wine and spirits consumption.

Conversion Formula 1 Hectoliter = 100 Litres = US Gallons 1 Million Hectoliter = 26,417,210 US Gallons

Wine Production Source: Vinexpo / The IWSR 2007 Volume - Millions of Hectoliters Wine +5.74% Wine Distilled for Brandy %+24.48% %+2.03% %+3.12% 1

RankCountry / /2010 1France % % 2Italy % % 3Spain % % 4USA % % 5Australia % % 6Argentina % % 7Germany % % 8Chile % % 9South Africa % % 10Portugal % % Top 10 Total % % Global Total (excludes wine for brandy distillation) % % Top 10 Wine Producing Countries Volume - Millions of Hectoliters Including Wines Distilled for Brandy 49% Source: Vinexpo / The IWSR

Wine Consumption Source: Vinexpo / The IWSR 2007 Volume –Millions of Hectoliters Still Wine * Sparkling Wine +9.15% % % %+4.40% %+4.80% 3 * Below 15% Alcohol

Top Ten Still Wine* Consuming Countries Volume - Millions of Hectoliters 43.03% * Below 15% Alcohol Source: Vinexpo / The IWSR % % Total Top % % Total World 35.91% % China % % Russian Federation9 3.39% % Romania % % Spain % % Argentina6 8.29% % UK5 7.31% % Germany % % USA3 1.09% % Italy % % France1 2005/ / CountryRank

Country / /2010 1Germany % % 2France % % 4 Russian Federation % % 3USA % % 5Italy % % 6Spain % % 7UK % % 8Australia % % 9Poland % % 10Argentina % % Total Top % % Total World % % Top Ten Sparkling Wine Consuming Countries Volume – Millions of Hectoliters 78.16% Source: Vinexpo / The IWSR

Consumption / Capita / Year (in Liters) Source: Vinexpo / The IWSR Netherlands 29.8 Australia 31.9 U.K 28.5 Sweden 24.6 Norway 20.3 Canada 13.6 USA

Wine Consumption (By Color) Volume – Millions of Hectoliters / Still Source: Vinexpo / The IWSR RedWhiteRose % +6.68% +7.11% -0.33% +3.84% +7.48% +3.8%+4.40% (50.19%)

Wine Consumption Value –Billions of Dollars, Data from 2005* Source: Vinexpo / The IWSR 2007 * Retail sales including all taxes. 8 StillSparkling % % % +9.72%+9.62% %+9.4%

RankCountry / /2010 1USA % % 2France % % 3UK % % 4Germany % % 5Italy % % 6Australia % % 8Japan % % 7Spain % % 9Canada % % 10Netherlands % % Total Top % % Total World % % 68.5% * Retail sales including all taxes. Source: Vinexpo / The IWSR 2007 Top 10 Countries for Retail Sales Value – Billions ofDollars, Data from 2005* 9

Wine Consumption (By Price Point) Source: Vinexpo / The IWSR 2007 Volume – Millions of Hectoliters / Still * * Retail Prices Including All Taxes. Under $5$5-$10Over $ % % +1.02% +17.2% +9.12% +2.44% +3.8%+4.4%

Global Wine Consumption (By Origin) Source: Vinexpo / The IWSR 2007 Volume –Millions of Hectoliters / Still DomesticImported % - 0.8% % % % %+ 4.4% 11

RankCountry /2005 1Italy % 2France % 3Spain % 4Australia % 5Chile % 6USA % 7Germany % 8South Africa % 9Argentina % 10Portugal % Top Ten Exporters Volume – Millions of Hectolitrers / Still Source: Vinexpo / The IWSR

RankCountry / /2010 % of Consumption 1Germany % %57.3% 2UK % %99.8% 3USA % %26.83% 4Netherlands % %100% 5Bel / Lux % %95.09% 6Canada % %70.22% 7Switzerland % %62.29% 8Denmark % %100% 9Sweden % %100% 10Japan % %56.59% Top 10 Consumers of Imported Still Wine Volume – Millions of Hectoliters Source: Vinexpo / The IWSR

Source: Vinexpo / The IWSR 2007 Total World Consumption of Spirits Volume – Billions of 9 Liter Cases % +7.48% +6%

Spirits / /2010 Vodka % % Brandy % % Rum ,57% % Scotch Whisky % % Liqueurs % % Gin % % Tequila % % Cognac / Armagnac % % Other spirits 1, , %1, % Total World 2, , %2, % Source: Vinexpo / The IWSR 2007 Spirit Consumption by Category Volume – Millions of 9 Liter Cases 15

Spirit Consumption Value – Billions of Dollars, Data from % % +6.32% Source: Vinexpo / The IWSR * Retail sales including all taxes.

The US Market 17

Wine Consumption Volume – Millions of Hectoliters % % % % % % % SparklingStill 18 Source: Vinexpo / The IWSR 2007

Beer 109 Wine 12.3 Spirits 7.6 Consumption per Capita (in Liters) Still and Sparkling Wine / Spirits / Beer 19 Source: Vinexpo / The IWSR 2007 Forecast 2010:

Wine Consumption Source: Vinexpo / The IWSR % % +18.7% Value – Billions of Dollars, Data from 2005 / Still 20 * Retail sales including all taxes.

Wine Consumption ( by Price Point ) Volume – Millions of Hectoliters / Still %+8.2% % % % % % %+18.69% Under $5$5-$10Over $10 21 Source: Vinexpo / The IWSR 2007

Wine Consumption (by Color) Volume – Millions of Hectoliters / Still Red White Rose % % 22.27% % -13.3% % % %+18.69% 22 Source: Vinexpo / The IWSR 2007

Volume -Millions of Hectoliters – Still and Sparkling Wines Source: Vinexpo / The IWSR 2007 US Wine Consumption ( by Origin ) DomesticImported % % % % % % % 23